| It is one of the supreme ironies of the Internet that | | | | nature of the product, (2) the amount of information |
| the computer, so long derided as impersonal, is now | | | | needed from the potential buyer to make an |
| being used to create highly personal experiences for | | | | effective recommendation, and (3) the likely |
| Web site visitors. Because a computer can sift | | | | willingness of the prospective buyer to share this |
| through vast amounts of existing information | | | | needed information with you. |
| according to preprogrammed rules, computers can | | | | As you go through this process, be aware that we |
| now take company informaÂtion (or special | | | | have entered an age in which consumers want to |
| interest information) and combine it with | | | | educate themselves about everything from which |
| informaÂtion supplied by prospective customers | | | | refrigerator to buy to how to get the best medical |
| and digest it in a way that is meaningful to each | | | | treatment. They no longer trust intermediaries-advice |
| individual. | | | | from dealers, brokers, agents, and even health care |
| What are the best ways for businesses are to | | | | providers is being checked and rechecked by today's |
| personalize selling and customize products in order to | | | | consumer. A well-designed Web site helps meet this |
| build busiÂness. Although many of these | | | | need, and the information should be as rich and |
| methods are still in their infancy, a great deal can be | | | | informative as if the consumer were meeting with |
| gleaned as to current strategies and technologies and | | | | one of your top salespeople. |
| techniques and strategies can be implemented. | | | | Will consumers will trust the informaÂtion they |
| To attract new customers, companies can now | | | | receive from companies on the Web as much as (or |
| establish Web sites that provide highly individualized | | | | more than) they trust sales representatives? All |
| recommendations based on information provided by | | | | evidence to date suggests the answer is yes. People |
| the customer. In this way, it's possible to tell a | | | | believe that no trusted brand will risk its good name |
| prospective customer exactly which product, among | | | | by posting misleading information on the Web. |
| a plethora of possibilities, is just right for that | | | | As you go about creating an online recommendation |
| individual or that busiÂness. The strategic idea | | | | system, your overriding goal should be to make the |
| behind these efforts is clear: By empowering the | | | | online shopping expeÂrience better than what a |
| customer with information about how a specific | | | | customer might encounter in the physiÂcal world. |
| offering meets his or her needs, the company | | | | Therefore, you need to ask yourself: "What can my |
| positions itself as a knowlÂedgeable place to buy | | | | company accomplish using this medium that can't be |
| and also demonstrates how its products are just | | | | accomÂplished in the physical world?" |
| right for that individual customer. | | | | Payment issues online seemed to have been taken |
| This information, properly used, gives an existing | | | | care of by the credit card companies as a matter of |
| supplier or retailer a clear leg up on the competition: | | | | routine. |
| The Company is able to use its information to | | | | What about issues of privacy? |
| establish itself as the supplier of choice and to | | | | Consider gathering data anonymously. |
| suggest services to existing customers before they | | | | Recommendation systems that provide advice to |
| request them. Companies can to maintain effectively | | | | consumers anonymously are likely to be far more |
| private Web sites for individual clients so that they | | | | popular and, therefore, more effective. In these |
| can both provide extraordinary service and | | | | cases, you are able to provide the prospective buyer |
| recommend new products that will be of value to | | | | with value without needing to jump the hurdle of |
| these customers. | | | | "you can trust me with this information." |
| In the past, this type of personalized communication | | | | If you'd prefer to record the identities of site visitors, |
| was virtuÂally impossible: Retailers and suppliers | | | | you are one step ahead if you are a recognized |
| lacked the detailed inforÂmation necessary to | | | | brand. Consumers are already predisposed to believe |
| provide these recommendations and the ability to | | | | in your company name. In this case, address the |
| cost-effectively communicate it to individual | | | | privacy issue head-on with a statement that |
| customers. | | | | precedes your online registration form: "The |
| However, today we have moved into an era where | | | | information gathered here is to help us better serve |
| technology allows firms to cater to the individual | | | | you; we will not share or sell this informaÂtion to |
| needs of customers in a way that have not been | | | | anyone." |
| possible before. The value of these initiatives, both in | | | | If you are not a well-known brand, a strong privacy |
| tightening the bonds with existing customers and in | | | | statement is recommended, but you should likely |
| attracting new customers, is high. | | | | take other measures to more fully establish your |
| Another business tool made possible by the Internet | | | | legitimacy. There are now a number of entiÂties, |
| is something that previously was available only to the | | | | such as the Better Business Bureau's BBBOnline, that |
| wealthy: product cusÂtomization, done quickly | | | | have developed certification programs. These |
| and inexpensively. | | | | programs warrant to site visitors that you are a |
| In an era where a single click can take customers | | | | legitimate business and agree to follow cerÂtain |
| away, leading-edge companies are finding that | | | | ethical business practices. Members of BBBOnline |
