Karen Howard
Director of
Industry Solutions
E.piphany
karen.howard@epiphany.com
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Beyond Personalization 101
Personalization is nothing new to the retail industry. Sales
associates have long been encouraged to use a small notebook to keep
track of their personal client lists - detailing a customer's
personal information, buying habits, preferences and the like. Armed
with this information, relationships could be built, and sales
associates could more effectively alert customers to relevant
specials, sales and promotions.
Today, customers are as likely to interact with a sales associate as
a Web site or call center agent at 2 a.m. With the competition often
just a click away, and price no longer a deciding factor, it's come
down to the customer experience. Delivering a consistent, positive
customer experience is what attracts and keeps the customers coming
back.
Personalization is one technique smart retailers and catalogers are
using to enhance the customer experience.
However, including a customer's name in an e-mail or on a Web page,
or mentioning it during a service call does not equal
personalization, nor does it truly enhance the customer experience.
If this is your approach, expect your results to be less than
stellar.
Today's customer-centric economy requires that every customer
interaction - regardless of whether it is on the Web, in a store, or
via e-mail - be personalized. Using this approach, customers get the
right offer to meet their needs at the right time over the right
touchpoint. For example:
- When a customer calls into a call center after spending 20
minutes on the Web site looking at PCs, real-time
personalization is at work prompting the call center agent to
steer the conversation appropriately.
- When an online customer is looking at DVDs online, a banner ad
offers a special price on new releases, if the customer appears
to be hesitating about completing the sale, free shipping can be
offered.
For customers who are purchasing gifts, personalization technology
can power "gift recommender" services that can help them
make relevant and appropriate selections based on the demographics
and characteristics of the recipient. Luckily, thanks to a slew of
new technologies for personalization, these scenarios are happening
today.
Effective personalization requires an in-depth understanding of your
customer: What product categories do they like? What do they
dislike? What is their buying history? What are their browsing
patterns? Do they only use the Web to interact with our company or
do they also call our agents or use our catalog? Do they have brand
prefences? How cost-conscious are they? Is this a profitable
customer who requires high-touch customer service?
To gain this razor-sharp understanding, retailers must have a
personalization engine that is built upon a sophisticated analytic
or data mining technology. These superior technologies use advanced
algorithms to glean trends, often invisible to even the most
sophisticated marketing mind, from reams of data.
The more data a company draws upon for each customer, the more
in-depth the analysis, the more accurate the customer profile, and,
ultimately, the more likely an offer will be appropriate, relevant
and accepted. Smart marketers often supplement their customer
database (usually containing information such as buying or service
history) with information gathered through surveys, Web clickstream
data, and marketing data from outside sources to create a single
view of the customer.
But no matter how "in-depth" a customer analysis is, if it
fails to be up-to-the-moment, the efforts will fail. For example, if
you present a product offer to a customer that they turned down last
night, don't expect the results to be good.
With real-time technology, an analysis must happen in less than a
second, as a customer interaction is happening. This is the only way
to ensure that a customer receives the most relevant products or
services at that moment in time.
Taking this in-depth understanding, personalization then uses
advanced predictive technologies to determine and deliver precisely
targeted cross-sell or up-sell offers, loyalty offers, or targeted
content (such as relevant information about the PC a customer is
considering) that might just turn a a browser into a buyer. Once
again, these recommendations must occur in real-time, at the point
of the transaction.
The best personalization tools rely upon a multitude of predictive
technologies to help companies personalize interactions and hone
their marketing offers:
- Business rules are used to filter out inappropriate offers.
For example, don't offer a discount on a CD player to a customer
who has already bought a CD player.
- Real Time Mining scores and rates the probability that an
offer will be accepted. For example, if a customer just checked
out the customer service FAQ portion of the Web site, a window
offering the opportunity to "chat with a customer service
representative" could be served.
- Collaborative filtering makes predictions based on past
purchases from people with similar characteristics. For example,
if you're a 35 year old female buying muffin tins, collaborative
filtering will offer up the suggestion that you check out loaf
pans because people like you have, in the past, also bought loaf
pans.
This combination of rules and self-learning analytics learn from
each interaction which characteristics are most predictive for offer
acceptance and automatically adjusts offer targeting. For example,
age and education level could be very strongly predictive attributes
of people purchasing home improvement books online.
As retailers develop their personalization capabilities, they must
protect customer data. Customers don't want to think that their
information is going to be used against them, or worse yet, sold to
another marketer. When you gather personal information, you need to
reassure customers that the data will not be shared -- consumers
want to protect their privacy and need assurance that personal
information will remain secure. Assure them that you request this
information only to provide better customer service. Once customers
realize the benefits of these personalized interactions, they'll
readily offer relevant personal details. You must uphold your part
of the bargain and develop truly personalized service.
Today, personalization can deliver a host of benefits that retailers
and catalogers require to be successful in today's demanding
economy:
- It allows retailers to present a consistent face, and offer
consistent treatment, across all the channels a customer may
choose
- It is a key contributor to customer satisfaction and loyalty
- It enables retailers to increase order size
- It helps retailers close sales and reduce shopping cart
abandonment
- It encourages repeat orders
Today's customers have seen the bleak side of e-commerce (spam,
mishandled orders, and poor customer service) but true real-time
personalization that uses real-time knowledge and insight to tailor
offers, information, and discounts to each individual is the sunnier
alternative that can help fulfill the promise of e-commerce.
Retailers will be assured that real-time personalization is the best
method to acquire, retain and advance customer relationships and
convert visitors to buyers.
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