Personalisation has become an accepted part of technological interaction, but what does the future hold? Do we really want to go there? And how can the increasing trend towards personalisation be reconciled with demands for privacy and security?Browsing the Internet these days, it's rarely a surprise to discover your own name staring out at you. "Welcome back, Angus!" every second site appears to proclaim (especially if your name actually is Angus).
It doesn't seem likely that this sort of behaviour is going to stop any time soon, although it's unlikely to improve your ranking on Google in the short term. Personalisation has now become an accepted requirement on most commercial Web sites, even if it doesn't go much further than
Although it's the most commonly used example, personalisation isn't purely restricted to online systems. "Personalisation technology is quite standard in black and white transactional documents such as phone and gas bills or bank statements," says Chad Pearce, software solutions marketing manager for Fuji Xerox. These have been around for a few years now and we are well used to receiving them. The colour market though is only just beginning to be explored."
Whatever the medium, personalisation is always a useful buzzword to throw into your next presentation. "Large enterprises want to create intimacy and build a personalised relationship," says Ad Nederlof, CEO of Genesys Laboratories. But do they want to do that just to make money? How difficult is it to achieve a personalised service, and what real benefits do consumers get from it?
Who's doing it?
Although personalised interactions are often discussed and frequently hyped, they aren't necessarily extraordinarily common. "Businesses aren't being proactive with personalised information," says Craig Neil, managing director of NSC Group. "Marketing departments are just starting to look at it."
"The concept of personalisation technologies has been well accepted, but there's a gap when it comes to putting it into production," says Mike Kearney, director of product marketing for Vignette Asia Pacific. "Companies see the value of personalisation, but often defer implementation until phase two of the project."
That situation is gradually changing. "There are some exceptions in the B2C arena, where many companies already use personalisation to give them a competitive advantage," says Kearney. "We also see personalisation of a sort in B2B extranets where companies have implemented portals that are customised or filtered for each supplier, partner or distributor. In fact, the widespread adoption of portals on both sides of the firewall has driven user expectations around audience-specific targeting of content, services and applications.
A good measure of the fact that personalisation has yet to be adopted on a truly widespread scale is the fact that virtually everyone in the field uses the same example when they talk about it: Amazon.com. The large range of features it offers, including wish lists, wedding registries, personalised accounts with multiple addresses, suggestions based on past purchases, and lists of items purchased by people who bought the book you're currently drooling over have become a holy grail for other retailers and marketers. Many sites offer some of these features; few offer all of them.
It's important to keep a sense of perspective on this. While Amazon.com has produced some impressive results, there are still plenty of areas where it could improve. For instance, given that the site knows who I am and knows that my delivery address is located in Australia, why does it persist in showing advertisements for US-only free shipping services? Why does it show me content from the site's electronics and toy departments as suggested purchases, even though these items can't be sent to Australia? Why doesn't it offer an option to automatically delete items I've purchased from my wish list? Why does it insist on spelling "personalisation" with a "z"?
| “Businesses aren’t being proactive with personalised information. Marketing departments are just starting to look at it.” |
"It is easy to recognise a user, retrieve profile information, and apply that profile to filter content and adjust functionality," says John Treloar, ANZ managing director for Macromedia. "The problem is creating the level of personalised content and specifying personalised functionality to implement."
That doesn't mean the technologies aren't available. "From a technology point of view, everything is pretty much sorted out by now," says Red Square's Redhead. "It's more of an issue how well systems are actually deployed."
"There are few technological challenges; this kind of basic programming has been part of software and the Internet since the beginning," concurs Macromedia's Treloar. "The main challenges are organisational and business ones. Most businesses do not think about the effort required to produce this content and are not prepared to resource the function properly. It's essentially the same as running a magazine or newspaper."
One problem may be bundling together the different technologies--cookies, databases, Web servers, and CRM systems--needed to create personalised experiences. "Truly packaged solutions are relatively rare," says Vignette's Kearney. "Outside of the personalisation inherent in portal solutions, there's still a great deal of custom coding to try to make automated personalisation work and scale. Personalisation systems must connect to many existing business and information systems, which presents an extremely complex challenge. There are other tough challenges around scalability and performance, as well as personalising consistently across delivery channels."