| ongoing, personal relationships can be key to winning. | | | | have the right to prominently display a logo on their |
| Personal selling, "marketing intimacy," if you will, | | | | home page. I strongly advise businesses to look into |
| deepens the commercial relationship, adding | | | | this program. |
| tremendous value for the customer ("This saves me | | | | Finally, if you plan to share customer data with |
| so much time-and it's just right for me!") and making | | | | others, then you need to be explicit about it and |
| it painful and costly for the customer to leave ("Why | | | | receive the customer's permission. The worst thing |
| should I buy from anyone else? Company X knows | | | | you can do is fail to inform the customer that some |
| exactly what I like and need"). Therefore, the more | | | | piece of information you determine about him or her |
| your company can "get personal," the more likely the | | | | may be used in some way the customer does not |
| potential for long-term retention of customers. | | | | expect. |
| How companies are are making use of several levels | | | | Product customization is possible because of a |
| of "personal" recommendations. ?. | | | | convergence of twq elements: the Web as a |
| In adopting any strategy based on personalization, | | | | one-to-one communications technology and |
| privacy is a central issue. The ability to make the | | | | manufacturing processes that allow for the |
| customer feel comfortable enough to give you the | | | | development and delivery of custom products. |
| information you need to create a tailored product or | | | | Designing your own custom desktop computer at |
| solution is among the primary challenges companies | | | | Web sites such as Dell has become "commonplace," |
| must overcome. | | | | but what about designing your own swimsuit or, |
| The Web's ability to help companies establish | | | | perhaps, golf clubs? These customized services |
| marketing intimacy is possible because a Web site | | | | provide several valuable benefits for companies: (1) |
| combines five elements: | | | | They help to drive new business, and (2) |
| An opportunity to present information in an | | | | cusÂtomers are willing to pay a premium price |
| interactive format, permitting customers to express | | | | for an individually designed product, which means |
| their preferences to the owner of the Web site | | | | these products and services someÂtimes have |
| Virtually costless online communications between the | | | | higher profit margins than standard offerings.. |
| potential buyer and seller | | | | The ability to interact with customers and say, "I can |
| A visual component that lets potential buyers see | | | | create the product that is just right for you," is one |
| prospecÂtive purchases and how they would | | | | of the most powerful feaÂtures of the Web. |
| appear if personalized | | | | Expansion of this Internet capability will be the |
| The ability to store tremendous amounts of personal | | | | inevitable result of the combination of (1) |
| inforÂmation about their customers | | | | manufacturers creating products that permit |
| An unprecedented ability to create systems that | | | | increasing customization, (2) further advances in |
| configure products so that costly errors are | | | | computing power at ever decreasing costs, and (3) |
| eliminated, thus reducÂing the expense of | | | | new softÂware that is continuously enhancing |
| creating custom products | | | | the options available to busiÂnesses to |
| Presently, one-to-one selling can be viewed in two | | | | personalize. |
| general cateÂgories, recommending and | | | | Smart companies realize that the more involved the |
| customization. | | | | relationship becomes with the customer, the better |
| Brick-and-mortar companies have long known that | | | | their rate of retention. They are implementing this |
| for the most part, either a motivated buyer has | | | | strategy in a wide variety of creative ways, involving |
| done a great deal of research on a particular product, | | | | both personalization and customization, and will |
| or a product has been enthusiastically | | | | cerÂtainly enhance their applications significantly |
| recomÂmended by a friend or business | | | | over time: |
| associate. This knowledge leads to two keys to | | | | 1). Companies are creating extraordinary convenience |
| establishing a Web site that motivates buying: | | | | for customers and establishing systems to speed the |
| Ample information (so that the buyer needn't do any | | | | fulfillment of custom orders. |
| more research-and, in the process, possibly depart | | | | 2. E-mail communications and reminder systems are |
| your Web site for another) | | | | going to be used increasingly. |
| A positive recommendation | | | | The ultimate goal of every business is to have a |
| In the past effective recommendations were | | | | customer who wants to hear from the business |
| generally person to person, there are several reasons | | | | about new products that he or she might want to |
| why these technology-based recommendations are | | | | buy. E-mail, for the first time, provides this type of |
| valued now. One has to do with the dizzying array of | | | | powerful tool, since it's an almost costless |
| choices that now faces consumers. A | | | | communications vehiÂcle. |
| cosÂmetics firm may offer hundreds of shades | | | | 3. In business-to-business selling, smart companies are |
| of lipstick or eye shadow; financial services | | | | also linking tightly to their customers. |
| companies have become true supermarkets filled | | | | Leading-edge technology companies are offering |
| with choices; well-known cold remedies now have | | | | custom password-protected Web sites for their |
| multiple versions that end with words such as "plus" | | | | corporate accounts and high-volume small business |
| and "sinus" and "cough." | | | | accounts. These sites are typically designed to |
| A generation ago, the dilemma posed by the array of | | | | simplify the buying process, and they offer (1) |
