Spy on your customers (they want you to)
Paul Briggs doesn't have a lot of time to score points with Travelocity.com customers. Using specialised software, the No. 1 travel Web site--which is barely ahead of Expedia.com in traffic, according to Nielsen//Net Ratings--tracks the lowest airfares for more than 290,000 routes worldwide, looking for evidence of a fare war. The minute Travelocity's software senses a US$25 drop in ticket price--and a similar response by the airline's competitors--the clock starts ticking.
Knowing that half of all online travel shoppers turn to Travelocity for rock-bottom fares, Briggs wants the online travel site to be the first to inform its customers of a pending fare war; but only as long as it has permission to do so. Briggs, who oversees customer relationship management (CRM), has a powerful weapon at his disposal: When his staff gets wind of a fare war, they immediately query Travelocity's system to identify customers interested in those destinations. And thanks to Teradata, software developed by NCR, Briggs relies on more than geographical data and purchasing habits: He can also look at flights people considered taking, but failed to book, on past visits to the site.
Within about a day Travelocity sends thousands of email messages alerting customers to the new low fares, including a direct link to book the tickets. Teradata, which costs US$1 million plus around US$150,000 in annual maintenance fees, delivers impressive results: Travelocity converts those targeted email recipients to shoppers at a rate twice as high as its nontargeted mass email offers. The software also speeds things up. Where it used to take almost 24 hours to upload and sift through customer information, the same process is dispatched in less than three hours.
This kind of Internet surveillance--with customers' permission and the goal of extending timely offers at the exact moment consumers are ready to buy--isn't new. But companies are getting smarter about how they use it. "It might not be putting a man on the moon, but it's very complex, very relevant, and we get a very high response rate," Briggs says. "As far as privacy goes, we increasingly hear consumers saying, 'Why not send airfares that are relevant to me?' That's what we're trying to do."
Despite the success that Travelocity and other companies have had with customer tracking technology, it seems that many e-commerce outfits could sooner put a man on the moon than create a personalised shopping experience. Most e-commerce companies still lack any real insight about their customers, mainly because the CRM software they use can't analyse the data it collects from the Web.
In a recent Jupiter Media Metrix survey, 43 percent of Web site executives said they couldn't integrate tracking data with specific customer profiles. Meanwhile, 23 percent said they don't conduct any behavioural analysis. Only 20 percent know if their customers abandon the shopping process at critical points for reasons that could be easily fixed. Furthermore, 10 percent said they simply collect too much data to analyze it all. According to David Daniels, an analyst with Jupiter, sites like Travelocity are an exception to the rule. "Certainly the Internet allows merchants to collect vast amounts of data (and they do) but very few sites use that data," he says. "Those that are (acting on the collected information) are really improving results and lowering costs."
Customer tracking and Web personalisation technology isn't perfect. Nor is it cheap. But it can go a long way toward helping you understand information you collect about buyers' habits and preferences--and take it one step further. And in an emerging industry where business smarts are earned on the fly, such investments can mean the difference between surviving and thriving.
Travelocity accomplishes its targeted marketing with help from Teradata, software that combines click-stream analysis and data warehousing. Click-stream analysis lets you pinpoint which parts of your site customers spend the most time in, and the paths they take while visiting. Data warehousing software lets you store all of that unsorted information, which you can slice and dice later, depending on what you want to know.Solutions such as Personify CI and Keylime LimeLight refine the analysis by tagging specific pages on your Web site. Then every time a customer visits a tagged page, that fact is added to the customer's profile in your database. "It's more efficient than picking through the haystack and then matching a bit of data to a customer profile," says Jupiter's Daniels. Personify CI costs on average $500,000 plus an annual upgrade fee of US$100,000, while LimeLight starts at about US$5,000 per month.
Other technology companies, such as Participate.com and Quiq, collect information on your customers as they engage in chat or discussion groups on your site, or when they email you feedback. Participate's Community Knowledge Technology Platform costs from US$30,000 to US$300,000 a month, depending on how many users it tracks. Quiq Connect costs between $30,000 and $50,000 a month.
