EXECUTIVE TECHNOLOGY BRIEFING
August 2001

HOT NEWS IN THIS REPORT:

1. Are You Using the Data You're Collecting?
2. Strategy: Separate Web Design from Content
3. Web Design Tactics to Avoid
4. Cool Tool: As-U-Type

Executive Technology Briefing (ETB)
Editor/Publisher: Jordan Ayan
Contributing Editor: Chuck Frey

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ARE YOU UTILIZING THE DATA YOU'RE COLLECTING?

Recent advances in database and traffic measurement tools make it possible to collect mountains of customer data from your Web site. But most organizations are finding themselves in a "data fog," unable to make sense of the growing mountain of customer information they're collecting.

As a result, these firms may be missing opportunities for one-to-one marketing -- where customer profile data is used to tailor promotional offers to targeted groups of customers and prospects.

One-to-one marketing is generally defined as the ability to personalize sales offers for each prospect, and where data can be leveraged to the point of a personalized appeal for each selling opportunity. For example, Hertz and Avis use customer profiling systems to track the rental car preferences and past rentals of their preferred customers, and use that data to have the right car with the right options waiting for these key customers in a covered parking area. Similarly, on the Web the classic example is Amazon.com (http://www.amazon.com), which has figured out intelligent, creative ways to utilize customer purchase data to predict other products customers might be interested in. Amazon's sophisticated 1-to-1 system allows the company to make targeted product recommendations that help to build ongoing customer relationships.

All three companies have one thing in common: They use customer data to surprise and delight their best customers. While they have invested millions of dollars in enterprise software to do one-to-one customer marketing, there are practical strategies that any company -- large or small -- can employ to achieve similar results.

Our goal in this issue of ETB is to take a closer look at how to leverage customer data to increase sales, improve customer loyalty and enhance the efficiency of your organization -- while avoiding several common pitfalls.

- HOW COMPANIES GET BURIED IN DATA -

Most organizations unwittingly bury themselves in a sea of customer data, and then are unable to interpret it in ways that add value to the customer relationship. This can happen when marketers fail to set specific objectives for gathering and analyzing customer information. Since they're not sure which customer characteristics have what impact on their purchasing habits, the temptation is to collect as much data as possible, just in case. Mountains of data can be generated from your company's Web site and other sources fairly easily, but manipulating and analyzing it requires planning, time and manpower.

Also, many companies have been so busy building Web sites during the last few years that they haven't always focused on how to use the data these sites generate. A good way to determine if you are collecting too much data on your Web site is to calculate a "usage index." This index is easy to calculate. First, determine the number of data elements that you are collecting that you actually use, then divide this number by the total number of elements that you are collecting. If the usage index is lower than .3, you are collecting too much information (and you may be losing some customers who don't want to divulge so much information to you).

Customer-centric companies tend to focus on turning customer information into tangible value. But most companies are actually product- or market-centric, and may not even be clear on which department within the organization is responsible for managing customer information. IT? Marketing? Customer support?

With growing concern about online privacy, many customers are less willing to share personal information about themselves with online marketers. At the very least, they expect value in exchange for providing data about themselves. Increasingly, customers will gravitate to Web sites that DO use their profile data intelligently.

- KEY STRATEGIES FOR 1-TO-1 WEB MARKETING -

Instead of trying to collect and analyze a mountain of data, start small and focused. Begin with an analysis of the data you now have. Consider what assumptions your organization uses to shape its marketing and sales strategies. Retain those data elements that make sense, and stop collecting the rest. Explore what information your sales team or distributors think would help them close more sales. Talk to your product development teams to find out what assumptions they're making about the target customers for the new products they're developing. Which of these assumptions require further testing and analysis and could benefit from the data you're collecting? Think about the ways you would like to segment customers and prospects by simple criteria, and personalize e-mail offerings in the future. For example, send an offer for your premium product to everyone in your database who purchased related products in the last three years and has a household income of $100,000 or more; and send information on a comparable mid-range product to anyone who meets the first set of criteria but has a household income of less than $100,000. Now you have an idea of what data elements you would like to use.

For best results, keep your early efforts simple, and measure the results of these early campaigns. Incorporate what you've learned (based on which offers customers responded to and the pages they viewed on your site) into your database. Ideally, one-to-one e-mail marketing becomes an ongoing form of market research.