"Combining various personalisation techniques such as organic recommendations, personalised presentation, ‘my page' technologies, and efficient search also presents significant challenges," adds Kearney. "Finally, there's complexity around regional personalisation for different languages, character sets and cultural nuances and in tying personalisation engines to content taxonomies and content-related processes."
It's also important not to automatically assume that consumers have a connection that can handle this kind of content. "You need to get some speed even for basic transactions," says NSC's Neil. "Bandwidth is a huge issue."
Then there's the perennial problem of how accurate that "personal" content actually is. "The biggest challenge with implementing personalisation systems is the cleanliness of the data," says Fuji Xerox's Pearce. "Unclean data can do more damage than good. Receiving a letter from a company that has spelt your name wrong will not endear you to their products."
"Once you start to get into personalisation, you need much more complex data about relationships," says Redhead. "It all comes down to the implementation. If you want it to work really well, it's complex."
Privacy challenges
One recurring issue with any kind of personalisation system is the challenge of balancing providing an individuated service with respecting the right to privacy.
"The privacy issue is huge," says Redhead. "People need to know that the information they put out there is secure. But the more security you put on it, the more complex it gets to manage."
"Consumers are wary of companies that know too much," says Pearce. "Relevance is the key, not forced relationships. Consumers may like a company to demonstrate that they understand them, but they're unlikely to want to engage in a personal discussion with them.
"Australians are very aware of their privacy rights and are wary of protecting their personal information," he adds. "By using personal data with sensitivity, companies can add value and relevance for consumers. However, a company that is seen to know too much is often viewed with distrust."
Managing privacy largely requires a measure of courtesy and common sense. "It's quite simple: let the customer decide," says Redhead. "Give them the option of how much data they want to share. Let them know the choices and the benefits. You need to allow people to test the waters."
In many cases, this will mean offering a range of services and ensuring they are appropriately secured. This is the approach taken by the Australian Taxation Office, which has personalisation of services as one of its central goals (see Taxing times for the ATO for details).
Some privacy problems do eventually fade into the background. When browser cookies were first introduced, privacy advocates proclaimed them the death of confidentiality and encouraged people not to use them. These days, they're more or less universally accepted. "Cookies are not something we ever hear about anymore," says Redhead.
However, large-scale change will take longer. "Technology will continue to get smarter and more efficient, and while techno-buffs and marketers may find this exciting, social acceptance will take a while to catch up," says Pearce.
On the other side of the coin there's also a risk that companies will damage consumer perceptions by collecting the kind of information that could lead to a personalised service and then failing to act on it. NSC's Neil tells the story of how, as part of the process of purchasing a new Mercedes Benz earlier this year, he filled out a form which also gave details of some of his other leisure interests.
| “From a technology point of view, everything is pretty much sorted out by now. It’s more of an issue how well systems are actually deployed.” |
Given the cost of the car, Neil expected that Mercedes Benz would make some sort of compensatory gesture for all the inconvenience this caused. And given that he'd filled out a form which told them the kind of things he was interested in, he thought that this could have been easily taken into account by sending him, say, some theatre tickets. Instead, the dealer eventually gave him a packet of mints. The end result? It seems unlikely that he'll be buying another Merc in the future.
Unwanted mints aside, the main benefit of personalisation for consumers is that they get a service that is matched to their needs. The main benefit for businesses is that they ultimately get to flog more product. Indeed, it's hard to avoid the conclusion that personalising Web sites and other customer communications is just another branch of the many-headed beast that is customer relationship management (CRM).
Certainly, all the terminology ends up being the same. "Studies have shown that personalising printed marketing collateral has been well accepted by recipients, with response rates of between 15 and 30 percent--well up from the industry average of two percent for generic documents," says Pearce.
Most developers in the area freely admit that providing a personalised service is driven largely by a desire to collect more customer information. "It gives people the ability to have a much better understanding of customer behaviour," says Alex Grinberg, CEO of account aggregation technology provider eWise. "Account aggregation provides a cycle where the user is self-profiling."
"Demand chain management (DCM) involves giving customers what they want when they want it, and that's what is currently creating the buzz in supply chain management," says Gordon Towell, CEO of IDS Enterprise Systems. "All this requires is a seamless IT system from the retailer back through the factory." (Not too much to ask then.)
