The Tip Of The Personalization Iceberg

Web personalization is a powerful tool. But the personalization feature on your web site is just the tip of the iceberg. What’s beneath the surface is just as important to consider if you don’t want your marketing efforts to run aground.

Below the tip of the personalization iceberg in the cold murky waters is a depth of customer data. A resource that not only can present personalized information or cross-sell relevant product items, it can help you fine tune your offerings to the customer. This information can fuel the development of new and improved products and services that can help your company or web site strategy.

Let’ talk about how to stretch the benefits of the profiling aspect of personalization within your site and beyond, by uncovering particularly interesting, innovative and successful uses of one-to-one and targeted Net marketing. There are so many neat applications out there, from simple content customization to complex customized ordering. Take these examples and use them as a springboard to come up with your own creative ways to use web personalization.

Profiles With Style

Did you know there is a significantly high correlation between most people’s taste in music and their taste in clothing styles? Levi Strauss & Company knows, and they use this information along with clothing “looks” and activities, in order to recommend jeans and other clothing items to customers.

The Levi’s Style Finder Levi site helps consumers find clothing that best fits their tastes. The Style Finder feature was built using the Andromedia LikeMinds Personalization Server. Clothing recommendations are based on a customer profile that predicts what clothing items would be relevant to a customer.

The customer profile is built using psychographic data collected as users register their tastes with the Style Finder. First, the system asks customers to rate their likes in music along a scale starting with “Bargain Bin” to “Crank It!” (Translation for the rest of us non-20-somethings: “Least” and “Most.”) Users rate all kinds of music, from New Age to Hip Hop.

Next, they rank clothing looks, such as Dressy, Professional, Chic, etc. Finally, they rank the activities they like to do for fun, such as rollerblading, cooking, extreme sports, home improvement, concerts, happy hour, and so on. Once that’s done, the Style Finder gives clothing recommendations.

For me, they recommended a Loose Khaki Pant and Classic Denim Shirt that definitely reflected my plain-Jane style. Then, I pretended to be much hipper than I am, and the Style Finder recommended Bell Bottom, Flares-A-Lot and Ballet Top.

So what does this mean to Levi Strauss? The company has a goal to increase the awareness of other products such as tops and jackets, beyond its legendary jeans. Linda Della, director of strategic marketing at Andromedia, says companies like Levi Strauss have three important objectives for using web personalization:

  1. Retention — The more time customers spend on the site, the more they will interact or transact on your web site. Web personalization has improved retention because customers invest themselves in the system. And as the system recommends relevant alternatives, users select more and more web pages and buy more products.
  2. Repeat rates — Some Andromedia customers have experienced repeat rates at least double from users who participate in personalization versus users who do not.
  3. Purchase rate — In general, the average purchase rate on the web is about 2 percent. But Linda Della notes, “A recent report showed that web personalization pulls in purchase rates somewhere in the neighborhood of 10 to12 percent.”

Web personalization can also predict product correlations with a high degree of accuracy. “Web personalization that uses collaborative filtering can really refine product correlations over what direct and mass marketing could attempt,” said Della. She cites an example where Cinemax used the LikeMinds Personalization Server to get viewers to basically stay on the couch from the 8 p.m. to the 10:00 p.m. movie.

Profiles That Are Works of Art

Art.com is an online store that sells over 100,000 art and photography prints that customers can customize with their own style of mats and frames. The store Art.com itself is a good example of one-to-one marketing where they allow each customer to select, mat and frame a print to their own personal tastes.

Art.com is currently implementing Net Perceptions Net Perception’s, a collaborative filtering and personalization system. Chris Sorensen, director of business strategy, explains, “Buying art is not as straight-forward as buying other products. Art selection seems to be driven more by the psychographic data associated with the buyer than by demographics. Lifestyle and decorating style (modern, Victorian, country, etc.) drive the decision more than gender, income and other demographic characteristics.”

With art, the buying process is highly emotional. So Art.com will use the personalization system to let its buyers educate them about their personal tastes — individually and in segment clusters. Art.com will use the system to collect customer data by using personalization to create a dialogue with the customer.

In addition to the emphasis on psychographic data, Art.com made the decision to use personalization to enhance its customers’ online buying experience.

Because they offer so many prints over many types of art, they wanted to use personalization to help them cluster buyers into segments based on psychographic information. “There are more than a billion combinations of prints, mats and frames, so we want to help the buyer by giving them a starting point to navigate, based on their personal tastes,” states Michael Kahn, Art.com vice president of marketing.

For example, if a customer selects landscape prints, the system may recommend impressionistic landscapes. However, if the buyer doesn’t like impressionism, he or she can ask the system to recommend many other landscapes from other art genre. Also, because of the psychographic nature of the art buying process, Art.com does not really emphasize click-stream tracking (like behavioral data), preferring to emphasize the information the customer declares about themselves to the system.

Art.com has both quantitative and qualitative performance measures it will use to determine if the personalization system is successful. Quantitatively, they will look at revenue, number of orders, the average order size, and percentage of prints framed versus unframed (framed prints are more lucrative).

Qualitatively, Art.com will monitor customer feedback using surveys, email feedback, and survey cards included in every shipment.

Profiles Fit To Print

I own a Hewlett-Packard printer, and I recently checked out the HP shopping area HP Shopping Village. In addition to creating a customer profile, I registered for My Printing Supplies Store, which recommends relevant supplies for my particular HP printer. Below are some questions HP asked when I registered, which indicate that HP is interested in its customers’ computer habits beyond just printing.

  • “What products do you currently own that are made by HP or other manufacturers?”
  • “How many PCs do you own?” and “From which manufacturers?”
  • “Where do you use your PC?” (At home for personal use, At home for home-based business, etc.)
  • “Who uses your printer?” (Adults, College Students, etc.)

Not only is HP helping customers find printer suppliers fast using personalized recommendations, it is learning more about its customers’ needs and using this information to enhance brand loyalty.

Web personalization could bring in more sales from each customer, more often. But it can also give you further insight into your customers’ demographic and psychographic profiles, preferences, interests, and their decision-making criteria. Of course, you can use this to cross-sell, but you should also use this information within your organization to make strategic decisions about products and services.

If you know of an innovative, interesting or particularly impressive use of one-to-one marketing on the Internet, please email me at deborah@clickz.com. I’ll share your discoveries, even if it is your own site or campaign, in future articles.

Next Week: Direct email marketing is getting lots of marketers all hot and bothered. A look at two important aspects: opt-in and precision marketing using email.

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