1. Internet Marketing & e-Commerce Ward Hanson Kirthi Kalyanam Requests for permission to copy any part of the material should be addressed to: PERMISSIONS DEPARTMENT THOMSON BUSINESS and ECONOMICS 5109 Natorp Boulevard Mason, OH Phone: (800)

2. Part Two: Chapter Nine Personalization
“The rediscovery of the customer is a byproduct – perhaps the most important one – of the onset of the information revolution.”
Blattberg and Glazer, The Marketing Information Revolution

3. Benefits of Personalization
Product distinction: a standard product becomes a specialized solution

4. Benefits of Personalization
Product distinction: a standard product becomes a specialized solution
Low cost access to luxury and status of personalized services

5. Benefits of Personalization
Product distinction: a standard product becomes a specialized solution
Low cost access to luxury and status of personalized services
Hard to evaluate experience goods become predictable search goods

6. Benefits of Personalization
Product distinction: a standard product becomes a specialized solution
Low cost access to luxury and status of personalized services
Hard to evaluate experience goods become predictable search goods
Survival through differentiation

7. Benefits of Personalization
Product distinction: a standard product becomes a specialized solution
Low cost access to luxury and status of personalized services
Hard to evaluate experience goods become predictable search goods
Survival through differentiation
Increased customer loyalty

8. The Personalization Balance
Competitive advantage comes when personalization is supported by focus on customer-relating capabilities (CRC)

9. The Personalization Balance
SOURCE: George Day and Christophe Van den Bulte, “Superiority in Customer Rlationship Management,” working paper, Wharton School, September 2002

10. The Personalization Balance
Personalization efforts can produce backlash: First Class envy
Excessive personalization wastes time
Sometimes, standardization is just fine

11. Personalization Approaches
Mass Customization: blending standard products with individual information

12. Personalization Approaches
Mass Customization: blending standard products with individual information
Choice Assistance: advice giving systems cut clutter of product choice

13. Personalization Approaches
Mass Customization: blending standard products with individual information
Choice Assistance: advice giving systems cut clutter of product choice
Personalized Messaging: consumer needs and choices tracked across repeated interaction

14. Many Opportunities for Personalization
SOURCE: Adapted from Kai Riemer and Carsten Totz, “The Many Faces of Personalization,” in Tseng and Piller, The Customer Centric Enterprise, (New York/Berlin: Springer Verlag, 2003

15. Mass Customization
Customization of how a product is represented or of a product’s specific attributes through four approaches:
Collaborative
Cosmetic
Transparent
Adaptive

16. Mass Customization
Collaborative Customization: Online reconfiguration of a product to match consumer preferences
Example: Choosing features for a new car

17. Mass Customization
Cosmetic Customization: Packaging choices personalize standard products
Example: Choosing an iPod case
SOURCE: Getty Images

18. Mass Customization
Transparent Customization: Product features learn the user and adjust accordingly
Example: Google Scholar

19. Mass Customization
Adaptive Customization: Product features naturally customize themselves or are individually configured
Example: Weather reports by zip code

20. Choice Assistance
Determining if a recommendation system could enhance online marketing:
Do customer lifetime values vary greatly?
Do customer needs vary greatly?
Are key product attributes qualitative or complex?

21. Choice Assistance
A recommendation system flowchart

22. Choice Assistance: Approaches
Rules-based: Combines information about customers with understanding of how products are used

23. Choice Assistance: Approaches
Rules-based: Combines information about customers with understanding of how products are used
Computer-assisted self-explication (CASE): Advice generated from databases of consumer input

24. Choice Assistance: Approaches
Rules-based: Combines information about customers with understanding of how products are used
Computer-assisted self-explication (CASE): Advice generated from databases of consumer input
Collaborative Filtering: For complex product choices, linking like-minded individuals for recommendations

25. Choice Assistance: Approaches
Rules-based: Combines information about customers with understanding of how products are used
Computer-assisted self-explication (CASE): Advice generated from databases of consumer input
Collaborative Filtering: For complex product choices, linking like-minded individuals for recommendations
Endorsement: Virtual word-of-mouth referrals link users with preferred providers

26. Personalized Messaging
Users must be authenticated through a fixed, valid address
Online through Web servers, browser cookies or registration systems
and Instant Messaging accounts
Cell phones and wireless PDAs

27. Personalized Messaging
Valid Name and Database
Valid Name
User ID
Cookies
Log Analysis
Online Behavior
Visitor Statistics
Anonymous
Increasing levels of knowledge about Web user

28. Personalized Messaging
With an established address, online behavior patterns suggest best approach for personalized messaging

29. Personalized Messaging
With an established address, online behavior patterns suggest best approach for personalized messaging
Distinct online events or inquiries can provide trigger moments for messaging
Example: A user searching for home value calculator could need real estate services