Making It Personal: How To Profit From Personalization Without Invading Privacy [Paperback]

There are very few books on the personalization issue so far. This is one of them. And it's very good.

The central DILEMMA of Kasanoff's book is this:
No one can enjoy the benefits of personalization if he is not willing to share the personal information necessary to make those benefits possible. And yet, by sharing that information, the person is risking his privacy in the bargain.

And the issue is much more complicated than most publications suggest: "Just as different customers have different needs from your business, different people have different levels of sensitivity with respect to protecting their own privacy".

Kasanoff refers to a story that we have all already heard, but this time it has a different ending: "We would all like to get back to the old-fashioned service where you return to your local merchant and he remembers that you buy large white eggs and that you like a special kind of fabric. But we wouldn't think so wistfully about this type of relationship if the merchant had run off and shared intimate details of your life with the blacksmith, the saloon owner, and the dressmaker".

Here are the four primary INDIVIDUAL BENEFITS OF PERSONALIZATION:
1. SAVE TIME: Eliminate repetitive tasks; remember transactional details; and recognize habits.
2. SAVE MONEY: Prevent redundant work; eliminate service components unnecessary to the person; identify lower cost solutions that meet all other specifications.
3. BETTER INFORMATION: Provide training; filter out information not relevant to a person; provide more specific information that is increasingly relevant to a person's interests; increase the reliability of information; replace "average" information with information specific to that person's environment.
4. ADDRESS ONGOING NEEDS, CHALLENGES, OR OPPORTUNITIES: Provide one-stop services; allow flexibility in work hours, job responsibilities, and benefits; accommodate unique personal preferences; recognize and reward achievement with special treatment.

Here are 11 WAYS TO MAKE IT PERSONAL, i.e. this is how a firm can deliver the benefits of personalization:
1. COMBINE: Merge information a person already has with that of others, to provide additional insights.
2. COMPARE: Show how prices, quality, or specifications of one option match up to others.
3. CONNECT: In most large firms, data exist in "silos" or departments. Firms can connect this data, providing a more accurate picture of the firm's interactions with that person. The flip side of this is that connecting previous disparate data removes a level of privacy.
4. EXPLAIN: Clarify how, when, or why to use a product or service, or to perform a task, precisely when a person needs such help.
5. FIND: Locate a person, product, or service based on supplied specifications.
6. MONITOR: Track the status of events, news, or actions of others.
7. RECOMMEND: Suggest a course of action based on historical data, the current environment, or predictive models.
8. REMEMBER: Most people are still more frustrated about what firms forget about them than what they remember. Mantra: "Never make a customer tell us the same thing twice".
9. REVEAL: Highlight a pattern or conclusion that was not previously evident.
10. SORT: Change the order or grouping of information, making it easier for people to see patterns.
11. TRIGGER: Prompt an action when certain criteria are met, such as the purchase of an item when its price falls below $150.

Finally, Kasanoff suggests that by making two changes in the ways employees are compensated; any company can simultaneously become more profitable and achieve the right balance between privacy and personalization.

Change #1: COMPENSATE EMPLOYEES TO SATISFY MORE NEEDS OF EXISTING CUSTOMERS.
In Kasanoff's experience - and I agree -, most privacy abuses stem from efforts by firms to use personal information to acquire new customers, not to better serve existing customers.

Change #2: DEVELOP MODULAR CAPABILITIES
To make the first change, companies need to accommodate the differences between individuals. Mass customization or Modular capabilities make it profitable for a firm to support personalized relationships. Customization becomes routine and cost-efficient, and in many cases costs will go down, not up. Much of the savings comes from the elimination of waste and the reduction of inventory levels.

Kasanoff was one of the original partners of the Peppers & Rogers Group that coined the term "one-to-one".

Having May 2004 finalised my Graduate Diploma in E-business with a thesis on Online Personalization, I must say that this book was one of my key sources, especially on the complex issue of balancing Personalization, Privacy and Profit.

If you're really interested in personalization, you may want to read my online review of: "The Power of One: Gaining Business Value from Personalization Technologies" by Nirmal Pal, Arvind Rangaswamy (2003).

A final quote from the foreword by Peppers & Rogers:
"Big brother is almost here. His sister is the telemarketing operator who called you during dinner last night. His nephew runs a sweepstakes and magazine-subscription service just outside of London. The same rapid advances in information technology that are pushing businesses into a new paradigm of competition - the one-to-one marketing paradigm - are simultaneously generating more and more opportunities for the abuse of consumer privacy by mass marketers. Making databases of sensitive, individual consumer information available to marketers interested only in next quarter's sales is like providing chain saws to a tribe of slash-and-burn farmers."

Peter Leerskov,
MSc in International Business (Marketing & Management) and Graduate Diploma in E-business

Here's an idea: Forget about the web personalization that makes Amazon such a wonderful site, or that has writers from Wired still breathing heavily, and instead imagine a world where personal memory is "everywhere" -- where your every conversation, trip, purchase, phone call, or jog with the dog is recorded, turned into a data file, and shared with parties beyond your control. Kasanoff explores this world, and notes that it's coming the day after tomorrow. This book is one-third business strategy guide, two-thirds global forecast, and the tale is plausible enough that executives who read it may want to pull the CEO aside at the holiday party.

Consider:

- Data trails are proliferating, and most companies have no plans in place to manage the privacy, legal, ethical, moral, managerial or competitive impacts of this information boom.

- A plan requires anticipating new privacy laws -- and there are ways to do this by examining history and the fundamental constructs of personal protection legislation.

- Acting on information can provide the economic benefits outlined in every 1to1 book or CRM software manual, but success requires self-critique. There are proven models to gauge your firm's ability to succeed with new products and services.

- Personalization means moving beyond technology to carefully migrate to a diverse business system, where complexity is constrained to keep costs to a minimum and modular capabilities change everything from product design to employee behavior.

These ideas are powerful. Along the way, Kasanoff shares stories about data pitfalls and exercises that inspire a team meeting at the nearest coffee shop. Consultants can always explain which way the wind is headed, but for a look at the weather beyond the next quarter, I recommend this book.

An enjoyable and provocative read, but very importantly, Bruce adjusts the dial and focuses a great deal on stakeholders and employees, who are, after all, critical elements in the achievement of customer satisfaction,loyalty, and profitability.

Bruce provides lots of examples personalization and privacy (and the lack thereof) that make one gasp, think, and question some of the longer term ramifications. He also offers some reasonable solutions and guidelines to help companies prevent a privacy faux pas.

Your next visit to the grocery store, weekend getaway, or web site will never be the same after you read this book!

Enjoy and beware!