Personalization Technology

Personalization is the process of building customer relationships and increasing profits by designing goods and services that better meet customers’ preferences. It involves not only customers’ requests but also the interaction between customers and the company. You are probably familiar with websites that tailor content based on interests and preferences. Amazon, for example, suggests products users might enjoy based on past browsing and purchasing habits.

Customization, which is somewhat different from personalization, allows customers to modify the standard offering, such as selecting a different home page to be displayed each time a browser is opened. Personalization and customization help companies meet customers’ preferences and needs.

Because of this, customers often experience a more efficient shopping process and, as a result, are less likely to switch to competitors to get similar products or services. However, using personalization requires gathering a lot of information about customers’ preferences and shopping pat-terns, and some customers get impatient with answering long surveys about their preferences. In addition, collecting this information might affect customers’ sense of privacy.

To implement a personalization system, several IT tools are needed, including the Internet, databases, data warehouse/data marts, data-mining tools, mobile networks, and collaborative filtering. Collaborative filtering (CF) is a search for specific information or patterns using input from multiple business partners and data sources. One application of collaborative filtering is making automatic predictions about customers’ preferences and interests based on similar users.