| choices was generally solved through one-on-one | | | | cusÂtomer online malls offering products |
| interaction (selling, if you will). Someone with a cold | | | | preselected by the company to be bought by |
| would have stopped by his or her local pharmacy and | | | | employees at volume discount prices, (2) |
| chatted with the pharmacist about which of the | | | | elecÂtronic mail links to account managers |
| three or four cold remedies carried by the pharmacy | | | | responsible for serving that customer, (3) the ability |
| would be best. | | | | to track the status of orders, and (4) draÂmatic |
| Today, the pharmacist is hard to find (and is often | | | | increases in the speed of order fulfillment through the |
| employed by a separate entity within a chain | | | | elimÂination of paper forms and a reduction in |
| drugstore), and the number of choices of what to | | | | errors. |
| take for the common cold is mind-boggling. Do you | | | | This is a clear way of providing customers with |
| want to take the medicine in the day or night? Do | | | | additional value and of tying the customer more |
| you need an expectorant? A cough suppressant? | | | | closely to your company. Most companies will also |
| Decongestant? Antihistamine? Something for fever | | | | see an increase in revÂenues from these |
| and chills? Normal strength or extra? CusÂtomers | | | | accounts. |
| could get a headache simply trying to decide! Today | | | | When companies first began establishing Web sites, |
| cold or allergy sufferers need only click to the | | | | most feared they would receive an overwhelming |
| specific manufacturers "allergy-cold" site, where they | | | | amount of e-mail that they wouldn't be able to |
| are asked to click off their symptoms (itchy watery | | | | handle. In many cases, two unproductive |
| eyes, runny nose, cough, etc.). The site then serves | | | | strateÂgies emerged. Some companies designed |
| as a "friendly pharmacist" and recommends the | | | | Web sites that did not perÂmit the visitor to |
| product that will be right for them. While consumers | | | | contact them, making the site little more than a |
| recognize there is a given bias to any | | | | brochure; other companies permitted e-mail |
| company-sponsored Web site, they still welcome the | | | | messages and then often didn't respond to them. In |
| guidance because they trust the branded product | | | | either case, this did not leave potential customers |
| provider and they are overÂwhelmed by choices. | | | | with any feeling that their visit "mattered" to the |
| Depending on your product and customer, several | | | | company: the exact opposite of the tight relationship |
| types of recÂommending functions may work | | | | a company wants to build between itself and its |
| best. But first, let's take a moment to consider how | | | | customers in a HyperWars enviÂronment. |
| to judge effectiveness. | | | | What was called for, of course, was a new category |
| Thanks to the interactive aspect of the Web, many | | | | of employee: "e-mail respondents"; yet no one |
| technological recÂommendations are firmly based | | | | wanted to add staff at an addiÂtional expense |
| on consumer feedback. At a Web site for a cosmetic | | | | to a project that was in its infancy. Enter "response |
| company (or in-store) visitor provides information on | | | | software." |
| hair, eye, and skin color as well as information | | | | Several intelligent software systems, are able to |
| concerning breakouts, response to the sun, and signs | | | | routinely handle and route questions, so there is no |
| of aging. Based on this information, specific products | | | | excuse for underserving your customers with the |
| are recommended. | | | | first and most basic customer service-answering their |
| . | | | | questions. |
| To the public, there's little that's more confusing than | | | | Companies who are successfully managing their e-mail |
| figuring out what to do with one's money, so, of | | | | via elecÂtronic means are also taking the |
| course, information and recÂommendations are | | | | opportunity to benefit from the |
| vital in this area. Financial service companies are | | | | Knowledge they glean. |
| having a heyday with the possibilities offered to | | | | Companies are finally transforming their Web sites |
| them via the Web. | | | | from marketing brochures to vehicles that turn visits |
| If the visitor is willing to give a little more information, | | | | into sales leads. Those who develop a Web presence |
| then the recommendation can be customized further | | | | and fail to respond to electronic inquiries in a timely |
| and will be that much better. | | | | manner run the risk of losing existing and new |
| Personalization, like any business initiative, should be | | | | customers. Industry research also shows that only 30 |
| used judiÂciously. There are real costs that | | | | percent of Fortune 500 companies respond to |
| accompany developing personalÂized applications: | | | | questions directed to these companies through their |
| They range from the hard cost of development | | | | Web sites, which means a large number of |
| dollars to the cost of disappointing customers or | | | | customers aren't getÂting the personal attention |
| prospects who expected a better experience. It's | | | | winning companies need to provide. |
| important to assess whether a personalization effort | | | | As you consider the possibilities offered by |
| will be effective and contribute meaningÂfully to | | | | personalization and customization, I suggest that |
| new sales or customer retention before investing the | | | | these initiatives be weighed against these criteria: |
| time and money in bringing it to market. The criteria | | | | Will the initiative enhance relationships with my |
| for establishing an effective recommendation system | | | | cusÂtomers by adding convenience or a better |
| are different for every product. The system chosen | | | | ability to meet their needs? |
| is dependent upon a balance of the following: (1) the | | | | |