Using Proven Personalization Techniques

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White Paper
Using Proven Personalization
Techniques to Drive Measurable and
Profitable Online Behaviorp2_Personalization_wp.qxd 4/22/04 5:07 PM Page 2
Using Proven Personalization Techniques to Drive Measurable and Profitable Online Behavior
Contents
Creating Strategic Advantage 1
Personalization Strategies: Pushing and Pulling Users to Influence Behavior 2
Personalization Techniques 2Qualifier Matching 2Rules-Based Matching 3Notifications 3Targeted Email 4Combining Strategy with Technique 4Repeat Visits and Intervals Between Visits 4Registration Rates and Log-On Rates 4Identification of User Communities 5Conversion Rate and Cart Abandonment 5Utilization Rates 5
Preparing for the Personalization Planning Cycle 6
Understanding Your Customer is an Ongoing Process 6Strategy Development 6Customer Segmentation and Community Definition 7Creating a Relationship Architecture 7Defining Specific Personalization Requirements 7Publishing Targeted Content 8Creating Business Rules 8Results Analysis 8Adjusting Strategies 9
Summary 10
A Brief History of Personalization 10p2_Personalization_wp.qxd 4/22/04 5:07 PM Page 1
Using Proven Personalization Techniques to Drive Measurable and Profitable Online Behavior
Creating Strategic Advantage
Creating and retaining a competitive advantage is crucial. By capitalizing on its relationship with each of itscustomers, an organization can differentiate itself in the mind of each person and achieve unprecedentedlevels of loyalty. Experts agree that personalization is an ideal way to achieve this level of differentiation onthe web. Jupiter Research estimates that 35% of organizations they recently surveyed will invest in personal-1ization strategies during 2004.
"Personalization is first and foremost a business strategy, and is an attempt to counter-balance theanonymity that typically characterizes interactions between consumers and large businesses, especiallyover the Internet" says a recent DataMonitor report on global personalization technologies. Personalizationstrategies are designed to influence the five most important user behaviors on the web site: Repeat visits and intervals between visitsRegistration rates and log-on ratesIdentification of user communities Conversion rate and cart abandonmentUtilization rates
Value, in turn, is generated and can be measured by key operating metrics including:The types of transactions and interactions that users perform on the siteThe frequency with which users perform these transactions and interactions The number of users who perform these transactions and interactionsThe types of users who perform these transactions and interactionsThe rate of user retention and site loyaltyThe level of user/customer satisfactionThe degree of web channel loyalty
Some analysts suggest that these metrics are driven more by usability than personalization. This rationale,however, implies that every visitor to a web site wants the same content, information, features and applica-tions. Such an assumption ignores the experience of countless web sites that facilitate multiple types ofuser interactions and transactions.
How then should an organization think about personalizing its web site? "We recommend personalizing to segments of the population that have been fine tuned through the use of business intelligence and datawarehousing tools," says Gene Alvarez, vice president of e-business strategies at META Group. "We also recommend that organizations blend various personalization techniques to match the business model theywant to create and use continuous process improvement, similar to what we've seen in the manufacturingworld, to refine the model. Web services and service-oriented architectures will play a role in this continuousprocess improvement going forward."
1 "Beyond the Personalization Myth," published Sep 30, 2003 by Matthew Berk, Jupiter Research.
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Using Proven Personalization Techniques to Drive Measurable and Profitable Online Behavior
Personalization Strategies: Pushing and Pulling Users to Influence Behavior
There are two key personalization strategies. The push approach proactively recommends information andaccess to applications and features to the user. The pull appr... [download for more]