True personalisation means following the customer's lead

… says Jim Sterne

It's a wonderful concept. You record every click, every search phrase, every website visit and every email ever received. You use client-side surveillance to capture the tiniest twitch of the mouse and the most subtle hover behaviour. You use this information to serve up just the right offer at just the right time. The result? More sales, less marketing spend and happier customers. What could be better?

It might be better if you could raise revenue while lowering costs and improving customer satisfaction on a regular basis.

Can you build a giant datawarehouse and arithmetically deduce the one best offer to make to each and every website visitor? Sure. But be prepared for a lightening of the wallet. There are many other ways to make more sales at significantly less cost and keep your customers happier in the bargain.

I’ve been asked to address these issues at the Knexus Community round table in London on 16^th November, see www.knexusgroup.com. Senior executives from the UK’s major corporations are getting wise to the business of customer personalisation and want to know how it can help their business.

Well, consider this:

Amazon knows every book I have purchased online since 1996. They can certainly turn that into persuasive content to email or display on their site when I show up. And they do - if I reach for it. I have to click to check my recommendations rather than get them via email or simply see a home page plastered with them. Why? Because Amazon is very good about ROI. They like to go after low-hanging fruit.

Amazon knows that customers who bought "Harry Potter and the Half-Blood Prince" also bought "Ark Angel: Bk. 6" by Anthony Horowitz. Anybody interested in the former might well be interested in the latter. Does this increase sales? Oh yes. And a quick peek at my credit card bills will testify to that fact.

Amazon also knows unequivocally what I like because I told them. I said I wanted to know whenever John Grisham or Neal Stephenson publish a new book. What's the technical difficulty on a scale of 1 to 10? About 1.5. The ROI? Amazon won't tell. But they will get that certain gleam in their eyes.

How does the customer feel about this? Fulfilled. I like reading. I like being in the know. I like being ahead of the curve. Satisfaction on a scale of 1 to 10? 11.

But how would I feel if Amazon offered me nothing but Grisham stories and Stephenson books? Bored. So Amazon came up with something they once called the serendipity dial. The serendipity dial ensures that your trip across the English Channel includes the smells of the sea, the diversity of the open sky, the sound of the birds and the spray of the salt water on your face, rather than the quick, but blinkered Chunnel ride.

In an effort to move customers away from the tried and true, they developed the personalized Gold Box. What a disappointment! This was a dancing, gold treasure chest in the upper right corner of the home page that offered 10 deep discounted items per day, tailored to the individual. It was labeled, "Jim's Gold Box" in my case.

I have purchased countless books, a goodly number of CD's and DVD's, and a handful of electronics. What was in my personal Gold Box? Jewellery, kitchen gadgets, gardening tools, and electric toothbrushes. Nothing I would consider buying from Amazon.

The opportunity to protest presented itself at a web analytics conference. "Our intent was to show you items you wouldn't consider buying from us," explained Ronny Kohavi, Director of Data Mining and Personalisation for Amazon.com. "Maybe now you will." Low hanging fruit.

"Hello, Jim Sterne. We have recommendations for you." Yes, those recommendations are based on previous purchases, purchases made by others and my own wish list. But nothing sells books, music, toys and tools faster and at less marketing cost than emailing notification of availability to those who hungrily await the next Harry Potter book and will be only too happy to pay for it well in advance.

You want to get the most out of online personalisation? Let your customers do the work- then you can reap the rewards.

This is a major step forward for UK commerce and one that should keep the shareholders happy, so watch this space…

About Jim Sterne

Jim Sterne will be hosting the first round table on web analytics for the Knexus community, Europe's leading corporate business club and network. www.knexusgroup.com. London 16 November 2005.

Jim Sterne is an internationally known speaker on electronic marketing and customer interaction. A strategy consultant to multinational companies and online companies, Sterne focuses his twenty years in sales and marketing on measuring the value of a web site as a medium for creating and strengthening customer relationships. Jim is the Founder and Director of Target Marketing http://www.targeting.com/