Why Get Personal?

One problem with personalization is that it is extremely complex to do well. Even basic technologies such as databases have to be scaled to enormous proportions, and the actual crunching of data to yield useful results gets complicated in a hurry. "It is trivially easy on the tech side to let people do things that are absolutely fatal," says Manning. "Creating lots of rules for dynamic content delivery and management is a nightmare. Four rules are more than twice as complicated to manage as two rules, and we saw projects with hundreds of rules. You have to set up some pretty complex sets of algorithms to manage that, some serious programming intelligence, and that is well beyond what was built into personalization systems."

Many customers aren't interested in playing along. "With one-to-one personalization, it is very difficult to service customers, and very easy to aggravate them," says Sovereign's Doran-Collins. A lot of people resent and resist corporate efforts to learn more about them. It's a common problem for Web marketers. "We do large-scale surveys of Internet users, and they say time and again that they lie online," says Manning. "Reason No. 1: They don't want to be marketed to. That's why databases are full of users named Donald Duck and Mr. Fantastic and Mickey Mouse."

Privacy and trust issues are limiting factors on personalization with John Hancock customers, too, says Rail. "I don't need to know everything about you, and I don't need a huge investment to tell me a lot of the things I do want to know," she adds. Companies that interact repeatedly with customers over time can begin to personalize offerings for them in a mutually beneficial way, says LaFauci. "Supermarket couponing, where they print a coupon specific to you based on a set of transactions, is effective," he says. "But most companies are not in a position to have access to that kind of data to be effective, much less cost-effective."

Web Sites

www-marketing.wharton.upenn.edu The Wharton School's online repository of marketing research, including current papers

Frequently updated Web site about marketing tools and strategy, founded by former Stanford professor Allen Weiss

Peppers, coauthor of the seminal book on personalization and a consultant on customer relationship management, says the death of one-to-one marketing should not be exaggerated. "There was artificiality and market hype, and then rationalization in the market," he says. "But we are on a course of no return in terms of increasing personalization. It's not for every product or business—yet look at the way banks personalize services for their most valuable customers. The question is, how to routinize some of that to make it standard for all customers."

But Manning is more skeptical. "The premise of personalization is that the system is smart enough to know what this person wants, to anticipate her needs and push things to her without action on her part. That's a fallacy. The system is not going to be that smart."

This article was originally published on 08-05-2005
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