Compaq Computer uses Quiq Connect to host its online support forum. The chat room lets customers post questions and answers about Compaq products and services. "It's a forum for people to get together to solve problems," says Steve Young, vice president of worldwide customer care.
Compaq has built a sizeable database with the information exchanged in the forum. Using this information, Quiq Connect's technology helps Compaq run highly targeted product analysis. "We look for trends among our less knowledgeable users and see how we can make things more easy to use," Young says. "We also check with our experienced customers and look for trends and extract that information to our engineers."
Compaq also uses the information to improve its service. For example, when customers complained about having to answer the same questions whenever they logged onto the site or phoned the call centre, Compaq quickly fixed the problem. Now when a customer contacts Compaq, the representative assigned to him already knows his profile.
Another series of complaints logged on the forum pushed Compaq to label the inside of its hard drives. Because of poorly identified parts, Young says, some customers found it difficult to make simple repairs or upgrades.
If Compaq's improvements seem insignificant, don't be fooled, Young says. The technology it used to support its community site before couldn't deliver the same results. "It wasn't easy to mine," he says. "It was harder to spot the real trends."
Tracking your customers need not be limited to the Net. A software solution like AbiliTec from Acxiom tracks customer purchases and preferences from brick-and-mortar stores, catalogs, and the Web, and pulls it into one centralised database. This database lets you see what customers purchased both online and offline, and whether they returned anything. Designed to work with existing CRM systems, AbiliTec also reduces duplicate customer profiles by matching key identifiers. So even if your customer's online address differs from his catalog mailing address, the technology recognises that person as one and the same. AbiliTec starts at about US$50,000 but can cost up to $2 million or more, depending on the number of customer profiles in your database.
Travelocity accomplishes its targeted marketing with help from Teradata, software that combines click-stream analysis and data warehousing. Click-stream analysis lets you pinpoint which parts of your site customers spend the most time in, and the paths they take while visiting. Data warehousing software lets you store all of that unsorted information, which you can slice and dice later, depending on what you want to know.Solutions such as Personify CI and Keylime LimeLight refine the analysis by tagging specific pages on your Web site. Then every time a customer visits a tagged page, that fact is added to the customer's profile in your database. "It's more efficient than picking through the haystack and then matching a bit of data to a customer profile," says Jupiter's Daniels. Personify CI costs on average US$500,000 plus an annual upgrade fee of US$100,000, while LimeLight starts at about US$5,000 per month.
Other technology companies, such as Participate.com and Quiq, collect information on your customers as they engage in chat or discussion groups on your site, or when they email you feedback. Participate's Community Knowledge Technology Platform costs from US$30,000 to US$300,000 a month, depending on how many users it tracks. Quiq Connect costs between US$30,000 and US$50,000 a month.
Compaq Computer uses Quiq Connect to host its online support forum. The chat room lets customers post questions and answers about Compaq products and services. "It's a forum for people to get together to solve problems," says Steve Young, vice president of worldwide customer care.
Houston-based Compaq has built a sizeable database with the information exchanged in the forum. Using this information, Quiq Connect's technology helps Compaq run highly targeted product analysis. "We look for trends among our less knowledgeable users and see how we can make things more easy to use," Young says. "We also check with our experienced customers and look for trends and extract that information to our engineers."
Compaq also uses the information to improve its service. For example, when customers complained about having to answer the same questions whenever they logged onto the site or phoned the call center, Compaq quickly fixed the problem. Now when a customer contacts Compaq, the representative assigned to him already knows his profile.
Another series of complaints logged on the forum pushed Compaq to label the inside of its hard drives. Because of poorly identified parts, Young says, some customers found it difficult to make simple repairs or upgrades.
If Compaq's improvements seem insignificant, don't be fooled, Young says. The technology it used to support its community site before couldn't deliver the same results. "It wasn't easy to mine," he says. "It was harder to spot the real trends."
