Implementing a Personalization Strategy on Your Web Site

Last Updated May 2, 2007 7:15 PM EDT

To serve your customers best, you need to understand who they are and what they want and need, and then offer it to them directly. Your Web site can be an ideal means for gathering such customer information and making personalized offers based on that data. To do this, you'll need a personalization system to collect personal information about individual customers.

Used properly, personalization is a powerful tool that allows customers to access the right content on your site more quickly, thus saving them valuable time. When considering personalization for your Web site, keep the following in mind:

  • Personalization can only work well if the Web site has quality content that is well structured.
  • True personalization is a complex and expensive process to set up and maintain; it is financially worthwhile only if the Web site has a large quantity of information and many users.
  • Because personalization requires the collection of personal information, it raises key privacy and security issues.
What You Need to KnowDo personalization services contribute to customer loyalty?

Yes. Studies have indicated that customers who regularly patronize a Web site value personalization options. Personalization systems help frequent visitors to return to their favorite sections on a site and to find items of particular interest to the. New visitors to a site are unlikely to use personalization because of the uncertainty of whether they will return to the Web site.

How can I encourage customers to provide information about themselves?

Many studies indicate that privacy is a central issue for people using the Internet. Still, most customers will provide information about themselves if they believe that it will benefit them. They also need to feel confident that the information they surrender will be properly protected, and used only for the reasons stated when it was collected. To get people to give up their personal information, help them feel confident that they are dealing with a reputable organization that will not abuse their trust.

Can I use customer-provided information for uses beyond my Web site?

Every country has its own laws governing how firms may use customer information. So collecting personal information on the Internet, and using it for other marketing activities or moving that information between countries can be very complicated legally. Two basic principles to adhere to are 1) know and heed the privacy laws that apply to consumers in the jurisdictions where they reside, and 2) tell the individual clearly why you are collecting the information you've requested and what you will use it for.

What to DoUnderstand How Web Site Personalization Works

In the basic model for personalization, personal information is collected from an individual, and then used to customize the Web site for that person. Personal information can be collected in two ways:

  • A person directly fills out a form providing a personal profile, perhaps informing the organization of the individual's demographic information and the type, or types, of products and services he or she is interested in.
  • The organization uses software that tracks the way a customer uses the Web site and builds a profile for that customer. For example, if you looked at Product X last week, the next time you visit the site, you may be told about a new feature for Product X. A popular method by which such tracking is done is the use of browser cookies, which reside on an individual's hard drive collecting information on that person's Web viewing behavior.
Assess the Potential Return on Investment

While personalization enables sophisticated marketing possibilities, deploying it does not assure certain profitability. Many organizations spent large sums of money on personalization systems only to see a very poor return on their investment.

Before making the considerable investment in a personalization system, you need to identify a clear set of benefits for both your organization and your customers. Personalization makes most sense if a Web site contains such a large quantity of information or choices that visitors are inevitably slow to find what they seek. Personalization also requires a large number of Web site visitors, because systems are complex and expensive to install and the costs need to be spread against a large transaction base.

Understand Why Customers Reject Personalization

Personalization is not always an enhancement to the customer experience on a Web site. Too much customization of the choices presented to consumers can feel restrictive to them and deny them the joy of exploration offered by browsing. For example, a study by the Poynter Institute on how people read news-based information on the Internet found that, while many of the respondents had tried personalization, a great number had stopped using it. When asked why, the most common answer was that they felt they might be missing something.

People are often not sure exactly what they want when they come to a Web site, and their needs can frequently change over time, so past behavior is not always a true indicator of present needs. A too tightly configured personalization system could actually confine the consumer and discourage a positive experience at the site.

Learn from Personalization at Its Best

Amazon.com, one of the most successful commercial sites on the Internet, offers millions of books and other products in a wide variety of categories, so it can be hard for customers to find what they are looking for. However, Amazon.com's personalization approach, based on a visitor's previous browsing or purchasing behavior, shows selected items expected to appeal to that specific individual reflecting their previous choices. Customers may also be sent occasional e-mails informing them of new book or music releases in categories they have previously looked at. The objective is clear: helping the customer to find quickly the book or item they need and giving them context for their purchase by providing helpful information personally tailored to the individual consumer.

