Customer profiling in e-commerce: Methodological aspects and challenges
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Klaus-Peter Wiedmann Professor Dr Wiedmann holds the Chair of General Management and Marketing II at the University of Hannover, Germany.
Holger Buxel was a research associate for the Department of Marketing II at the University of Hannover, Germany from 1999 to 2001. In 2001, he became a consultant for Droege & Comp. AG, Dusseldorf, Germany.
Gianfranco Walsh* is Senior Lecturer at the University of Hannover’s Department of Marketing II, Germany. He also consults on a variety of marketing challenges, especially relating to empirical marketing research and cross-cultural consumer behaviour.
Abstract Online profiling is the collection of information about Internet surfing behaviour across many different websites for the purpose of formulating a profile of users’ habits and interests. While marketers have long profiled large consumer groups on the basis of demographics, online profiling allows companies to collect information from individuals across a wide range of traits. A company’s ability to build and strengthen long-term customer relationships via individualised e-commerce offers will depend on its ability to use customer data to plan, develop and control interactions with its customers. Despite the importance of customer profiles in e-commerce, the methods for producing them have rarely been investigated in marketing research. This paper aims to close this gap by providing an overview of key areas and issues of customer profiling in e-commerce. More recently, this controversial practice has seized the public’s attention because ethics and privacy are concerned.
Dr Gianfranco Walsh* Department of Marketing II, University of Hanover, Koenigsworther Platz 1, 30167 Hannover, Germany. Tel: ⫹49 511 762 4540 Fax: ⫹49 511 762 3142 e-mail: [email protected]
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INTRODUCTION Since the early 1990s, and especially in connection with the one-to-onemarketing concept, discussion has been increasing on how to manage relationships between companies and individual customers. Long-term, revenue-maximising relationships with attractive customers are especially relevant as the focus of marketing interest shifts from companies’ share of market to their share of customer. So called ‘one-to-one’ concepts focus on
Journal of Database Marketing
Vol. 9, 2, 170–184
learning from relationships with customers. Over time, companies can obtain comprehensive pictures of customers that can be used to cater better for customer needs. As companies are eager to increase the duration of a customer relationship, actions to increase the completeness and sharpness of such pictures, and to apply such pictures to individualised transactions, automatically lead to development of customised offers that have a positive effect on customer loyalty.
䉷 Henry Stewart Publications 1350-2328 (2002)
Customer profiling in e-commerce: Methodological aspects and challenges
In e-commerce, the quality of one-to-one marketing grows with further developments in information technology, which help to improve quality of customer data and to build lasting
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