Personalization Best Practices for Delivering
an Engaging Online Customer Experience
Carlos Carvajal, Sr. Director of Marketing, Baynote
April 28th, 2010
Agenda
• Personalization 101
• Common Pitfalls
• Always Right Personalization
• Real-World Use Cases & Results
What is Personalization?
EXPLICIT IMPLICIT
• Profile-based
• Segment-based
• Rules-driven
• Behavioral-based
• Context-driven
• Collaborative Filtering
Personalization is a strategy for delivering a customer
experience that is always personal, relevant and convenient
Many Ways to Personalize… Implicit
Product
Recommendations
Content
Recommendations
Many Ways to Personalize… Explicit
CustomizationRole-based
Many Ways to Personalize… Channels & Content
Personalization Benefits
Increase:
• Conversions
• Engagement
• Revenue
• Customer Insights
• Customer Lifetime Value
Common Personalization Pitfalls
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
Pitfall #1: Must Build A Comprehensive Profile First…
Father
Uncle
Husband
CEO
Brother
Engineer
What to recommend???
Pitfall #2: Create Rules to Target Content…
Pitfall #3: “Ultimate Personalization!”
Pitfall #4: Personalization is Really Hard to Get Right
BI, Analytics & MV Testing
• Too much noisy data
• Rear-view mirror
• Guess work
Re-design
Re-launch
Re-platform
Annually
Quarterly
Monthly
Tuning, Merchandizing & Editing
• Manual & costly
• Top 5% most popular only
• Expert bias
Development & QA
• Too many projects
• Conflicting priorities
• Expensive
Approval & Deployment
• New issues with priority
• Missed deadlines
• Out-of-sync with market
Too Slow, Too Expensive
Personalization in 2001 – Learn From the Past
Source: ‘Web site personalization’, IBM 2001
Always Right Personalization
Always Right Personalization
http://www.baynote.com/resources/videos/snowboard/video.php
VS.
Always Right Personalization
“By understanding who you are and your shopping
history… I can accurately predict which products you are
currently interested in.”
“What are you looking for?”
“Many customers who came before you liked this
beginner snowboard…”
Collective Intelligence Powers Always Right Personalization
Invisible CrowdsActions > Words
Whole > Sum of parts
Real-time feedback
Crowds are freeCrowds > Expert
Crowds reduces cost
7 deadly biases
Aligned incentives?
Sell 1 of manyNiche segments
Micro projects
Real-time trends
But how?
Combination of Social and Cognitive Science
Respond to Changing Customer Needs in Real-Time
BI, Analytics & MV Testing
• Too much noisy data
• Rear-view mirror
• Guess work
Re-design
Re-launch
Re-platform
Annually
Quarterly
Monthly
Tuning & Merchandizing
• Manual & costly
• Top 5% most popular only
• Expert bias
Development & QA
• Too many projects
• Conflicting priorities
• Expensive
Approval & Deployment
• New issues with priority
• Missed deadlines
• Out-of-sync with market
Automatically Observes
Emergent Patterns
Use Collective Intelligence
Little IT Involvement
Real-time Automatic Adjustments
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
Principle #1: Focus on Context First
What to recommend
?CONTEXT DRIVES RELEVANCE
Father
Uncle
Husband
CEO
Brother
Engineer
Principle #2: Understand Intent Through Engagement
Principle #3: Like-Minded Peers Know What They Like Best
Putting it All Together…
…page refers, links, entry trails,
queries, page sizes, mouse movement,
negative experience, virtual bookmarks,
time spent, exit trails…
Real-World Use Cases & Results
Use Case: Personalized Landing Pages
Unknown context
Known context
Use Case: Personalized Search
The crowd knows “insight” is really the LG Incite phone.
Use Case: Dynamic Navigation
• Real-time as trends emerge
• Based on aggregated visitor
behavior
• Brings content to the
navigation level
Popular content in category
Use Case: E-Mail Personalization
4x
Conversion Rate
Promotional EmailTransactional Email
Use Case: Video Recommendations
21% Increase in
Video Starts
Use Case: Recommendations Across Content Types
Most Popular, Related, Content Video, Email…
Use Case: Social Personalization
What I‟m cooking
today
You Might Like
Items shared by friends drive recommendations based on your preferences
Use Case: Identify Customer Trends
Identify Trends
Before They Happen
Find Gaps and Optimize
Product Mix
Use Case: Merchandising & Targeting Controls
Select Action
Select
Product
Select
where
product
should be
shown
Personal Profiles Serve as Filters and Constraints
Personalized store
Personalization Best Practices
Personalized Contextual Recommendations
Contextual Recommendations
Known
Unknown
Known
Personal RecommendationsMost Popular Products
Unknown Profile
Context
Real World Results: Bluefly
Profile• $84M High fashion discount eTailer• 50K SKUS, 350 brands
Results:300% lift in sales in Q4 „09
“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
Challenges• Low inventory per item• Constant turnover of product• Needed real-time solution
Real World Results: TurboTax
Profile
• 14M taxpayers
• Award-winning support site
Results:• 35% increase in site search
conversion rates within weeks
• 73% increase within a year
“The results were so overwhelmingly positive that it became a no-brainer.”
Chris Jones, Web Analytics Manager
Challenges• Taxpayers unable to find answers• Manually hard-coding content
recommendations in results• Rapidly changing content &
seasonality
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
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
Thank You for Your Participation!
• E-mail: [email protected]
• Twitter: @Baynote
Contact Information
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