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By Gediminas Adomavicius, Alok Gupta

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In contrast to this, if offerings are actively tailored to individuals based on rich knowledge about their preferences and behavior, then this constitutes smart (or deep) personalization (Hagen, 1999). Continuing this categorization further, Paul Hagen classifies personalization applications into the following four categories, described with the 2 Â 2 matrix shown in Fig. 3 (Hagen, 1999). According to Fig. 3 and Hagen (1999), one classification dimension constitutes consumer profiles that are classified into rich vs.

They are not too high and not too low. According to Rangaswamy and Anchel (2003), examples of such products include clothes, certain food items, computers, watches, etc. ). 24 A. Tuzhilin In summary, when the benefits of personalization exceed its costs for both providers and consumers of personalized offerings, only then it makes business sense to personalize, which happens only for certain types of offerings and usually on a case-by-case basis. Moreover, it is difficult to measure the costs and benefits of personalization in many cases.

4 Smart vs. trivial personalization Some personalization systems provide only superficial solutions, including presenting trivial content for the consumers, such as greeting them by name or recommending a book similar to the one the person has bought recently. com) provides personalized engravings on various 18 A. Tuzhilin items ranging from children’s backpacks to personalized beer mugs. These examples constitute cases of trivial (Hagen, 1999) [shallow or cosmetic (Gilmore and Pine, 1997)] personalization.

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