By David Dorf-Oracle on May 10, 2011
Amazon is pretty good at offering me products related to other products I've purchased or browsed, but it doesn't really vary the way in which those offers are made. It just says "Today's recommendations for you" and shows a few product images. But people react to offers in different ways. Some are data driven -- cheapest per serving; some are influenced by their friends -- most popular smartphone; some follow the experts -- editor's choice.
Dean Eckles and Maurits Kaptein have published their research on persuasion profiling, and the concepts are, well, persuasive. They paint a picture of retailers learning which types of persuasion are most effective for their individual customers. So in the future, Amazon might figure out that I tend to act on deals more than my friends' recommendations. Using that information could help them more effectively influence my decision to purchase.
Of course to get there, retailers need to collect lots of data on their customers including which offers worked and which ones didn't. Following the "crawl, walk, run" approach, analytics can determine which offer types work the best for the majority of customers. Then they can add more specificity by looking at the combination of product/offer for effectiveness. Lastly, the combinations can be associated to individuals.
For example, a retailer may determine that I buy music that is popular, movies that critics recommend, and electronics that are deeply discounted. That's my persuasion profile, and by carefully targeting me using that profile, they will garner more sales.
Eli Pariser of Wired takes things a step further by suggesting that our profiles might then be sold. Just as Web advertisers use re-targeting today to attract shoppers back to their abandoned carts, they could customize those ads to increase effectiveness. In terms of privacy, what's creepy to you and I is looked upon as a feature by younger generations so don't automatically dismiss this concept as too "big brother."
And you thought only serial killers got profiled.
You may have noticed that Oracle has moved to a new blogging platform. I lost some of the customization I'd made, so please bear with me as I figure this out. --Dave