Personalization is a process, in which companies individually focus on the customizability of the product or service based on the customer’s characteristics to promote sale and service. Customization of the product or service based on personal references is, in addition, a personalization process. Capital One promotes the individualized credit card design, for example, is one of the evidences that marketing pertinently leverages technologies in personalized marketing strategies.
Personalization helps build customer satisfaction and loyalty. Collaborative customization allows consumers to involve in the development process. For instance, according to their website, VisualHOMES, a software application for public housing management, works with the clients in series of collaborative sessions to modify the product that satisfies the need of the clients. However, personalized marketing must consider a relevant challenge about customer uniqueness, satisfaction, and involvement (Kotler & Keller, 2009).
One-on-one marketing requires the investment in information collection because it helps identify business prospects and customers, differentiate customers in term of their needs and their perception, customer interaction, and personalize product or service (Kotler & Keller, 2009). Online and E-commerce companies use personalized process to offer customer relevant products or services (Lee, Kim, & Park, 2007). Therefore, personalization is perhaps useful for E-commerce companies and involved with a long observation and data collection process. I think the consumer review offered by Amazon.com is brilliant in conducting marketing because it reflects the review of identifying issues in quality and customer perceptions of the products and services (Mudambi & Schuff, 2010).
I believe that in order to develop a personalization process, businesses need to understand the different types of personalization. As Vesanen (2007) pointed out, personalization can be different in many forms such as adaptive, cosmetic, and transparent type.
– Based on the demographic targeting or the information provided by customer, the adaptive personalization, online advertisement becomes the most effective marketing.
– Cosmetic personalization offers the packaging or presentation of the product or service based on customer preferences.
– Transparent personalization combines the information provided from customer and the information from the purchase history to create the content of advertisement.
Vesanen (2007) suggested the benefits of one-on-one marketing and the management of customer relationship together drives the needs for personalization. Additionally, the customer perception of product or service is an important factor for pricing and consumer loyalty. Businesses can create a strong rapport with customers by practicing individualization and personalization (Kotler & Keller, 2009). Personalization helps bond the customer relationship and loyalty because of the individual specialties in the personalized process.
*Kotler, P., & Keller, K. (2009). Marketing management. Upper Saddle River, New Jersey: Pearson Prentice Hall
Lee, H. J., & Kim, J. W., & Park, S. J. (2007). Understanding collaborative filtering parameters for personalized recommendations in e-commerce. Electron Commerce Res, 7, 293-314. doi 10.1007/s10660-007-9004-7.
Mudambi, S., & Schuff, D. (2010). What makes a helpful online review? A study of customer reviews on Amazon.com. MIS Quarterly, 34(1), 185-200.
Vesanen, J. (2007). What is personalization? A conceptual framework. European Journal of Marketing, 41(5/6), 409–418.