Natasha Singer’s NYT article has me thinking again about how long it has taken for companies to get even a basic understanding of personalization’s challenges and potential.
Personalization has to first and foremost benefit the individual, but this is really hard because we’re all different. Companies screw up when they apply a mass production mentality to personalization, which is how I would characterize the Urban Outfitters notion that all men only want to see men’s clothing.
As you probably know, there are two main approaches to online personalization, either implicit or explicit. The former makes assumptions based on what you do (i.e. check the sports scores every day); the latter accepts your specific input (I.e. “I liked this article on quantum physics”). Generally speaking, explicit works better but participation rates go way down when sites require explicit personalization. Pinterest largely solved this problem by creating a really fun way to gather a user’s explicit input; in fact, most people don’t realize they are giving Pinterest explicit personalization input when they “pin” something.
Far and away, the biggest challenge in personalization is creating a corporate culture around the notion of personalization. (It’s a big mistake to think technology is the limiting factor.) Most business models are skewed heavily towards selling rather than serving, and towards pushing products rather than pushing boundaries. I can name very few companies that have figured this out. Zappos and Amazon have come close.
Ultimately personalization is about acting smart. Smart people/companies have something of value to say, and know the difference between what’s of value to you and what’s of value to me. Michael Hinshaw and I wrote Smart Customers, Stupid Companies as a warning to CEOs that acting dumber than your customers is not a sustainable business approach, and that wireless devices make it inevitable that customers will increasingly expect meaningful personalization.