Personalization does not have to be “Creepy”

On Sunday, The New York Times ran an article arguing that retailers’ personalization attempts are backfiring because they are becoming too personalized. The piece quoted several retailers who had tested sophisticated personalization tools with poor results. They concluded that consumers just don’t like it if retailers know them “too” well.

I think that conclusion is off the mark.  Retailers are having problems not because they are too personalized but because they are not giving customers the four things needed to make personalization succeed:  Transparency, Control, Accuracy and Trust.

Let’s start with transparency. People feel something is “creepy” when they either don’t understand it or didn’t know it was happening.  Personalizing your site is meant to help the customer–so treat it like the awesome feature it is instead of a devious secret you don’t want the customer to know.  Announce on your Web site that “The site will get better with every click you make.” Tell customers from the beginning what you think you know about them (and how you figured it out) and update it as they click so they can see how your algorithm works.  Most people are secretly enamored with what technology can do and a site can go from “creepy” to “cool” very quickly if you just explain how you do your magic.

Second, to succeed with hyper-personalization, a site must give their users control.   People really like to be in control (just read Dan Gilbert’s popular book Stumbling Upon Happiness).  When personalizing a site, give your users a chance to change what you know about them, and/or turn it off completely.  Most people won’t make a change, but everyone will appreciate that they could.  On top of that, people have a strong psychological urge to change things that look incorrect. So if you make it easy to change the things that might be wrong, you’ll have users happily giving you the correct information.

Third, to win at personalization, a site has to be accurate.  The New York Times article cited an example about women with families who complained that a retailer showed them only women’s clothing (and not men’s) because of their gender. This is not a problem of hyper-personalization; this is a problem of inaccurate personalization.  Companies assume the best way to “understand” a user is to watch the few things they click and buy (and where else they travel on the web) and make judgments based on that, but that is the equivalent of watching a person shop for a few pairs of jeans and shorts and then assuming that they are not likely in the future to buy shirts.   Great personal shoppers interact with their customers and start a dialog–they talk to them and find out what they really need both now and in the future.  If you really want to be a retailer who differentiates on personalization, you are going to have to do the same.

Which leads me to the final  (and probably the most difficult) challenge:  Trust.  Consumers will be willing to give you their information and let you use it if they trust that you have their best interests at heart.  If your company is using personalization as a way to boost revenues, you’ll only get so far —  the customer will quickly become aware of this and feel exploited. If, on the other hand, your company truly is dedicated to building a great customer experience (even above revenue) your customers will be much more willing to share their information.  Most retailers would say they are customer-focused but few really are.  A good litmus test:  Would your company prioritize an investment in personalization if people loved it but it was guaranteed to produce no additional revenue?

So there you have it–sites can succeed in personalization, but they need all four of Transparency, Accuracy, Control and Trust.  Or to say it in a pithy way, sites will need a whole lot of TACT.

Why you should be user-testing…now.

If you are developing a new product, chances are you want to wait to show it to anyone to critique until you have it mostly in place.

Why? You have a great vision as to where the product is going and you want them to see the final realized product before making any judgments.  Cooks don’t pass along half-cooked meals to try…why should you with your creation?

Well actually, cooks do put menu items they are working on in front of real people all the time:  they become “daily” or “seasonal specials”.  If the special does poorly, it’s back to the drawing board; if the special does great — it finds its way onto the permanent menu.

The reality is, you as an expert in your field suffer from what the Heath brothers call the Curse of Knowledge.  When you are building out a product, you spend almost every waking hour thinking about the nuances of how it will work.  You live it, dream it, breathe it.  That’s awesome and super-important.  BUT… you have now spent so much time thinking about a product that it is impossible for you to see it through the eyes of someone who has never experienced it.

When a user tries your service for the first time, they won’t know all of the things that seem completely obvious in your head.   They are just trying to understand your great idea for the first time.

