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What does “personalization” really mean? You’ll be forgiven if you have absolutely no idea. As trendy catchwords go, “personalization” has become a go-to term for websites and online marketers, laden with all the possibilities of connecting with individual consumers and a departure from the limitations of one-size-fits-all.

Nearly every online marketing vendor touts some form of personalization as their secret sauce for helping you target customers.

It makes sense. The potential of personalized online marketing, when done well, is enormous – and for that reason, it’s a compelling sell. The problem is … it hasn’t been done very well thus far. And, thanks to vendor hype and over-promise, just mention the word “personalization”, and most have learned to greet it with a healthy dose of skepticism.

But personalization isn’t just marketing hype. It’s a complex concept that really can live up to its billing. But first, retailers, in tandem with their marketing vendors, must identify what personalization really means – and what it means to their business and target customers.

Furthermore, when it comes to their websites, mobile sites, apps and CRM platforms, major ecommerce players need to realize that only through a customized combination of multivariate testing, optimization and personalization best practices, can they truly begin to reach consumers with personalization that is effective and impactful. There are no easy answers or instant solutions for creating personalization that works – it’s about evolution rather than revolution.

Defining Personalization
A truly personalized customer experience – what amounts to a custom website for every consumer – has been the Holy Grail of marketing for over a decade. Yet the very concept is conflicted, fragmented and confusing. Ask 10 marketers to define personalization and you’ll get 10 answers. You’ll also find that despite all the hype, the bar has been set low; most of these same marketers are hoping for nothing more than a few product recommendations or more effective targeting.

Even the experts don’t give us a whole lot of direction on personalization. According to Forrester, Web personalization is “creating experiences on websites or through interactive media that are unique to individuals or segments of consumers.” Just about as vague as every other definition.

In reality, every specific piece of information you can gain about your customer – from search information to online behavior and purchases – can be used to create a personalized experience. Which means that your approach to personalization can be as simple (using one or two collected insights) or complex (a detailed formula based on multiple insights) as you want it to be.

With the right combination of technology, research and testing, ecommerce businesses can now deliver a personalized online experience that far exceeds anything that can be delivered in store – short of hiring a dedicated personal shopper. With the right personalization strategy and tools, companies can create an online equivalent of a brick-and-mortar store where anything a consumer might want is located in a single aisle.

Technology is So Personal
It goes without saying that your marketing team is comprised of geniuses, but a lack of imagination – and technology – may be limiting their vision when it comes to personalization.

Yes, they’ve thought about segmentation, recommendations and retargeting, but these techniques are only a fraction of what technology now allows. New sophisticated real-time automated SaaS solutions empower marketers to create personalized experiences that far exceed what was previously possible. With SaaS solutions working in tandem with strategy and implementation, companies can begin to move towards complex forms of personalization – and achieve online what is already being done offline with propensity modeling and other business analytics.

Really, knowing about low-cost SaaS solutions – and how to use them to take advantage of opportunity – might just be the most significant indicator of marketing genius.

Getting Started with Personalization
Once the right technology is in place, one of the best ways to get started with personalization is with a set of “rules” that define parameters. These rules establish conditions for a specific visitor experience; for every insight gleaned, you create a more and more personalized experience.

Of course, rules don’t exist in a vacuum. When defining them, you must take into account known consumer behaviors, including the various stages that shoppers go through when making any kind of purchase and the fact that they may visit your site several times before actually pulling the “buy now” trigger. While this knowledge might seem to complicate your rules in the immediate, it can be used to your advantage.

Sure, go ahead and create rules for first-time visitors, but you can and should also create more complicated formulas that incorporate insights and data from previous visits and apply them to future visits. So, for example, retarget a repeat visitor based on the last product they searched for during their last visit. This rule path can then be enhanced with complementary content or offerings, whether for discount on the searched product or an up-sell on similar items. It’s personalization that gives customers what they want and shows them that you value them – a must for creating relationships and loyalty online.

Keep in mind, however, that while targeting with rules is effective and often a great place to start, it does have its limitations.

Marketers will find it nearly impossible to manually define rules for expansive websites that have vast and diverse daily traffic. In this case, technology needs to be partnered with sophisticated behavioral targeting through mathematical models that allow you to predict the most compelling content and offers based on known insights and data points about each visitor. This type of model learns and adjusts dynamically over time to optimize visitor experiences with content that yields the highest conversion rate. This approach is also better for the broader range of content (product types, specific brands or destinations) that each individual can get based on unique predictive attributes.

Using Product Recommendations the Right Way
Want to see great personalization in action?  Amazon continues to set the gold standard for best practices in personalization. The site has an unparalleled ability to recognize and deftly exploit consumers’ online browsing and buying habits. (Of course, it also has the advantage of customer interactions living entirely online, while most retailers have offline presences that dilute their ability to gather insights.)

Because of Amazon’s clear success, almost every major ecommerce site has taken steps to mimic Amazon’s highly successful interactions with returning customers. (“You were interested in XYZ, so you may enjoy ABC,” etc.)

But that doesn’t mean they’re getting it right.  Everything from competing recommendations (you want shoppers to buy more, not different) or recommendations for products that are out of stock to a lack of testing and product reviews mean that many recommendation programs are falling flat or, even worse, counterproductive.

To offer successful personalization through recommendation, focus on the essential elements.  Product recommendations should be placed on category pages, product pages and the shopping cart or basket page, with each page type getting its own recommendation formula and approach. This allows for more targeted recommendations and for segmented testing and optimization of recommendations. Recommendation content, placement on the page and the design of a promotion all play a role in the success of recommendations. Segmenting and measuring the conversion impact of every detail (e.g., images, fonts, colors, the number of recommended products, the placement on pages, and the recommendation model used) will help you identify the approach that yields the highest conversion rates for your visitors.