Start Simply

Personalization can be tremendously complex. Start off by personalizing something on your site that is easy to implement and that will deliver an immediate benefit. Any personalization depends on having a well-structured, well-classified Web site that has good-quality, up-to-date information. Without this, personalization to any degree is a waste of time and money.

Work Out What Information You'll Need

Carefully plan the type of customer information you want to gather, for two essential reasons:

  • People hate filling out long forms, and are reluctant to provide too much personal information (onerous forms can deter even willing participants from completing a process that appears daunting once they start).
  • Acquiring too much information can be counterproductive because you end up burying the genuinely useful information under a mass of irrelevant detail that you can't use.

When seeking to develop a profile on a particular customer, information such as the following may be gathered and stored:

  • contact information: name, address, telephone number, email address
  • purchase history
  • personal interests
  • product or service preferences
Develop a Comprehensive Privacy Policy

A clear privacy policy is an essential part of any personalization strategy. It must be made clear why you are collecting the information from your site's visitor and how it will be used. If you wish to use the information for purposes other than the personalization of the Web site, such as sending out e-mails on special offers, or sharing the information with partners, you should inform each of your customers of such intent and give them the opportunity to choose not to have their information used in specific ways.

The California Online Privacy Protection Act that went into effect in 2004 requires commercial Web sites that gather personally identifiable information about Californians to post a privacy policy on their home page that specifies:

  • The categories of personal information that are collected.
  • The categories of third parties with whom personal information may be shared.
  • The ability for consumers to review the personal information the site has collected and the ability to remove it if allowed.
  • The process by which the Web site owner will notify consumers when the privacy policy is changed.
  • The effective date of the policy.

It is good policy to allow individuals at any time to check the information you have on them, and to allow them to delete information on themselves if they wish to do so. While very few individuals ever will actually do this, it gives your customers a feeling of control and confidence—essential motives to their surrendering personal information.

Ensure Adequate Security for Customer Data

When collecting personal information on customers, proper security measures are essential. Internet security breaches are increasing (more than a hundred million customer records reportedly have been breached since early 2005), and with identity theft now a multi-billion dollar industry, hackers are particularly interested in breaking into systems containing personal information. An organization's reputation can be badly damaged by the theft of customers' personal information. Two guiding principles for minimizing your risk: don't collect information you don't truly need to serve your customer, and do everything you possibly can to safeguard the information you do collect.

Choose Your Software Vendor

While it is possible to develop custom-made software for personalization services on your Web site, it is not advisable unless the personalization system is a very simple one. There are a wide variety of vendors selling personalization software. However, it is important not to be attracted to what may be unnecessary features: generally, the more features, the more complexity, and the more investment you'll make for purchasing, installing and maintaining the system. Keep your objectives clear, and always focus on real needs and benefits you can realistically expect to accrue.

What to AvoidYou Expect Immediate, Brilliant Results

It is a mistake to think that personalization will turn a poorly designed Web site with poor-quality information or mediocre offers into a winning success. Personalization is only as good as the foundations upon which it is built. In addition, personalization is not suitable for every Web site. The benefits must be very clear both from the point of view of the organization and of the Web site visitor.

You Collect Unnecessary Information

Collecting too much information or the wrong information will ensure that personalization fails. It frustrates the customer and makes the process of sifting through the collected information time-consuming and expensive.

You Fail to Offer Incentives

Many people are willing to give their personal information once they've been shown clear benefits for doing so. It is important to explain convincingly to customers why they should submit their personal information to a Web site. An effective way to do this is to address the issue directly with a clear declaration: "Why we ask for this information." Remember to give people control over how their information is used, particularly with regard to marketing efforts that make use of their information beyond your Web site itself.

You Don't Have a Comprehensive Privacy Policy

There have been many high profile instances of privacy abuses on the Internet. Understandably, consumers are increasingly wary of Web sites that seek to collect their personal information. Before personalization can work for your company, you must establish your credibility and earn your visitor's trust. A way of doing this is to have a comprehensive privacy policy and honor it in every detail. Not only is that good business, but many jurisdictions require it.

Where to Learn MoreBook:

Kasanoff, Bruce. Making It Personal: How to Profit from Personalization without Invading Privacy. Cambridge, MA: Perseus, 2001.

Web Sites:

Personalization Consortium: www.consortiuminfo.org

Privacy Rights Clearinghouse: www.privacyrights.org/index.htm