Enter user-testing.   Every time you are releasing a new feature, put it in front of users in your target audience who you have never asked…. Constant user-testing will allow you to find problems earlier than expected and figure out solutions to those problems that you might not have come up with on your own.

Do a few user tests and you’ll be surprised.  Sometimes very surprised.  You’ll end up building a much better product for it.  But to really succeed, you should be doing that (and AB testing) all the time.

So, how do you get started?

You don’t need a big firm to get results.  Basic or what I call “scrappy” user testing will get you pretty far and is pretty inexpensive and easy to do.

1) If you don’t own it already, buy Rocket Surgery Made Easy.  It’s a great overview of user-testing with great instructions and many more reasons why you should do it.  It’s a super quick read and provides a great guideline/framework.

2) Then get a pipeline of users in place.  So how will you get people?  Just ask.   Email a variety of current / prospective users.  If you are just getting off the ground, use your networks.  Ask your friends for their friends.  Post on Facebook and LinkedIn.  Ask people in your building.   You’ll be surprised.   Most people who would be your customers would get excited about being able to test things before anyone else and to have their feedback matter.  It’s worth much more to them than any other compensation.

3) Figure out things you can test now.  If you just have a mockup, you can test it by showing it to people and asking what stands out, what they think different sections would do and how they would perform a task.   If you have a half-working product –that’s ok too.  Just to set expectations appropriately:  You are not trying to figure out if they will love or even use your product  (it’s really hard to get accurate answers to this user-testing).  Instead, you want to know — where are they confused?  What makes sense and what doesn’t?     What do they see and what do they completely ignore?

4) Schedule all of your user testers to start on the same day. It will allow you to get all of your materials together and you won’t put too much emphasis on one person’s opinion. Later,  you can start setting a weekly schedule or bi-weekly user-testing day so you can build it into a habit (At Shop It To Me, we do ours on Wednesdays).

5) Make it accessible to everyone on your team and encourage them to watch it.  We use skype screen sharing as well as Silverback for recording.  We also transcribe the session into Google Docs for people who want a quick read (this does introduce some author/transcriber biases, but in the end we feel it is better than not having it).

6) Then just do it.  It will be eye opening.   Trust me.

Even if you aren’t building out a product, get a feel of what it is like by participating in a user-testing session.  As I said above, we generally user-test at Shop It To Me on Wednesdays.  So if you ever want to user-test our new products and see what it’s all about, just send me a line!  We’d love to have you!

 

Business Lessons from my 10-month Old

Just in time for Father’s day, I wrote a new article for Inc.com called “Business Lessons from my 10-month old”.  Enjoy!

http://www.inc.com/charlie-graham/business-lessons-10-month-old.html

 

 

 

Blue Oceans

In my previous post I talked about how having a focus is super important to a product’s success.  The question comes, what to focus on?

Here’s one angle.

I have been a big fan of Kim & Mauborgne’s Blue Ocean Strategy since I first read it in 2008.  If you haven’t read it yet, I encourage you to get it.  The basic premise is well known.  Instead of competing on the same attributes for the same customers as everyone else (i.e. red ocean), go after the customer who is not served and focus on the attributes most important to them.     For example, take Southwest, who carved out a great business for themselves by competing not with other airlines, but for the customers who normally take buses and trains.  And there are dozens of other examples of companies who got their first foothold going after markets that did not really exist beforehand (Honda and racing motorcycles, AirBNB and the home-owner willing to rent on a nightly basis, Salesforce and small sales teams without IT resources).

When I started working on Shop It To Me in 2004, buying apparel online impulsively was a blue-ocean.  Online shopping at the time was optimized for planned purchases — electronics, books and DVDs. Comparison shopping sites ruled the day and few people (women included) thought of it as a place to buy clothing and certainly not impulsively.  I believe a 2004 survey showed that 75% of women would never buy clothing online because of fit issues.  Sites like Gilt Groupe did not exist; apparel retailers were still looking at the Internet as an experiment, and designer brands often did not even have a website let alone a store.   Investors looked at our service — a free personal shopper that would get people to buy items they didn’t plan on buying that day — as a novelty.  Who would buy clothing on impulse without being able to try it on?  47 of the 50 investors I pitched turned me down — mostly because they did not think impulse apparel purchases was a big enough market.

