Pure Genius - Customer Intelligence in Action

Have you been to iTunes lately? I went online to upload some music and saw that iTunes is now offering a service called "Genius" to its customers. Genius creates customized playlists for you, based on the types of music that you like and - get this - recommends other songs or albums that would round out your music library.

Talk about smart! iTunes is using customer intelligence to sell more song downloads to its customers. And, they're getting customer permission to do it. When you sign up for the Genius service, they clearly state that they are going to look at your music selections and then aggregate them (anonymously) with the rest of their customers' music selections.

While I'm not privy to the details behind the scenes, I imagine it works this way:

1. I select a favorite song that I would like to be the basis for a playlist.
   
2. Genius uses the song tagging information (genre, artist, frequency of plays, etc.) to cull through my current play list to find similar songs and create a recommended playlist.
   
3. At the same time, Genius is using predictive modeling to compare my music preferences with its massive database of customers' preferences.
   
4. Once Genius has identified "look-a-like" customers, it compares my music selections with those of the "look-a-like" customers, and makes recommendations for me (similar to the Amazon.com model)
   

This is all done in real-time. Of course, the proof is in the action. I clicked on a favorite song and had Genius create a playlist for me. I liked the way that it grouped together songs and gave me options on the number of songs I could include in the playlist. And the recommended songs and albums? Well, there were a couple albums and songs on the list that I had at home that I hadn't uploaded to iTunes yet, and the bulk of the remaining songs were ones that I genuinely enjoyed and would like to have on my iPod.

iTunes notes that they are in the process of refining this capability and expects that, over time, the Genius tool will become even more focused and relevant in its creation of playlists and recommended songs to download. As customers opt-in to this functionality, their database and customer modeling will only become more accurate in its output.

The idea of customer intelligence has been around for a while - using customer insight and data to drive marketing, sales and service interactions to increase customer profitability - but the technology to make this happen just started catching up in the past few years. Customer intelligence is the basis of relationship marketing. iTunes has recognized a clear need in its customer base - creating playlists that capture a mood or music type - and is using that to increase the purchase activity of its customers.

That's what I call pure Genius!