PERSONALIZATION

only for RuBoard - do not distribute or recompile

Personalization, in itself, is not a new thing. Recall the value propositions we discussed in Chapter 1. Customer intimacy and personalization go hand in hand. However, there is a practical limit to the amount of real personalization that we can engage in successfully. The main reason for this, of course, is that real personalization requires people. It is reasonable to suppose that a personal account manager can expect to be able to cope with anything from 1 to, say, 50 customers and still maintain a degree of personalization. This is fine so long as we only have a small number of customers in total or where there are only a small number within the segment that justify, due to their lifetime value expectations, to be treated in this way.

If, however, we have maybe five million customers, that would take 100,000 personal account managers if we wanted to allocate 1 to each customer but not exceed the limit of 50 each. Even if the account managers cost no more that $50,000 per annum, that would amount to an annual bill of $5 billion. So if we want to take a personalized approach to all customers, we have to look to technology for the solution. This is, by definition, not real personalization but a kind of virtual personalization. We are pretending to the customers that we really know who they are, what their preferences are, and how we can best serve them. However, it is the systems that know these things, not individuals. The customers are completely at the mercy of the systems, and the systems, likewise, are completely dependent on the information that we have stored about the customers. If the information is accurate and up to date and if we have had the time to gather enough of it, then there is a good chance that we can keep the illusion going. If any of those things are not true, then our customers will become disillusioned and will leave us. It is generally better not to have a ersonalization system, than it is to have one that contains flawed information.

The personalization layer of software provides a very thin veneer between the customer and the customer information that is held in our warehouse. It is, in many respects, similar to campaign management systems in that their purpose is to present customers with offers of goods and services.

The principal application for personalization systems has been on the Internet, although there is no reason why that has to be the case. However, the Internet does provide the ideal place to utilize a personalization system, since the customer, or prospect, is already in a software-driven environment.

In order to be of any real use, the system has to be able to identify the customer so that it can retrieve any information that it has previously stored. Armed with the past history, the system can actively lead, or attempt to lead, the customer along a path that has been determined by the marketing team until the user is presented with an offer to buy. Identifying users is normally achieved in one of two ways. The first way is to get them to register their name, address, etc., and to provide them with a password. Many customers, quite reasonably, object to this approach. The other way is to store information about the customer on their own machine, in the form of a cookie and search for it when they access the Website. Once we have their identifier, we can access their records in the database and we then know all about them. The best way to get the information in the first instance is to persuade them to buy something. That way, they have to give us their name , address, and credit card details. We can persuade them to buy by allowing a large discount on whatever it is they are showing interest in. This does require active monitoring of their use of the Website. If, for instance, they inquired about a particular wine a second time, we could respond with, Try this wine for $1.00. We can't let them have it for free because we need that all-important credit card number.

Check very carefully the amount of real functionality that comes with the personalization product. These products tend to be very expensive and yet often consist of little more than a library of functions that we can call through an application programming interface (API). Also, check what comes with the database. You can bet your last dollar that the database of information, the foundation of the whole system upon which ultimate success or failure might depend, is your responsibility.

only for RuBoard - do not distribute or recompile