Today the impulse shopping space is a complete red-ocean. Hundreds of companies are trying to be in the “discovery” or “sample sale” space.   The fact Shop It To Me launched and built out our site before these sites existed gave us a huge advantage.  We were different and were able to build out our brand identity before the space got crowded.  It allowed us to grow our user base and leverage that base to make our future products even better.   Had we started now, we likely might not have separated from the noise.

When you think about the market you are in, instead of blindly going after the same customers everyone else is going after with the same features and attributes,  step back and think — who is NOT using the product?  Who is underserved?  Who do all of the competitors overlook because they are just not profitable enough?   What do those people value the most and what product would best suit them?    If you see an opportunity, sacrifice the “good users” and go headstrong into this new market instead.   Focus on just the attributes that will help those people and get them to pay up.  Keep building and take that market away.    The entrenched players won’t be able to compete and you may end up the leader of a new market bigger than the one that currently exists.

Focus: What is your product going to be awesome at?

One of the most important things to do when you are building a product of any size is to focus.   Pick the few things you are going to be amazing at and the many things you will not be.  It’s hard, but it’s the only way to succeed.

Try to be great at everything and you’ll end up with a mediocre product.  Focus on one thing to be great at and you have a chance to dominate your competition.  Why?  You can align your entire company (sales, marketing, product, dev) on just one goal and therefore do it so well nobody can compete.

Take Google Search.  Since their launch their focus has always been one thing:  Get you an answer to your question as fast as possible.  Their home page doesn’t have ads or news or anything but one big search field.  Most of the features they add have traditionally been about making that better.  Or take Walgreens. They don’t have the best selection or the lowest prices.  But they succeed because they are the most convenient with stores on pretty much every corner.  They’ll pay up to be on every street corner so that at the moment you need something you first come to them.

When we are thinking of building out a new product, I generally ask three questions: Where do we want to Win? Where are we just going to Play (and be just good enough)? And where are we purposely going to Lose (and let someone else win)?  A great product will have all three.

At Shop It To Me, we want to win on personalization — understanding you, the consumer, like nobody else  and then showing you the most personally relevant items on sale.  And almost everything we do reflects that.  We launched first in a category (clothing) where personalization is super-important.  We require all of our users to tell us all of their individual preferences before they can sign up.  We have invested in sophisticated technology to figure out which sizes a retailer has available each morning and which are sold out so that your email only has items in your size.

When it comes to personalization — we purposely do the hard stuff.  Our system knows which items you have seen before so you don’t get duplicates and even tries to guess items and sales you might like based on not only your behavior but the preferences of others like you. We send millions of emails every day and each one is different —  individually personalized for its recipient.  It’s the reason why my mom, my wife and my teenage cousin can each feel like the Shop It To Me emails they receive are “just for them”.

To keep this focus, we are willing to give up on winning other things: We don’t have a celebrity promoting us; our site is pleasing but there are many that are prettier; we don’t include fashion advice or content in our emails;  our item pictures are good but definitely not the best.

And for many things that are critical to most shopping sites,  we are willing to lose completely:  we don’t play SEM arbitrage and our SEO is terrible.  Why?  None of these matter for a personalized product.  In fact, they hurt it.  Instead of optimizing for a transaction, we want to build a long-standing relationship with our users — and that requires a different type of interaction and focus.

In fact, I believe it is our unending focus on a personalized shopping experience that lets us succeed and thrive in a crowded marketplace.    While some companies have made personalization a feature (and are trying to shortcut it by guessing based on what you clicked or optionally asking you) — we have made it our core which means when it comes to building a product “just for you”, we can beat them every time.

So my question for you product managers out there:  What do you want to be awesome at?

