Why are marketers across all industries zealously collecting as much information as possible on their customers? Because in a world of commoditized products and services, they hope to differentiate themselves from the competition by engaging more effectively with customers.

But what does that really mean?

"Engaging more effectively" is shorthand for achieving that deeper level of personalization that makes customers feel as if you know them. Whether they purchase products or services online, walk into a shop or pick up the phone, you remember their preferences and behaviors. That's the elusive 360-degree view—you know what they buy, how they browse, and what kind of communications and offers ring their bells.

Marketers apply this information throughout the customer journey to provide relevant offers, improve communications, and increase engagement. In other words, they want to get their customers to do something.

Getting to Know Your Customers

But what if you don't have a profile to work from? Stitching together fragments of data collected from Web visits, coupon redemption, loyalty points, purchases, and abandoned carts is challenging.

Most organizations only know a small fraction of their customers. Which makes implementing personalization initiatives a stretch. If you don't know them, how can you convince them you do?

Certain popular online travel agents (OTAs) have the right idea. They use what they can see about visitors (no matter how little) and analytically compare that to what happened with other guests who looked or behaved like that. By tracking search behavior and clicks, a picture begins to form of what they might be looking for, and maybe a bit about how to approach them.

Some actions are based on simple business rules. If the visitor searches for resort properties, show beach pictures in the sidebar. Others rely on predictive analytics, though perhaps using limited data. Comparing activities of unknown visitors to those of "known" guests, OTAs proactively surface what they hope is relevant content. They predict "next best offer," record visitors' reactions, and incorporate that into deciding what to surface next.

Say a visitor returns to a site three times without pulling the trigger. Logging what properties he or she viewed and comparing that to visitors who booked rooms, the visitor might surface an offer that has successfully converted other reticent customers with similar viewing patterns. You still don't know much about the visitor, but you will next time. By recording IP addresses, OTAs recognize that unknown guest on the next visit and use what was learned from the previous search behavior.

Cutting Through the Clutter

Marketers across all industries are helping online visitors cut through the clutter to find what they are looking for. And while the results will not be as accurate as with a richer profile, they can at least start testing and learning, and trying to provide a step beyond a generic Web experience.

For both known and unknown guests, the same key tenets underlie any offers you surface or paths you encourage:

  • Offers should be profitable. Drive business where it's needed to avoid revenue dilution. Incorporate revenue management forecasts and price recommendations when delivering offers on the website and anywhere. Carefully assess customer value so you don't over-incentivize guests.
  • Make doing business with you easy. Don't forget while intelligently surfacing content and improving the guest website experience, that your goal is to convert.
  • Be cautious with profiles and business rules. Remember that demographic data alone does not form a complete picture of a guest. Behavior and context are equally crucial elements. For example, treat the business customer taking the family on vacation quite differently than when she's swooping in solo for a meeting. Simply applying business rules to demographics delivers bad decisions.
  • Don't cross the line to creepy. Just because you can mine guests' Twitter pages or friend them on Facebook doesn't mean you should use all that data directly. Winning companies will properly operationalize information to improve the customer experience. It is easy to get this wrong. Many companies do. For every piece of data you collect or insight you glean, ask yourself what you would use it for. If you don't have a good answer, don't.

Differentiation in the noisy digital space is increasingly difficult. Customers come to you through varied paths for myriad reasons. The digital crumbs they drop along the way can provide opportunities to improve their experience, build their loyalty and repeat business, and boost revenue and profits—even if you've just met them.

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image of Kelly McGuire

Kelly McGuire, Ph.D., is executive director, Travel Practice, at SAS, an independent vendor in the business intelligence market.

LinkedIn: Kelly McGuire