Everyone has used Amazon, and most like the way Amazon personalizes pages for each customer. By paying attention to the kinds of books you buy (and what others buy), it offers (mostly) helpful suggestions about what you might want to buy next. So where are all the other personalization successes? Why is personalization talked about so much and so rarely done well?
At first glance, personalization seems like that rare win-win proposition—buyers get a better experience while sellers get higher revenue. And Amazon shows that, when done right, it can work beautifully. But it must be hard to do right, because Amazon is not only the most-cited example of successful personalization, sometimes it seems to be the only example ever cited.
What is the secret of Amazon’s success? Several related factors are probably the most important:
- The frequency factor.Book buyers return to Amazon on a regular basis, so Amazon gradually collects enough information to make personalization effective. If you are selling cars, it is unlikely that you will ever develop a pattern on your customers that holds up across purchases made years apart.
- The “no hands” factor. Unlike many businesses, Amazon’s book business does not require customers to answer any questions or perform any actions solely to inform the personalization engine of their preferences. Books are bought (or examined) frequently enough that no questionnaire need ever be filled out. Amazon expects customers to register, but uses cookies so they don’t need to sign in unless they are making a purchase. If customers visit your Web site less frequently (such as for auto sales), they will be more reluctant to register and the cookie you dropped on their last visit was likely stored on their previous computer (and is lost to the current visit).
- The stability factor. People tend to purchase multiple books on the same subject. Folks who buy one seafood cookbook are highly likely to buy another. Similarly, many readers buy every book from a particular author. Most businesses are not so lucky. A consulting firm can scarcely predict a customer’s future needs based on past purchases because their needs change as they are fulfilled.
From these factors, you can see how it is in some ways easier for Amazon to personalize its bookstore (and music store and a few others), while your business may not have those advantages. But are these factors really the root of Amazon’s success? Hardly.
The lion’s share of Amazon’s success does not derive from personalization. It is no more easy for Amazon to personalize your experience when you buy an electric shaver from them than it is for you to personalize your Web site. Shavers are bought once every few years and no amount of data could ever be built up to figure out what buyers want next. So how has Amazon become a leading retailer for products where personalization does not work all that well?
Amazon has two bedrock practices that guide its success, which they apply to their personalization features, but also to everything else they do:
- An obsession with the customer experience. Amazon works mostly because it is easy, reliable, and fast. When you shop at Amazon, you can usually find what you want, you can easily complete your purchase, and it shows up when you expect it to. Amazon is not usually the lowest-priced, but it is usually the most convenient. Amazon succeeds in large measure because it constantly tinkers with every aspect of both its Web user experience and its offline customer experience so it can improve every day.
- A relentless focus on metrics. It’s been said that Amazon can change a font for some text on a key page and in a few hours know whether more folks are clicking further into the sales experience or not. If they are not, then the font can be changed back. If the clickthrough rate is up, then the change was a success. But Amazon’s testing is even more clever—they can change that font for only certain visitors (it’s personalized, remember), and roll the change out to everyone if warranted.
The bottom line is that personalization is what everyone notices about Amazon, but it is probably the hardest thing to copy. What every business should learn from Amazon is how to put the customer experience above all else and to measure, measure, measure. Your business may require measurements that are harder to do than online sales (we discussed measuring Web conversions in a previous article), but that should not prevent you from keeping track anyway. So, the next time you visit Amazon, pay attention to what it does beyond personalization—that maybe those are the best practices to emuulate on your site.