How we celebrate the little things

Running a startup is definitely an emotional roller-coaster ride.  You are going to have really good days (like when you are featured on The Today Show) and a bunch of down days as well.

Your product development will always be much slower than you want;  you’ll put your heart into product changes you think are great but the customer balks at (or even worse, doesn’t notice).   You’ll put in an experiment “destined to win” until it meets the real world where it promptly loses by a large margin.  And as you go through the meandering customer development process of  learning what exactly the customer wants, it will feel like your  company is going nowhere.   Add that all up and if you are only waiting for the end goal it will feel  like it will never come.

So how do you stay optimistic and keep moving forward?

At Shop It To Me, instead of only celebrating the final goal, we make an effort to celebrate the little things.   We release new functionality weekly, and with every weekly release comes a mini-celebration (“Beer-Thirty”) — reveling in what was accomplished that week, the hard work that was put in, and the fact the product is (almost always) better than the week before.  We celebrate that we put the experiments in and found out the results even if they weren’t the results we actually wanted.

And we’ve been experimenting with another way of celebrating too — the “mini-milestone”.   Each product team comes up with a set of small milestones that are achievable in about a month’s time.  The milestones are not guaranteed to happen, but likely if everyone works hard (   examples include a set of features or experiments included or a metric goal that shows we are making some progress.) Each time we achieve a milestone. the team is given a small allotment ($250 or $500) to spend on the company and celebrate that milestone — they get to pick how.    The celebrations are usually not that big —  examples include a fancy brunch for the company or a Nespresso machine  — but so far the result has been super positive.  The team gets recognized for the work they have done, the entire company sees that progress is being made towards reaching our bigger goals, and after each celebration the teams are more motivated than ever to be hosting the next one.

How To Find Early Adopters For Your Internet Startup

I recently  came across a Brookings institute article on global happiness level.  The premise is simple (and well-documented from other books on the subject) — the human psyche towards happiness is incredibly adaptable.  People even in the poorest, most war-ravaged parts of the world have happiness levels as in the US because they have adapted to their environment.

The same is true with users of any software.   People have a fantastic coping mechanism to be “complacent”.  People “like” their existing email provider even though it might put 30-50 spam emails in their inbox each day because they have grown used to it.  They can’t imagine anything different.

But every once in awhile you’ll find someone pissed off with the status-quo.  They’ll either be doing something on their own to make it better, or just vocally complaining about it.  THESE are the people who are your early adopters — the unhappy people.    When you first put a new product, it’s not going to be perfect.  There are going to be major parts you’ll need to either add or change .  Don’t test it against the mainstream user as they don’t know there is a problem.  Ask your friends and check discussion boards and Twitter for the people who are not happy with the status quo and test your product with them first.  You’ll learn a lot more about the unserved problem and ways to fix it.

Then once you have nailed the solution, go after the mainstream “complacent” user and show them just how much  they are missing.

7 Email Marketing Mistakes Not To Make

In case you have not seen it yet, my article on the 7 Mistakes Not To Make In Email Marketing is now online at Inc.com!

 

I’m Back, Baby!

I’m Back, Baby!

Hi again!

As you probably can infer from the title, I am going to start blogging regularly again, my wife and I now are proud parents of a cute baby girl, and I am a fan of double entendres/puns.

The last year has been crazy, becoming a first-time parent and setting up a whole bunch of new initiatives at Shop It To Me,  some of which are now in our system, some we hope to launch soon, and some which will never see the light of day.   It has been a crazy-fun ride  and I hope to relay as many insights as I can in a nifty once-a-week format.

I’ll be writing about these experiences — starting and running Shop It To Me, a successful eCommerce company in the Internet-hot SOMA region of San Francisco, so expect posts on commerce, startups, product management, user-psychology, and being a dad.

Stay tuned!

Customize Your E-Mails and You’ll Avoid Getting the Spam Treatment

I just had an article about why and how retailers should be personalizing emails posted on Ad Age.

Comments are appreciated!