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The SIM Framework

Mass Personalisation

Mass Personalisation is the third stage characterised by two-way dialogue where customers and insurers interchange ideas, needs, wants and aspirations. This is entering the field of 1-to-1 marketing, though it can, through automation, be pseudo 1-to-1 marketing, and thus retain the benefits of mass production. In this stage the customer typically selects a core product plus a number of options in order to personalise the offering. To do this the system needs to provide information relevant to the decision point.

In the past, these more complex offerings have been typically made to order and have required sales assistance at the point of sale. Now, using the Internet and other interactive mediums, customers can personalise their own products, avoid high sales costs, and have a reduced order processing / delivery cycle.

Personalisation can take an number of forms. One form is to personalise the core product. An example is where insurance quotes are based on the personal attributes of the policy holder. Allied Dunbar's Life insurance quotation is typical example.

A variation is to enhance the core product. Often the core product is well understood by the consumer but assistance is usually required in selecting various options. An insurance example is a customer selecting all-risks options on particular items, or paying an additional premium to protected their no-claim bonus.

In another form, customers are helped in their selection of products and options by giving examples of what other similar customers have ordered. Sometimes this is done by comparing personal profiles that customers have previously provided, or by comparing transaction types. For example, Amazon Books will notify you of new books that have been ordered by people who have also bought the books you have previously selected.

Yet another form is to personalise the need being met. Britannia Building Society personalises customer promotion letters based on the customer's disposition. The same technique will be used in the branches to handle customers in a more personalised way. Finally, Mass Personalisation is also used for services that require ongoing monitoring, as in order delivery and account maintenance. Typically, customers will access their individual orders or accounts to track progress and to see an up-to-date position. Parcel tracking by Federal Express and TSB Bank's on-line banking are typical examples. Reminder services, like Godiva Chocolates reminding one of forthcoming birthdays, would also fall into this category. All these forms of Mass Personalisation requires a dialogue with the consumer, often over a period of time.

Personalised Direct Mail   at   Britannia Building Society When Britannia's 1.9m customers registered for the loyalty bonus scheme they were asked to provide additional information, such as their tax band, occupation, financial relationships with other organisations. Six out of 10 did so. Using this information Britannia segmented its customers into 9 groups. It then sent letters to each customer suggesting they could switch to a Britannia mortgage and offering a cash sum. Each letter was personalised to make a different suggestion as to how the customer could spend the money, for example, a deposit on a new car, or a holiday abroad. The response was so good that Britannia increased its direct marketing spend from £1.5m in 1996 to £5m in 1997.

Definition: A two-way interchange (dialogue) for purchasing a more complex product or service or a basket of complementary goods whereby customers may tailor the core product itself or may select a core product and then a number of options (i.e. they personalise the offering). Mass Personalisation may also support the pre-sales and post sales processes

Business Value: This third stage provides real business opportunities to:

• Differentiate products, services, and service delivery
• Offer all these at a very competitive price with excellent service.
• Obtain vital information concerning unmet needs that feed directly into the new product development cycle.

Timescales: By its nature, this is a medium term investment.

Information examples are:

• List of suggested products / services based on personal profiles.
• List of products / services with full descriptions of permissible variations and options including cost.
• Information on personal orders or accounts.

Tools & Techniques could include:

• Personal Planning and Simulation software (e.g. pension planner).
• Personalised Product / Service suggestions.
• Quotation systems.
• Discussion group for consumers and customers to swap ideas.
• Order tracking and account maintenance.
• Diary / reminder facilities.

Technology: As per Mass Presentation plus:

• Java applets to process the requirement and/or selection.
• Distributed process with host system and databases.
• On-line Marketing and Sales Order software dynamically driven by customer profiles, interactions and S&M rules.
• Rule based system to ensure valid components.
• Chat software.

Example Sites:

• Royal Insurance Business Park (Personal briefcase of information to monitor)
• Britannia Building Society (Personalised letters based on customer disposition)
• American Express (UK) (Personalised offers based on purchase history and geo-demographic data).

Next is Mass Customisation

JS

External Resources
 

1. For more examples of companies undertaking Mass Personalisation see the Database of example companies.
2. See the full list of resources for this web site for other related resources.

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[Customer Relationship Cycle] [Mass Information] [Mass Presentation] [Mass Personalisation] [Mass Customisation] 
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