Personalization Tools Dig Deeper

Vendors are linking tools with CRM, content-management, and other IT systems.

InformationWeek Staff, Contributor

August 23, 2001

8 Min Read

Each of the 7 million customers who dialed Bell Canada's customer-service line last year talked with a representative working from a fixed menu of information. The agent could access the customer's billing history, notes from previous conversations, and a list of general products or services he or she might try to sell to the customer.

But the telecommunications company was missing opportunities, says Michael Stanford, group manager of wireless loyalty and revenue management at Bell Canada. So in July, a pilot group of call-center agents in Toronto and Montreal began taking calls using RealTime, a marketing engine from E.piphany Inc. designed to personalize each customer interaction. These agents now can access Bell Canada's database to pull not only the customer's history, but also psycho-demographic information and other sales flags, such as whether the customer is at high risk of switching carriers. The reps also receive a tailored list of suggested alternative products and services from the RealTime recommendation engine to offer the customer. "We don't have any official numbers yet, but on our daily results, we're starting to see sales lifts," Stanford says.

Personalization is about providing the right information to the right person at the right time. The goal: to make more efficient use of employee, partner, or customer time; increase the value of each interaction; and boost sales. As the tools for personalization have morphed into other IT systems, such as marketing management, content management, and portals, businesses looking to build personalized relationships with customers, partners, or employees have more options than ever. The challenge, however, is to determine when it's time to use personalization tools and with which IT systems.

"There's a lack of interest in personalization for its own sake," says Jim Murphy, an analyst with AMR Research. "Personalization doesn't mean anything unless you can attach it to something." Veterans of Web-based personalization, such as Art Technology Group Inc. and BroadVision Inc., have learned that and are extending their tools deeper into the organization by selling complete portals and content-management software, respectively. Meanwhile, Siebel Systems Inc. is developing personalization tools to increase the value of its sales-force-automation and customer-relationship management systems, looking to stay in step with Web-based competitor

E.piphany, which merges personalization with real-time analytics. Content-management vendor Vignette Corp. and IBM, which sells portal software, have been adding personalization as a standard feature.

Athletic shoe retailer Road Runner Sports in San Diego wants to build a tight relationship with online shoppers, just as it does with customers in the store or on the telephone. What's more, it wants to offer special treatment to its best customers, regardless of the channel. So in March, the company began to use personalization to create a tiered Web site that mirrors the lifetime value of each of its customers.

Using BroadVision's Retail Commerce and One-to-One Publishing software, Road Runner stores profiles created by its online customers and matches them with spending habits. The site automatically shows Road Runner Club members, who typically have a 10% to 15% greater overall lifetime value than non-club members, more informative articles and special offers than it shows to nonmembers. VIP members, who have a 15% to 20% greater overall lifetime value to the company than nonmembers, automatically receive even more in-depth content, including special "VIP sale days" that offer special discounts to the big spenders.

The personalization tools also pull stored customer data to serve up products specific to that customer. For example, a customer who listed a knee injury in his profile might receive a special offer for a book on physical therapies for injured knees. Such personal service is paying off. Since the system was installed, Road Runner's average order value has increased $5 to $7 per customer, and conversions from visitor to buyer have doubled from 3% to 6%. "Because we can treat [customers] like they're special on the Web, we're seeing more of them purchase on the Web," says Kate Budd, director of brand and Internet marketing at Road Runner.

Business-to-business companies also use personalization to increase sales--but even more important, they use it to develop relationships., an online information and communications portal for the retail pharmacy industry in Alexandria, Va., selected its content-management system knowing that personalization would be the cornerstone of its business: facilitating relationships between 3,500 buyers of pharmacy products and their 1,400 suppliers.

This year, the site, a for-profit subsidiary of the nonprofit National Association of Chain Drug Stores, launched Vignette's Content Management Server and Lifecycle Personalization Server to help manufacturers create and manage content for delivery to retail pharmacy buyers interested in specific products. For example, Proctor & Gamble Co. could announce a new shampoo to key members of the association who buy hair-care products, based on an implicit or an explicit understanding of what those buyers want. Implicit information analyzes the type of retail chain and its geographic location with demographic software, while explicit information comes directly from the users.

By letting both buyers and sellers personalize the type of information delivered, ChainDrugStore is able to lower the costs for both parties, all while charging manufacturers a fee for pushing content to targeted buyers. It works for the buyers because smaller retailers that don't get as much attention from manufacturers now have access to product news and data through the site. Meanwhile, smaller manufacturers that could never get face time with a large-scale retailer such as CVS Corp. can push items to a CVS buyer. "Our ROI is measured by whether or not we can deliver content effectively and deliver the retailer to the manufacturer for the sale," says Todd Grover, VP of technology operations at ChainDrugStore.

Channeling information in a business-to-business environment is more complicated for Inc. in Houston. The site's ultimate goal is to foster million-dollar trades between commodity chemical makers and buyers. It has a wider audience that includes market analysts and viewers who aren't authorized to make trades, but for whom CheMatch wants to be the official industry information provider.

"In B-to-B, it's not about a pretty picture; it's about getting the junk away from the users and getting them what they want to know," says Roberta Kowalishin, senior VP of business development at CheMatch. "Analysts might want news, but traders moving millions of dollars worth of chemicals don't want news unless it's relevant--they want to get to the floor and start trading."

During the past few months, Kowalishin has watched at least 30 competitors in the chemical dot-com business shut down, so she knew CheMatch needed to create an extreme value for its users. The key to survival is real-time personalization. First, CheMatch added Art Technology Group personalization tools to its existing ATG Dynamo 4.5 platform running on Exchange servers so users can preselect what types of information they want and then design their own viewing pages.

Most important, however, the company is using the tools to collect real-time chemical pricing information across the selling sites and deliver it to buyers and sellers based on their specified preferences. "This industry has needed an intraday pricing service, and we're the only place that has it," says Kowalishin. Without CheMatch, traders and analysts have had to rely on weekly reports from sellers.

The portal market for information delivery is ripe for personalization tools that will create a competitive advantage. In most portals, basic personalization means letting users arrange the layout of their own screen and create an individual work environment. But Larry Bowden, VP of portal solutions at IBM, says customers are demanding new features, such as rules-based personalization that lets portal customers or employees access information based on their status in the organization. They're also requesting observation engines that make recommendations to users on where they can find the information they're looking for based on clickstream analysis.

IBM's next generation of personalization tools, which will be unveiled at the end of the month, will include location-based services for wireless users and intelligent notification. "My portal will look at where I am, what I'm doing, and where I should be and apply that to the information it already has," Bowden says. "So if I'm an hour away from the airport and my flight leaves in 30 minutes, my portal will notify me on my cell phone that I'll miss my flight and offer me an opportunity to reschedule online."

Such developments may be worth watching, says AMR Research's Murphy. There's an increasing opportunity to stay with trusted vendors and already-installed technology and still get the personalization features that match the business' needs.

For example, a company that has installed Siebel's CRM system might want to wait until the vendor refines its personalization tools rather than turn to a new vendor for a personalization strategy. Or, if increased internal productivity is the order, then personalization and portals from a big company such as IBM might be the answer. But if a company is about to consolidate Web pages, it may make sense to go with a content-management vendor such as Vignette that can do the job and add on personalization features after the fact.

Personalization tools may become commodities in the near future--a development that could bring security to business customers. In the end, the market for the small, pure-play personalization vendors likely will diminish as the big players such as IBM take over, Murphy says. "Those companies are good to deal with, and you know they're going to be around in a year."

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