CUSTOMER PROFILING ON THE WEB

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CUSTOMER PROFILING ON THE WEB

• Laura Volk Group 2
• Yuka Wakayama MBUS 673
• John Dieckman Dr. Jason Chen
• Penjor Ngudup December 12th, 2002

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ONLINE PROFILING

• Customer profiling involves collecting data from
  a company's existing and potential customers for
  patterns that will allow that company to make
  predictions about consumer preferences.
• The profile thereby enables the company to target
  advertisements, personalize Web sites and match
  services to a specific customer's needs.

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PURPOSE

• Meet each customers personal needs.
• Retaining and increasing sales to current
  customers.
• Obtaining new customers.
• Decreasing marketing expenditures through more
  effective marketing.

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CUSTOMER PROFILING

• Collect Data

Organize Data
Analyze Data
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COLLECTING DATA

• Traditional Methods
• Direct Survey
• Credit Card Transactions
• Register Receipts

• Online Methods
• Cookies

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ORGANIZING DATA

• Involves organizing data into meaningful subsets
  of data to allow for optimal data analysis.

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ANALYZING DATA

• Profiling and segmenting act as analytical tools
  to help marketers to identify differences among
  customers.
• Profiling is the process of analyzing the
  demographics, life stage, purchase channel usage
  behavior, or any other criteria that a company
  deems useful to fully describe the
  characteristics of its customers
• Segmenting is the process of sub-grouping
  customers based on these identified differences.

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COOKIES

• Pieces of information generated by Web servers
  and stored on user computers.
• Typically embedded in the HTML code.
• Personal information is clandestinely stored.
• Information is automatically transmitted to a
  Web server the next time the user directs their
  browser to the Web page.

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HOW THEY WORK
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REGULATION

• Internet Privacy Act Senate Bill
• Opt-in / Opt-out
• FTC Regulation
• Civil Lawsuits (DoublClick Inc.)

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EXPLOITATION OF PRIVACY

• 92.8 of commercial Web sites collect personally
  identifiable information.
• 90.9 collect e-mail addresses.
• 81.25 collected names.
• 62.9 collected postal addresses.
• 52.4 collected phone numbers.
• Source Georgetown University Survey

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Whats wrong with Customer Profiling on the web??

• The potential threat to individual privacy makes
  end users wary of sharing any information.
• Gathering the information that makes this
  personalization possible is inefficient.

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OPS Open Profiling Standards

• OPS is a proposed standard for exchanging profile
  information between individuals and
  service-providing parties, with built-in
  safeguards for individual privacy.
• HOW WILL OPS WORK?
• Individuals will have a Personal Profile that
  contains their personal information. This profile
  will be stored on their personal computer (and
  can, at the user's option, be securely stored in
  a corporate-wide or global directory).

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• Proponents of OPS
• Developers Firefly, VeriSign, Netscape.
• Supported by more than 60 organizations such as
  American Exp., Hewlett Packard, IBM.
• As of November 1997, the World Wide Web
  Consortium (W3C) was positioning OPS as a part of
  its Privacy Preference Project (P3P).
• Competition of OPS
• Web Privacy Proposed by Microsoft and Citibank.

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TECHNOLOGY

• OPS is based on three current industry standard
  technologies.
• vCards
• Digital Certificates
• HTTP

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• WHY is OPS IMPORTANT?
• OPS helps to enhance the concept of ecommerce.
• Preserves personal privacy.
• Enhances convenience.
• Provides Personalized Services.
• Provides Accurate Customer Information.

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THE CORE CONCEPTS OF OPS

• Control by Source
• Access to information is controlled by its
  source.
• Informed Consent
• A party requesting an end users profile must
  receive the informed consent of the source(s)
  before collecting and using their information in
  any manner.
• Appropriate Value Exchange
• No party should collect information without
  offering the individual value in exchange.

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SECURITY

• OPS will use the most complex security tools
  available such as public key cryptography,
  digital certificates, and public certification
  services.
• Communication Encoding.
• Using a MIME container
• Identity Verification.
• OPS enables users to verify the identity of
  companies seeking personal profiles.

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SECURITY (contd.)

• Credentials
• Third party audits the policies described by the
  profile reader (companies).
• Credentials cannot be easily forged,
• Credentials can be revoked, and
• Credentials valid for one entity cannot be
  passed from one entity and usefully presented by
  another entity.

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CONCLUSION

• Online profiling is a sensitive issue, companies
  should treat customer information with extreme
  confidentiality.
• Companies should act effectively upon customer
  profiles and use it to benefit the customers.
• Customer profiling is critical for the
  enhancement of eCommerce.

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QUESTIONS ???