The Personalization Equation

How the E-Commerce industry is using your information

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Important Business Questions

1. How efficient is our web site in delivering information?

2. How do the users perceive the structure of the web site?

3. Can we predict the user's next visit?

4. Can we make our site meet user needs?

5. Can we increase user satisfaction?

6. Can we target specific groups of users and personalize web content for them?

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Hall, C. (2001, April). THE Personalization = equation =. (Cover story). Software Magazine, 21(2), 26.

“If I have 3 million customers on the Web, I should have 3 million stores on the web”

- Jeff Bezos, CEO of Amazon.com

"Getting Personal" with Your Best Customers

Our Relationship Management solutions personalize the entire online shopping experience, allowing retailers to recognize shoppers and leverage their shopping and browsing history to present tailored assortments, personalized content, offers that reflect their tastes and preferences, and relevant related items for cross-sell and up-sell opportunities.

Analysis and Segmentation Techniques

Online Analytical Processing (OLAP): performs complex queries on the customer information store.

Data Mining: applies pattern-matching, classification, and prediction algorithms to segment customers into categories.

Statistical Tools: used to perform complex mathematical operations on data sets. thomascheah.com

Analysis and Segmentation Techniques

Clickstream Data: provides a detailed activity path that is generated when a user interacts with a website.

Recommendation Systems Content-based Filtering: tracks the

user's behavior and recommends similar items to those liked in the past.

Collaborative Filtering: based on other users' ratings with similar preferences.

Rule-based Filtering: asks the user questions and provides services tailored to his/her needs. superstock.com

Customer Response to Personalization

57% of consumers would trade demographic information for personalized content. 2006 eMarketer study

77% of customers say they find product recommendations somewhat to extremely useful. Forrester survey

ana.net

• 59% of online shoppers would return to buy again if

presented with special offers based on previous purchases.• DoubleClick Performics survey

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Privacy Concerns?Dr. Amanda Reeve didn't know about data-miner

Choicepoint, but they know all about her... and you!

http://www.youtube.com/watch?v=VrlO8WtZ-1Y&feature=

channel

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DiscussionHave you ever noticed a website

tailoring their site to you? Do you find this useful or disturbing?

Do you believe that website personalization brings up privacy concerns?

What do you see as the future of website personalization?

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