Tracking your customers need not be limited to the Net. A software solution like AbiliTec from Acxiom tracks customer purchases and preferences from brick-and-mortar stores, catalogs, and the Web, and pulls it into one centralised database. This database lets you see what customers purchased both online and offline, and whether they returned anything. Designed to work with existing CRM systems, AbiliTec also reduces duplicate customer profiles by matching key identifiers. So even if your customer's online address differs from his catalog mailing address, the technology recognises that person as one and the same. AbiliTec starts at about $50,000 but can cost up to $2 million or more, depending on the number of customer profiles in your database.
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| Acxiom AbiliTec Compiles online and offline purchase information into one centralised database. KeyLime LimeLight NCR Teradata Participate Community Knowledge Technology Platform Personify CI Quiq Connect TeaLeaf TeaCommerce TIAN Relevancy Delivery Network |
Solutions such as Personify CI and Keylime LimeLight refine the analysis by tagging specific pages on your Web site. Then every time a customer visits a tagged page, that fact is added to the customer's profile in your database. "It's more efficient than picking through the haystack and then matching a bit of data to a customer profile," says Jupiter's Daniels. Personify CI costs on average US$500,000 plus an annual upgrade fee of $100,000, while LimeLight starts at about US$5,000 per month.
Other technology companies, such as Participate.com and Quiq, collect information on your customers as they engage in chat or discussion groups on your site, or when they email you feedback. Participate's Community Knowledge Technology Platform costs from US$30,000 to US$300,000 a month, depending on how many users it tracks. Quiq Connect costs between US$30,000 and US$50,000 a month.
Compaq Computer uses Quiq Connect to host its online support forum. The chat room lets customers post questions and answers about Compaq products and services. "It's a forum for people to get together to solve problems," says Steve Young, vice president of worldwide customer care.
Compaq has built a sizeable database with the information exchanged in the forum. Using this information, Quiq Connect's technology helps Compaq run highly targeted product analysis. "We look for trends among our less knowledgeable users and see how we can make things more easy to use," Young says. "We also check with our experienced customers and look for trends and extract that information to our engineers."
Compaq also uses the information to improve its service. For example, when customers complained about having to answer the same questions whenever they logged onto the site or phoned the call centre, Compaq quickly fixed the problem. Now when a customer contacts Compaq, the representative assigned to him already knows his profile.
Another series of complaints logged on the forum pushed Compaq to label the inside of its hard drives. Because of poorly identified parts, Young says, some customers found it difficult to make simple repairs or upgrades.
If Compaq's improvements seem insignificant, don't be fooled, Young says. The technology it used to support its community site before couldn't deliver the same results. "It wasn't easy to mine," he says. "It was harder to spot the real trends."
Tracking your customers need not be limited to the Net. A software solution like AbiliTec from Acxiom tracks customer purchases and preferences from brick-and-mortar stores, catalogs, and the Web, and pulls it into one centralised database. This database lets you see what customers purchased both online and offline, and whether they returned anything. Designed to work with existing CRM systems, AbiliTec also reduces duplicate customer profiles by matching key identifiers. So even if your customer's online address differs from his catalog mailing address, the technology recognises that person as one and the same. AbiliTec starts at about US$50,000 but can cost up to US$2 million or more, depending on the number of customer profiles in your database.
Amazon's conversion rate for turning visitors into buyers is almost three times the industry average.The one e-tailer most associated with following customer behavior to improve an individual's shopping experience, Amazon.com, developed its tracking system in-house--and it's extremely tight-lipped about what technology provider it partners with, how much it spends, and what it's working on for the future.
As anyone who's ever bought a book, CD, or rubber mallet on Amazon knows, the site automatically serves up recommendations for additional products buyers might be interested in based on who else bought those items in the past. For registered users, the system goes one step further, accounting for their past purchases as well as how they've rated products. "We're not trying to do anything particularly tricky with the customer's information," says Josh Petersen, Amazon's director of personalisation. "It's not 'customers who bought this book, and who live in your ZIP code, and have the same number of children, and scored this on the SAT also bought these books.' "
Amazon may not need to go that far, but it does know what its customers want.
Nielsen//NetRatings estimates that the company's conversion rate (the ability
to turn visitors into buyers) is almost three times the industry average.