Personalised websites are driving customers away

Companies trying to get personal with their website visitors in hopes of increasing sales are wasting more money than they're earning, warns an upcoming report.

The Jupiter Research report, Beyond the Personalisation Myth assails as expensive and unproductive the practice of website personalisation, which tailors pages according to information gathered about particular visitors.

Instead of implementing personaliaation strategies, the report suggests, companies should concentrate on the basics, such as making their sites easy to search and navigate.

According to the report, which will be published Tuesday: "Given flexible, usable navigation and search, website visitors will be more satisfied with their experiences and will find fewer barriers to the profitable behaviour sought by site operators. In fact, good navigation can replace personalisation in most cases."

The report criticised personalisation as not only ineffective, but surprisingly costly.

Personalising a site was more than twice as likely to result in finding visitors who would never pay for anything, than to attract paying customers, Jupiter's study found.

Operating the personalised website cost more than four times what operating a "comparable dynamic site," Jupiter found. The report said costs came primarily from the human effort needed to measure results, manage rules and optimise the system, on top of the licensing costs for personalisation software from vendors such as Broadvision, E.piphany, Teradata, IBM and ATG.

Stymieing personalisation campaigns is consumers' deep-seated suspicion of websites that try to extract information from them, the report found.

More than 25 per cent of consumers surveyed by Jupiter said they avoided website customisation because of concerns that marketers would misuse the information. A similar proportion avoided registering with a website, for the same reasons.

The report is peppered with anecdotes of unnamed companies whose personalisation plans backfired.

"One healthcare site spent five months weaving scenario management through its entire site, only to realise too late that maintaining the staff required to manage campaigns, scenarios and rules was prohibitively expensive," the report said. "In another case, a travel provider spent upwards of one year rebuilding its site on a new, personalisation-driven architecture, only to quickly - and painfully - conclude that matching profiles to content or offers had no impact on visitors who only want to check miles, compare flights and book passage."

Jupiter cited "several key" unnamed vendors of personalisation software that said they trained salespeople to focus on clients' desire to have personalised websites. That marketing push is paying off for the vendors, according to the report: Thirty-five per cent of surveyed companies plan personalisation initiatives, while 38 per cent already have them. Twenty-seven per cent have no personalisation plans.

Even as Jupiter warns companies against the personalisation pitch, corporate site builders continue to express support for the practice, offering some cautions of their own.

Richard Hughes, senior director of product strategy for Broadvision, said: "People need to rethink personalisation. The personalisation message has been simplified down to something very superficial, promising to increase sales by offering the right thing at the right time. That is a valid mechanism, but you have to be clear about objectives. A lot of people thought a lot of upsell offers would mean people would buy from them, without thinking about what people really wanted."

Hughes insisted his clients were seeing significant returns on their personalisation investments, and cited a 64 per cent jump in online sales by Rand McNally since they implemented a personalisation-driven site by Broadvision, among other examples.

As for the expense of personalization, Hughes shrugged off the report's dire outlook.

"Anything can be done badly and expensively," he said. "Just because there are some examples that people have invested time and money in the wrong area, that shouldn't discredit personalisation as a whole. People should do a sensible evaluation of what's going to work best for them and their customers."

Paul Festa writes for CNET News.com