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Personalization: Empowering Customers? Maybe.
Like many professionals who spend much of the business day online, I am bombarded with "personalized" marketing messages in the form of e-mail, Web page views and suggested links. But do they work?
Posted May 17, 2001
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Like many professionals who spend much of the business day online, I am bombarded with personalized marketing messages in the form of e-mail, Web page views and suggested links. During the past two weeks, I have received personal invitations to purchase aluminum siding at a great discount (I live in a log cabin) and select spring bulbs that I can "buy and plant now"--to be billed later as part of a 100 percent money-back guarantee that they would grow in my climate zone. The last offer actually made me LOL (laugh out loud)! Why? I live in the Adirondack Mountains of upstate New York, where as I write this at the end of March, the snow piles still extend to the roofline and I don't think there's any hope of seeing bulb-ready ground for months.

These attempts--albeit unsuccessful at best--at personalizing marketing messages did empower me, however, as the consumer. They empowered me to use the delete button, a device on my keyboard that sees plenty of action on a daily basis. And, I suspect that I am not alone. According to The Pew Internet & American Life Project's latest demographic study (February 18, 2001), American adults with Internet access increased in the last half of 2000 from 88 million to a healthy 104 million online voices. That's a lot of delete buttons being clicked. (I think I hear the echoes bouncing off the mountains.)

With all the hype on personalization and the unlimited potential that this marketing strategy offers, why are so many companies getting it wrong? Many would argue that one-to-one marketing" using personalization is just mass marketing in disguise, with a little "Dear Carol" thrown in to mask the attempt. The debate on this subject continues to fill pages of print publications, online discussion areas and conference rooms.

But I don't think this is a reflection, necessarily, of the potential that one-to-one marketing and customer service can offer; it is a direct reflection on the companies using the strategy. (Or using the strategy incorrectly.) As vendors release second (and third) generation personalization products, the ability to fine-tune these attempts can only improve--if companies learn how to use the tools properly, of course. In the interim, consumers, such as myself, will continue to vote with the delete button.

Even those companies that are getting it right cannot do it on a consistent basis. Amazon.com is often cited as a leader in e-business and the use of personalized marketing tools. Although I use Amazon frequently, I would have to disagree with this analysis. Amazon, are you listening to me? Please don't waste my precious time when I return to your site with recommendations that do not pertain to me individually. Empower me. Allow me to define my profile, not my purchasing habits. And allow me to modify that profile as my needs and interests change.

Individuals who become frustrated with these attempts at personalization or the misuse of information communicate with action. They simply defect. With a click of the mouse, they are surfing the competition. Although the figures vary among reports and analysts, the browse-to-buy rate is somewhere around 2 percent. What's happening to the other 98 percent? (I think that their abandoned shopping carts are causing a traffic jam in cyberspace.)

"Approximately 20 to 40 percent of customers defect a company annually," states Jill Griffin, principal, The Griffin Group and co-author of "Customer Winback: How to Recapture Lost Customers- -And Keep Them Loyal" (Jossey-Bass), "and relevance and personalization are key in successfully re-approaching these lost customers and rebuilding trust. Companies often focus on customer acquisition and retention. And while I agree that these are two areas that are of utmost importance, there's an untapped potential in the area of customer win-back. Online personalization has the potential--if used correctly--to position a company to re-establish ties with customers with whom they once had a relationship. This customer reconnection can be accomplished through empowering the customer--not the company. However, the customer information must be relevant in order for the personalization attempt to be successful."

Personalization can only be as good as the data that supports the efforts. "In the highly efficient world of electronic communications, greater effectiveness may be achieved on a very high level through the personalization of offers, pricing, timing and even the wording used by a business/provider," explains Ron Swift, CRM consultant and author of Accelerating Customer Relationships. "Using an enterprise view of the customer (or modeling the prospects) provides new opportunity to truly understand the requirements to achieve meaningful results."

So, Amazon, if you're still bending your ear in my direction, fear not. I am not one who is ready to defect and jump to the competition. I recognize that your attempts at providing me with personal and relevant information are sincere, and that as you further develop your Web site, integrate more advanced tools and look at your data from the customer's perspective, this online experience will improve. Besides, you have my undivided attention. Here in the mountains, the closest large-scale brick and mortar bookstore is one and a half hours away. And your ability to quickly deliver my requested purchases has allowed me to develop yet another one-to-one relationship--with my UPS delivery person--which brings me to another story . . .

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