RE: Is personalization really personal?

From: Chris.Toppe_at_arganet.tenagra.com, <Chris.Toppe_at_arganet.tenagra.com>
Date: Tue, 17 Aug 1999 18:28:22 -0500 (CDT)

I have been reading with interest the discussion of
one-to-one marketing and have a few comments. My basic
premise: Unless the number of items for sale exceeds the
number of visitors, then one-to-one advertising is
impossible. If a web site has 100,000 potential items to
sell to 1 million visitors, then the best it can ever do is
ten-to-one marketing. Further, using sophisticated,
expensive and time-consuming statistical techniques from the
direct marketing world (logistic regression for example), it
may be possible to predict which item any individual would
be most likely to purchase, but the cost of doing so over a
large number of items -- even if doable -- would more than
consume the possible profit. For example, if I could
segment my 100,000 visitors into 10,000 groups -- which I
think is impracticable given how long it would take -- I
could offer 1,000 people the one item they are predicted to
be most likely to buy. This would be a tremendous
improvement, but is it necessary? I know an insurance
company that broke its thousands of customers into 220
groups and realized both increases in sales and decreases
in claims. This cost them millions to do and they started
with a very detailed database. For selling low-margin
Internet items, such an investment makes no sense. The
idea of one-to-one marketing falls apart in the details.

Chris Toppe, Ph.D.
President and CEO
GuesTech
Baltimore, MD

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Received on Tue Aug 17 1999 - 21:31:59 CDT