With a program for monitoring and improving recommendations, you improve the shopping experience for each customer – and increase revenue and cart sizes.

Maximizing Opportunity 
Companies that have already successfully leveraged new SaaS solutions along with optimization and personalization strategies have achieved, on average, a double-digit increase in conversions. And with these programs becoming more common, consumers are coming to expect a sophisticated level of personalization.

The good news is that with the SaaS-based model, companies can have personalization programs up and running immediately. Add in multi-channel data from call centers and stores or branches, and they can create an organization-wide, cross-channel approach to personalization within a quarter.

There is no doubt that, after years of hype and hyperbole, we’ve finally found the holy grail of online marketing: Personalization

Well, it’s arrived: the holiday shopping season. Black Friday, Cyber Monday, December sales, January promotions…you get it. This year, the Associated Press says, retailers are focused on price in hopes to counter the (still) worn down economy, while the National Retail Federation claims that shopper’s shouldn’t expect lower prices than any other year, but rather free shipping, deals and giveaways.

Any way you look at, the competition, both online and offline, will likely be cut-throat, yet again. As consumers becoming more shopping savvy and consult your website for their gift-buying tasks, it’s important you make sure you’re ready to serve them the best performing content, offers and online experience that turns them from browsers and bargain-hunters into paying customers.

Hopefully you’re already on this one, but customizing your website with a festive look and feel lets people know your holiday sales have started. Clearly display the items most likely to sell during the holiday season on the most popular pages.

Resist the urge to have snow falling, lights flashing and stars sparkling all over home page. Video, banner ads and flash can be great elements to enhance the online customer experience, but only in small doses. Numerous tests with our clients have shown that visitors need at least 1-2 static page elements in order to maintain their focus, and thus their ability to convert into a paying customer.

Yes, retail sites undoubtedly stay busy year-round, with peak selling times during the obvious seasons. But if you’ve waited to test and optimize your promotions or discount offers on the day before Christmas, you’re too late.

Holiday shopping is going to bring you wealth of new and returning visitors. It’s a great time to (well any time is) to enlist the help of live multivariate testing and iterative tweaking to drive higher conversion rates. Even subtle changes such as font size, color and language can have a huge impact on revenues. Continually test different variations to see what yields the best results, and monitor results for both in-season and off-season traffic.

As I said, you know you’ll have an influx in traffic and purchases, and you’ve put in a lot of work into your sales, promotions and branding. Personalization and targeting are excellent for increasing conversion, but remember, people are buying gifts, not shopping for themselves. So don’t spend too much time targeting based on their past purchases in the off-season—it may not have much of an impact since they are shopping for a loved one, friend, co-worker, etc.

For the inner-procrastinator in all of us! Those visitors who fall into mad-dash-last-minute shopping segment are need to focus on two important elements: shipping dates and stock status. The comfort this consumer receives in knowing that you have it in stock and they’ll receive it on time, no matter if there is a slight price difference, can help to ensure you win the business instantly. This is a huge factor in behavioral targeting and personalization, since consumer mindset inevitably changes, and purchase behavior, as well as browsing activity, will be impacted.

Speaking of customer behavior, there is no better place to plan for and understand your actual consumers than at the check-out process. Analyzing buyer behavior from all your channels (not just the website!) is the most indicative and predictive data set for setting up successful segmentation and recommendations: discover what people actually buy, uncover buying patterns and help influence inventory decisions.

Marrying offline and online data from CRM, web analytics, POS output, call centers and mobile commerce will ensure you have a 360-degree buyer view to begin targeting and tailoring for your consumers. After the all the data nuptials are complete, analyzing behaviors such as “Bought this, Bought That” and “Best Sellers” will have you homing in on the best cross-sell and up-sell opportunities, for all your point-of-sale outlets.

You’ve probably got a few sales, discounts and promotions planned this season, but have you thought about how they actually look, rather than what they say? Time and time again, marketers are surprised at the impact that font, location, showing/not showing, and color of product pricing has on website conversion rates, While no single pricing strategy is correct for all brands, don’t be afraid to test it. We have found that some sites perform better without revealing the price before the product gets to the cart, while others convert visitors better by being up front about it. See what your visitors think—the results may surprise you.

It’s not likely that your brand guidelines always fit directly with the website elements—especially during the holiday season—that are the best converting content. That’s why multivariate testing and A/B testing is an investigation not only into your website elements, but also your brand. If your consumers perceive you differently than you believe them to, your website approach could be hurting conversions. Sticking strictly to the brand guidelines—whether in what you choose to test or change—might never lead you to discover that some brand-approved copy, tone, colors, page template, or call-to-actions, are holding you back from higher conversion rates.

It’s no secret that it takes many forms (and people) of marketing in order to meet your brands revenue goals. And today’s internet-savvy consumer population is sure to land on your website at some point, so it’s best keep the lines of optimization communication open. Ensure all marketing departments and relevant employees are in the loop about your goals, website changes and promotions for this holiday season —so that SEO, direct mail, email, PPC, call centers, etc. are primed to collect and use the right optimization data when you’re ready to move to a true multi-channel marketing approach.

Many consumers are now spending just as much money in the New Year as they are in true holiday buying season. Make sure you are able to hit the ground running in January with fresh mobile content and product offers in order to stand out from the crowd. Remember to use live testing to help determine which offers have the most positive impact on your sales.

To learn more about conversion rate optimization in the online retail industry, check out the new retail white paper, "Capturing the Promiscuous Customer: How Online Retailers Can Use Testing & Targeting to Curb Disloyalty & Increase Conversion Rates" just released by Maxymiser—a company specializing in increasing the online revenue potential of online retailers. Find out more on to make your business faster, smarter and better with testing and optimization.