Exercise Restraint

Marketers warn thereÕs a fine line between personalization and privacy

YOU’VE COLLECTED NAMES, ADDRESSES AND PHONE NUMBERS. You know number of children per household, birthdates, shopping, entertainment and travel preferences. Medical histories, credit records, mortgage payments and even expectant parents’ due dates are on file too. But now that you have all that data, how much should you actually use it?

Many marketers try to heap as many data specifics as possible into offers to underscore that they really know who they’re talking to, notes Patrick Fultz, vice president of marketing at New York-based Channell Communications Inc. But holding up a mirror to the consumer in this way is not likely to reflect well on the marketer.

“Consumers can be two-headed about personalization,” says Fultz. “They don’t want to know that you have all this data. They want privacy, but also want you to know them as a customer.”

Resisting Temptation

Just because you know, for example, that Jane Doe leased a red, five-speed Honda Accord with a tan interior, leather seats and a sunroof, doesn’t mean you need to include every last detail in a renewal pitch, says Fultz. A simple photograph of the car, along with a note that reads: “Hope you’re enjoying your Honda” is appropriate and subtle, he says.

Bob Hacker, CEO of The Hacker Group, a Seattle-based direct marketing company, has experienced the temptation to pull out the data stops. But restraint served him well in the sensitive area of finance, he says, when creating a direct mail offer for a mortgage company client. “We were doing a lead generator. We had rented files with data that showed the purchase price of the homes,” he says. “We wanted to use it, but knew we couldn’t without possibly angering or alienating recipients. So we dumbed down the information and made it very close to each person, but not actual.”

The results, he says, speak to value of relevance and subtlety: 2% of recipients refinanced their homes, a response Hacker judges successful. He advises marketers to keep in mind the question of how much to reveal when creating campaigns. “Just because you have data,” he says, “doesn’t mean you should use it.”

Don’t Assume Too Much

Personalization can feel invasive, not only when marketers reveal too much, but also when they assume too much. Whit Andrews, a research director at the Gartner Group, recalls how he once bought his wife an outfit through a discount clothing site. “I still get offers that ask if I want to buy a great bra,” says Andrews. “They haven’t looked at who I am.”

“You can’t reduce a person to a rule,” argues Sandeep Krishnamurthy, a professor of Internet marketing at the University of Washington. “It takes a long time to know someone,” he says. “It’s anti-business and anti-consumer when you act like you know someone and you don’t.”

Dell.com makes no assumptions about its users, says Sam Decker, senior manager of Dell.com’s consumer e-business. The three-year-old Web site is renowned for its self-directed model that lets visitors configure their own computers, manage their own accounts and solve their own technical dilemmas through a natural language database. Thus far e-mail offers are limited to products that have an unquestionable connection to a previous purchase — a software upgrade, for example.

Decker says Dell.com is just beginning to test offers that are not as closely tied to past purchases as its current offers. But he is treading lightly. His concern is that nothing gets in the way of people getting what they want — which he feels often occurs when personalization is poorly executed.

“We work diligently to make sure that doesn’t happen,” Decker says. “We want to help customers without getting in too deep.”

Walking the Tightrope

Some universal guidelines do apply, says Fultz. The challenge for marketers is to carefully consider how to present — and interpret — the bountiful data available to them, and to walk the tightrope between too much and not enough.

“It comes down to businesses understanding where the line is and using information to give meaningful, relevant offers,” he says. “That’s the part everyone misses.”