October 1st, 2007

Jeff Bezos on Amazon’s Personalization Strategy

by Joshua Porter  |   7 Comments  |  shortlink: http://bokardo.com/p/688

An oldie but goodie (from a 1998 interview)

“In the online world, businesses have the opportunity to develop very deep relationships with customers, both through accepting preferences of customers and then observing their purchase behavior over time, so that you can get that individualized knowledge of the customer and use that individualized knowledge of the customer to accelerate their discovery process.

If we can do that, then the customers are going to feel a deep loyalty to us, because we know them so well. And if they switch to a competitive website – as long as we never give them a reason to switch, as long as we’re not trying to charge higher prices or providing lousy service, or don’t have the selection that they require; as long as none of those things happen – they’re going to stick with us because they are going to be able to get a personalized service, a customized website that takes into account the years of relationship we’ve built with them.”

It is easy to see how Amazon’s business strategy is manifested in their design decisions. They build tools that accept and observe preferences (browsing behavior, search queries, wish lists, purchasing history, etc) and design features to take advantage of that knowledge by finding related and closely relevant products.

The design of the entire Amazon web site is explained in these two paragraphs. It is the best example I can find of how strategy affects design.

But, to be fair, not everyone thinks that personalization is good. Many people view it as an invasion of privacy or a distraction. I personally view it as a good thing, as long as my information is safe and Amazon (or whomever I’m dealing with) is not selling it to 3rd parties.

Check out my latest project: Make them Care!, a book on designing great sign-up experiences. Get reminded when it's published.

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Comments

1.  heri 11:01am, Mon 1st, 2007

i really like amazon, ordering books from them every month or so. they are not trying to build short-term and fancy stuff (like using pastel colors and all) but had UI choices that made sense in the long-term instead.

but just one thing: during the last month, i’ve received every 2 days an email from amazon about new books, discounts, new items that I “should be interested” in. and that’s cheap for me.

2.  Todd 4:04pm, Mon 1st, 2007

You hit on something in your last paragraph that’s key … trust. As long as Amazon does nothing invasive or upsetting with your information, you will slowly build trust and incrementally allow them access to more and more personal information (up to a certain point). As long as their services improve in quality as you increase the information you provide, your trust and satisfaction builds.

The double-edged sword in all of this is that with the growing trust comes some degree of forgiveness for small mistakes, but any large infraction, like a misuse of personal info, will break the trust and potentially end the “relationship” that’s been built.

The greater the trust, the more careful a company needs to be with a user’s information.

3.  FredTheSwiss 10:26pm, Mon 1st, 2007

With the decrease of processing costs personalization is no more reserved for luxury (5* hotels remembering your pillow tastes, requirements, majordomo remembering all you tastes, etc.)

But automation can only simplify the model of “personalization” which makes it… wrong.

But I believe that (auto)personalization is always accepted if:
- it does not exhibite your “secrets”. (Imagine your wife’s face seeing amazon.com homepage if you were browsing the website for the best book about divorce.) => So maybe a “close your eyes and do not record what I am doing the next session” would be great!
- it understands you can change: I love luxury food and fast food sometimes. So I want advertising about the best restaurants and sometimes about the new fast foods.
- it does not limit my view field: I am a man, so I do not want advertising about “menstruation solution”. Logic. But maybe I would be interested in that as my girlfriend has big issues with it. => I may be also interested by subjects that my social network like even if I never told you before.

4.  Adrian 12:09am, Wed 3rd, 2007

Gotta say i have used them for over a year now and their strategy works really well. I guess we can all take a lession from them.

Only problem i have with it is the fact it has become so hard to log out that it causes a security risk

5.  Chas 5:24pm, Sun 13th, 2008

As a fairly frequent customer of Amazon, I find their automatic attempts at personalization amusing. I only use Amazon for limited kinds of information. As a result their so called personalization reflects the narrow window in which I deal with them. Like every other retailer – seller online, I only give them certain information knowing they will send tons and tons of junk I don’t even want to know about. So, I use email addresses that exist for the purposes of receiving retailer trash. I talk to Amazon when I want to talk with them, not vice versa.