Don't forget to deliver an exchange of value in your targeted marketing messages. This doesn't have to be a monetary offer. Often, free product usage or planning tips or other "free" information can be enough to drive visitors to respond to your offer.

Experiment with different approaches with small groups of prospects, to determine which offers create the highest response rate. Then expand your campaign around those offers and approaches that generate the best results.

Pay close attention to the relevance and frequency of your e-mail messages, because a growing number of customers already feel they receive too many e-mails. According to a recent study by IMT Strategies, lack of relevance is the number one reason customers opt out of an opt in e-mail relationship. You can expect that customers will continually raise the bar in terms of what they believe is relevant.

Getting into the heads of current customers and prospects should be a requirement for any data warehousing (storage of customer information in a centralized database) and analysis program. Many companies analyze site data with an eye toward improving new customer acquisition, but overlook keeping their current customers happy. Don't make this mistake. Remember, acquisition of new customers costs much more than retaining your best existing customers. Don't let these "cash cows" walk out the door by not using the information they provide you to service them better.

- WHAT SHOULD YOU MEASURE? -

Customer preferences and demographics: Many savvy marketers require customers to login to their Web sites to get access to expanded information and additional resources. This gives them access to detailed profile data about these users' current needs and interests. Also, when a user is logged in, you can track every page he or she views during a site visit. You can then analyze this data for further insights into their needs.

Past purchases: What have they purchased from your company in the last few years? Is there a discernible pattern?

Return rate: What percentage of site visitors have visited your company's Web site more than once?

Recency: The time between a customer's repeat visits to your site. You can use this as one measure of customer loyalty, as well as help you to determine how frequently you should update your Web site's content.

- CONCLUSION -

Even the best data warehousing and analysis tools are only as good as the marketer who uses them. Analysis of customer data requires difficult choices, judgment calls and tradeoffs about what information to collect and how to use it appropriately. If you do not have the skills in-house, consider hiring a market researcher who is skilled at data analysis to manage your data warehousing and analysis program. Just as you wouldn't trust a general practitioner to perform open-heart surgery, it may be risky to expect a marketing generalist with limited data analysis skills to manage such a data analysis initiative.

A well-focused customer data collection and analysis program can help your organization become a more customer centric-business. What makes interactive online marketing so exciting is the potential to track, measure and respond to customers' unspoken wishes. If you can succeed in converting customer data into usable insights, you will have a real opportunity to grow both customer loyalty and your competitive advantage in ways you never dreamed possible.

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Strategy: Separate Web site content from design

Redesigning a business Web site is a very labor-intensive process. Content must be copied from each page of the existing site to corresponding pages on the new site, and existing text must often be reformatted to fit the color scheme and text styles of the new site. As part of the planning process for a redesign, Webmasters need to consider how to make their site's content accessible to handheld computers and other wireless devices. While these may sound like daunting challenges, there is one Web development strategy that can meet both of these needs. The key is to separate your site's content from its design.

In most Web pages, the content is embedded within a series of HTML tags. In other words, their content is more or less "anchored" within that page. In contrast, several Web publishing technologies now make it possible to store page content (text and images) within a database - separate from the Web page. When a visitor's browser requests such a dynamic page, the Web server assembles the HTML page with the appropriate content from the database, and sends it to the visitor's browser. Database Web technologies such as Cold Fusion (http://www.macromedia.com/software/coldfusion/) and Active Server Pages make this possible. Similarly, a new dynamic content management tool from iUpload (http://www.iupload.com) allows Webmasters to insert content "containers" into existing Web pages, so that non-Web developers can contribute content to your site in a controlled manner, with flexible content management and workflow rules.

Separating content from the Web page within which it resides has several very compelling benefits:

• You can redesign your site without having to re-code content on hundreds of Web pages - a real time-saver.
• Having less HTML "hard-coded" into your web pages makes site maintenance much easier.
• You can easily provide visitors with simplified "printer-friendly" versions of your site's pages (popular on sites like ZDnet - http://www.zdnet.com).
• You can create special versions of your site's pages that can be viewed on wireless devices and handheld PCs.

Even if you don't need to redesign your site or accommodate wireless Internet users today, separating your Web site's content from its page presentation and layout makes good strategic sense; I recommend that you explore it today.

