Slides from an American Marketing Association (AMA) webinar re: how to implement online personalization techniques - pitfalls, opportunities, best practices.

1. Personalization Best Practices for Delivering
an Engaging Online Customer Experience
Carlos Carvajal, Sr. Director of Marketing, Baynote
April 28th, 2010

2. Agenda
• Personalization 101
• Common Pitfalls
• Always Right Personalization
• Real-World Use Cases & Results

3. What is Personalization?
Personalization is a strategy for delivering a customer
experience that is always personal, relevant and convenient
EXPLICIT IMPLICIT
• Profile-based • Behavioral-based
• Segment-based • Context-driven
• Rules-driven • Collaborative Filtering

4. Many Ways to Personalize… Implicit
Product
Recommendations
Content
Recommendations

5. Many Ways to Personalize… Explicit
Customization
Role-based

6. Many Ways to Personalize… Channels & Content

7. Personalization Benefits
Increase:
• Conversions
• Engagement
• Revenue
• Customer Insights
• Customer Lifetime Value

8. Common Personalization Pitfalls

9. Four Common Personalization Pitfalls
1.Must Build a Comprehensive
Customer Profile First
2.Create Rules to Target Content
Based on Customer Preferences
3.“Ultimate Personalization!”
4.Personalization is Really Hard to
Get Right

10. Pitfall #1: Must Build A Comprehensive Profile First…
Brother Uncle
Husband
Engineer
CEO
Father
What to recommend???

11. Pitfall #2: Create Rules to Target Content…

12. Pitfall #3: “Ultimate Personalization!”

13. Pitfall #4: Personalization is Really Hard to Get Right
Approval & Deployment BI, Analytics & MV Testing
• New issues with priority • Too much noisy data
• Missed deadlines • Rear-view mirror
• Out-of-sync with market • Guess work
Re-design
Re-launch
Re-platform
Annually
Quarterly
Monthly
Development & QA Tuning, Merchandizing & Editing
• Too many projects • Manual & costly
• Conflicting priorities • Top 5% most popular only
• Expensive • Expert bias
Too Slow, Too Expensive

14. Personalization in 2001 – Learn From the Past
Source: ‘Web site personalization’, IBM 2001

15. Always Right Personalization

16. Always Right Personalization
http://www.baynote.com/resources/videos/snowboard/video.php

17. Always Right Personalization
“By understanding who you are and your shopping
history… I can accurately predict which products you are
currently interested in.”
VS.
“What are you looking for?”
“Many customers who came before you liked this
beginner snowboard…”

18. Collective Intelligence Powers Always Right Personalization
Combination of Social and Cognitive Science
Sell 1 of many Crowds are free Invisible Crowds
Niche segments Crowds > Expert Actions > Words
Micro projects Crowds reduces cost Whole > Sum of parts
Real-time trends 7 deadly biases Real-time feedback
But how? Aligned incentives?

19. Respond to Changing Customer Needs in Real-Time
Approval & Deployment BI, Analytics & Observes
Automatically MV Testing
• New issues with priority • Too much noisy data
Emergent Patterns
• Missed deadlines Automatic Adjustments
Real-time • Rear-view mirror
• Out-of-sync with market • Guess work
Re-design
Re-launch
Re-platform
Annually
Quarterly
Monthly
Use Collective Intelligence
Development Little IT Involvement
& QA Tuning & Merchandizing
• Too many projects • Manual & costly
• Conflicting priorities • Top 5% most popular only
• Expensive • Expert bias

20. Three Principles for Achieving Always Right Personalization
1.Focus on Context First
2.Understand Customer Intent
Through Engagement
3.Like-Minded Peers Know What
They Like Best

21. Principle #1: Focus on Context First
Brother Uncle
Husband
Engineer
CEO
Father
What to recommend
CONTEXT DRIVES RELEVANCE
?

22. Principle #2: Understand Intent Through Engagement

23. Principle #3: Like-Minded Peers Know What They Like Best

24. Putting it All Together…
…page refers, links, entry trails,
queries, page sizes, mouse movement,
negative experience, virtual bookmarks,
time spent, exit trails…

25. Real-World Use Cases & Results

26. Use Case: Personalized Landing Pages
Known context
Unknown context

27. Use Case: Personalized Search
The crowd knows
“insight” is really
the LG Incite phone.

28. Use Case: Dynamic Navigation
• Real-time as trends emerge
• Based on aggregated visitor
behavior
• Brings content to the
navigation level
Popular content in category

29. Use Case: E-Mail Personalization
Transactional Email Promotional Email
4x
Conversion Rate

30. Use Case: Video Recommendations
21% Increase in
Video Starts

31. Use Case: Recommendations Across Content Types
Most Popular, Related,
Content  Video, Email…

32. Use Case: Social Personalization
Items shared by friends drive
recommendations based on your preferences
What I‟m cooking You Might Like
today

33. Use Case: Identify Customer Trends
Identify Trends
Before They Happen
Find Gaps and Optimize
Product Mix

34. Use Case: Merchandising & Targeting Controls
Select Action
Select
Product
Select
where
product
should be
shown

35. Personal Profiles Serve as Filters and Constraints
Personalized store

36. Personalization Best Practices
Known
Contextual Recommendations Personalized Contextual
Recommendations
Context
Unknown
Most Popular Products Personal Recommendations
Unknown Profile Known

37. Real World Results: Bluefly
Results:
300% lift in sales in Q4 „09
Profile
• $84M High fashion discount eTailer
• 50K SKUS, 350 brands
Challenges
• Low inventory per item
• Constant turnover of product
• Needed real-time solution
“By making recommendations more
relevant from a time perspective, we
knew we would get a lift, but we had
no idea it would be this much"
– Marty Keane, SVP ecommerce

38. Real World Results: TurboTax
Results:
• 35% increase in site search
conversion rates within weeks
Profile
• 73% increase within a year
• 14M taxpayers
• Award-winning support site
Challenges
• Taxpayers unable to find answers
• Manually hard-coding content
recommendations in results
• Rapidly changing content &
seasonality
“The results were so overwhelmingly
positive that it became a no-brainer.”
Chris Jones, Web Analytics Manager

39. Baynote in a Nutshell
Company
• Pioneered real-time recommendations
using collective intelligence in 2005
• 200+ web sites use Baynote today
Technology
• Collective intelligence foundation
• Breakthrough UseRank® patents
Solutions
• Real-time personalization, targeting and
recommendations
• SEO and SEM – peer-driven
• Search optimization – re-ranking by
engagement
• Email & video recommendations
• Insights - Merchandising, Testing,
Reporting

40. Key Takeaways
1. Avoid Common Pitfalls
• Build a comprehensive customer profile first
• Create rules to target content…
• Personalization is really hard to get right
2. Best Practices for Success
• Understand customer intent thru engagement
• Use Collective Intelligence to respond to
changing customer needs in real-time
• Personal profiles serve as filters & constraints
3. Start Simple…
• Identify high-value personalization use case:
landing page, e-mail, product detail page
• Define clear success metrics and plan for
results within 8-12 weeks
• Use customer insights, run tests, adapt

41. Thank You for Your Participation!
Contact Information
• E-mail: carlos@baynote.com
• Twitter: @Baynote
To Learn More About Baynote
• www.baynote.com
• www.baynote.com/blog
Continue the Conversation on Twitter: #AMABaynote