What's the difference between personalization and segmentation?

Segmentation groups people. Personalization addresses individuals.

Segmentation divides your list into categories: new customers, enterprise accounts, people interested in hiking gear. Everyone in the segment gets the same content.

Personalization adapts content for each person within a segment. Two enterprise customers might receive the same campaign, but one sees their name, their company mentioned, and products related to their purchase history.

Segmentation is about strategy. Who should receive this campaign? What group has this need?

Personalization is about execution. Given this person is in this segment, how do we make the message specifically relevant to them?

They work together:

Segmentation ensures the right message reaches the right audience.
Personalization ensures that message feels individually crafted.

Consider a shipping manifest. Segmentation sorts cargo by destination port. Personalization is addressing each package to its specific recipient. You need both: the manifest without addresses delivers to cities not people; addresses without the manifest sends packages to wrong destinations entirely.