CRM - January 2008 - (Page 29)

BEHAVIORAL TARGETING Jia argues that past efforts to target based on personalization within sites have not worked because marketers were fixated on “rules-based personalization engines,” and, as such, blamed failure to the lack of data. While data is important, he says, “The issue is not about having more data. You can’t personalize me, because there’s too much of me,” he adds, noting that it depends on the context of the behavior displayed. Product recommendations on the home site differ from those on external sites because even with all the data in the world, you’ll likely only end up displaying the most popular, not the most relevant. By understanding the principles of social psychology, Jia recognized that, as in real life, individuals behave alike as a result of their context. Users, he says, are demonstrating what’s useful, or not useful, to them based on their actions on the site—spending time on a piece of content, interacting with it. “They’re voting with their feet,” he says. Essentially, marketers can map the behaviors of like-minded users to determine what the most relevant content should be. Businesses are still reluctant to let go of what Jia refers to as the “expert mentality.” Believing they know what the customer wants, marketers fail to reap the benefits of allowing their customers to organize their own preferences. As an example, Jia refers to how a search for the word “hammer” on HomeDepot.com does not bring up what customers would immediately want when searching for “hammer.” Instead, the first page is dominated by power drills that have the word “hammer” in the product name. US Appliance, a Baynote client, recognized a similar inconvenience on its Web site. When customers search for “stove,” results often lead to other appliances because the technical name for a stove is “cooktop.” After implementing Baynote, the company’s Web site now has a separate “recommendations for item” box at the top, which reflects the course other consumers www.destinationCRM.com WHAT’S NEXT? “WE DO OURSELVES A DISSERVICE BY BASICALLY BURNING OUT THE CONSUMERS BECAUSE WE DON’T KNOW WHAT THEY WANT.” found most applicable when searching for similar products. The same was true at Education.com, a publisher of scholarly works focused on child education. “We really wanted our users to become part of our site,” says Todd Schwartz, vice president of marketing for the company, where he helps parents access the most relevant information as conveniently as possible. “Strict search wasn’t doing it for us,” he says. “We want to make sure that when you’re on that page…you’re surrounded with content that is consistent with that experience.” To achieve that goal, Education.com rejected basic search technology and instead relied on the research paths forged by users who have given their “manual approval,” he says. This technology is present on other Web sites, such as Amazon.com with its “Customers Who Bought This Item Also Bought…” function, and, similarly, Netflix’s “Movies For You.” In fact, Netflix is offering $1 million to those who can “substantially improve the accuracy of [preferred-movie] predictions,” based on selections made and self-identified preferences. (More specifically, the company is looking for technology that can achieve recommendations 10 percent better than its current software, Cinematch.) On each of these sites, the technology creates a highly relevant experience, which will in turn increase conversion rates. Although behavioral targeting has yet to achieve mainstream adoption, experts have no doubt the rest of the industry isn’t far behind. “Much like direct mail in the [1970s]…people started off slow—didn’t know what they were doing, didn’t know how to target,” Howe recollects. Eventually, he says, people got progressively better, and he predicts the same pattern will unfold for behavioral targeting as marketers apply offline lessons to the online world. As BT reaches higher levels of sophistication, Vanderhook believes the next steps will be focused on truly achieving the dream of creating that highly coveted 360-degree view of the consumer. By combining demographic information and behavioral targeting, marketers will be able to determine not just which campaign to deliver, but which specific creative materials. Vanderhook illustrates a scenario where marketers can, in real time, identify whether the user is an 18-year-old male who would rather see a Honda with a pretty girl on the ad, or a working mother who would respond better to a Lexus ad with family-oriented features. Technology is working to ameliorate the age-old marketing dilemma. As Howe states bluntly, “Stop bombarding your clients with crap.” When it comes to customer relationship management, he says, “We do ourselves a disservice by basically burning out the consumers because we don’t know what they want.” In an era supposedly marked by an empowered consumer, marketers are being put to the test: Do it right or don’t do it at all. But Howe seems confident that marketing’s role in the overall consumer experience is here to stay: “We’re going to evolve more, and more money’s going to be spent on technology that offers consumers a better indication of a product or service that is aligned with their desires, wants, and needs.” Contact Editorial Assistant Jessica Tsai at jtsai@destinationCRM.com. 29 CUSTOMER RELATIONSHIP MANAGEMENT | JANUARY 2008 http://www.Education.com http://www.HomeDepot.com http://www.Amazon.com http://www.destinationCRM.com

Table of Contents Feed for the Digital Edition of CRM - January 2008

CRM - January 2008 Contents Front Office Reality Check Customer Centricity The Tipping Point Facebook's About-Face On the Scene: Oracle OpenWorld 2007 CRM Market Set to Double Customers, Meet your Makers Required Reading Oh, Behave! Fine-Tuning the Channel Listen Up! The Master Piece Flying High on Customer Service Let's Get Digital The Big Rigs Get Revved Up Putting Asia in Your Pocket Secret of My Success Connect Re:Tooling Pint of View

CRM - January 2008

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