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AVOID THESE WEB SITE DESIGN TACTICS

Many Web sites are trying to control visitors' online behavior by using tactics like "mouse trapping" or pop-up windows to keep their visitors on their site longer, or to get a commercial message across. These tactics, which were once limited to the on-line red light districts, are becoming increasingly common on business sites. However, rather than keeping visitors on their sites, these unethical tactics tend to have the opposite effect: they infuriate visitors so much that they may never return. Check with your Web developers to make sure they're not utilizing any of the following techniques on your company's Web sites:

Mouse trapping: A small piece of programming inserted into a web page disables the browser's back button, preventing visitors from leaving the Web site. Because many people use the back button as a primary navigational tool to explore Web sites, "breaking" this functionality can easily confuse novice Web surfers.

Opening pop-up windows: Increasingly, major news, magazine and information portal sites open one or more pop-up windows when you visit their home pages, littering visitors' screens with unwanted visual clutter. In some cases, closing the pop-up windows only spawns more of them. To regain control of their browser, a growing number of Web users are downloading software applications like PopUpKiller (http://software.xfx.net/utilities/popupkiller/index.html), which identifies potential pop-up windows and prevents them from opening.

Page hijacking: In this scenario, scammers register misspelled versions of popular Web site names (such as http://wwwzdnet.com), or dupe search engines into registering counterfeit versions of popular sites. The intent is to trick people into visiting their site, not the one to which they intended to navigate. Once there, visitors may find the pop-up window and broken back button techniques used against them to keep them there.

Ambiguous site navigation: Sometimes visitors encounter Web sites that don't resort to questionable tactics, but are just poorly designed. For example, some site designers use Flash, JavaScript and other Web technologies to create dynamic site navigation buttons. However, there are several problems with this approach. If the buttons are Flash-enabled, visitors who don't have the proper plug-in needed to view them will never see the site's navigation bar, crippling their ability to move through the site. Another example is inconsistent navigation. Often times poorly designed sites have a tendency to move navigational elements to different locations on different pages. The terrible navigability that results from this practice is sure to lose site traffic.

Similarly, sites that rely on Java or JavaScript to create dynamic drop-down menus may work fine for the majority of visitors, but Web search engine "spiders" (automated software agents that scan Web sites and catalog their contents) can't follow these programmed buttons to index the site. If your company's Web site relies solely on dynamic drop-down menus created in one of these programming languages, chances are this is hurting your site's search engine positioning.

Finally, some sites are designed in such a way that you must pass the mouse pointer over a navigation button before you can see it's text label. Sites That Suck (http://www.websitesthatsuck.com) calls this "Mystery Meat Navigation." It's something like a children's matching game, where all the cards are turned upside down and you must turn them over two at a time to find the matching cards. Sites that rely on these forms of ambiguous site navigation are usually designed by overzealous artists attempting to create a cool and distinctive user interface. No matter how cool your design is, if visitors can't figure out your the navigation in less than 10 seconds, you're doing them a disservice and stand to lose them.

What's the lesson in these examples? Simply this: If you want to keep visitors on your Web site, the best way to do so is to provide them with compelling content and good, clean, easy-to-use site design, not bad design and questionable programming trickery.

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COOL TOOL: AS-U-TYPE
http://www.asutype.com

As-U-Type from Fanix Software works with Windows programs to increase your typing productivity and reduce typing errors. Working in the background, As-U-Type monitors your keystrokes, checks them and corrects common typographical mistakes such as misspelled words, accidental use of the caps lock key and more.

Many popular word processing programs provide similar text auto correction features, but they only work while you are utilizing that program. What makes As-U-Type unique is that it monitors keystrokes in ALL of the software programs you use, and it is highly customizable. You can add words you commonly misspell, along with their correct versions, to the program's auto correction dictionary. As-U-Type also enables you to create keyboard shortcuts that you can use to quickly insert boilerplate text, such as a technical or company names, e-mail signatures and more. You can also use this feature to auto-fill Web page form fields. As-U-Type's intelligent design also makes it easy to add exceptions to the program's AutoCorrect word list, so it will ignore words that you do not want it to correct.

In short, you can optimize As-U-Type to the way you work so that you can be more productive, whether you're typing reports, e-mails or newsgroup messages. Plus, it can save you embarrassment by correcting common spelling mistakes as you type.
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That's all for now. I welcome your comments and feedback on the Executive Technology Briefing.

Jordan Ayan
President
Create-It! Inc.

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