Is personalization right for your site?

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If you're serious about being a long-term player on the Web, you're going to eventually need personalization. As smart Net marketers continue to integrate their Web sites with their company's back-end computer systems, one element to consider is whether to build a personalization function into your site.

But first, it's important to understand what personalization is.

John Bourne, exec VP, Micromass, a Raleigh, N.C., software company, says it's an often misunderstood concept.

He suggests looking at personalization this way: Your HTML files and folders are your storefront and display cases. A database will hold your inventory and an electronic commerce program may act as your cash register.

Where it fits in the process

What's missing is a salesman and that's where programs like Micromass' IntelliWeb fit in.

"If you went to a jeans site and gave it your age and weight, it would take you to the right section," he says. Personalization software should do the same thing.

How do you create a Web-based sales staff? Several approaches -- implemented so far by more consumer marketers than business-to-business marketers -- are being offered.

GroupLens from NetPerceptions, Minneapolis, matches a database of users' preferences to other users' input and delivers product recommendations. This is called collaborative filtering. Movie rental shops may call it staff recommendations.

BroadVision One-to-One Web App from BroadVision, Los Altos, Calif., matches a new user's input to a set of predefined rules. BroadVision calls it rules-based reasoning. Clothing shops call it sizing up the customer.

Brightware from Brightware, Novato, Calif., forwards e-mail based on keywords and predefined rules. Brightware calls this a case-based reasoning tool. Stores know it as their customer service procedures.

Cost is a factor

These digital clerks, unfortunately, cost a lot to create.

Collaborative filtering techniques work best when they're matching huge databases. The software may cost between $15,000 and $50,000, and a total solution may cost more than $250,000.

As a result, most sites offering personalization now are high-traffic sites selling consumer products. Bookseller Amazon.Com uses NetPerceptions software, while rival Barnes & Noble uses Firefly Network's Firefly Passport software to offer book recommendations, for example.

Cost concerns

But personalization software vendors are now addressing the cost issue in innovative ways.

Wisewire, Pittsburgh, offers its software on a service-bureau basis. You can filter content through its server based on five subjects for $900 a month.

Having trouble finding the expertise to design and develop your own custom solution? PersonaLogic, San Diego, will do the design for you, even host it on its own server, and offers revenue-sharing arrangements for payment.

Personalization solutions may need a huge database to be effective, so Firefly, Cambridge, Mass., has proposed an open profiling standard to let sites exchange data with permission of users.

Microsoft Corp., Redmond, Wash.; Netscape Communications Corp., Mountain View, Calif.; and VeriSign, Redwood City, Calif., all support an open profiling standard.

Microsoft has included support for Firefly passports in Version 4.0 of its Internet Explorer browser.

Should be part of strategy

"These solutions do not get built overnight," warns Kirk Klasson, director of marketing-knowledge management, Cambridge Technology Services, Cambridge.

So look closely at your business plan before considering personalization, says Geoffrey Bock, an industry analyst at the Patricia Seybold Group, Boston.

It "has to be bundled with the vision of what you're trying to accomplish" to pay off, he says.

Manufacturers and resellers have different needs, in other words, requiring different sales skills and, thus, different software solutions.

Ross Rubin, group director of the technology group at Jupiter Communications, a New York market research firm, suggests this may be a decision you can defer for now.

"Most sites can't justify the expense today," he says.

Still, if you're serious about being a long-term player on the Web, you're going to eventually need personalization, says David J. Centner, CEO of Web site developer K2 Design, New York.

"We always recommend a personalization component," he says. "They don't always buy it, because it's expensive at first."

But if you plan to be serious about the Web in the 21st century, he says, it's a bullet you'll have to bite eventually.

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