Lee Capps would like to thank Creighton Lang for contributing this month's column. Lang is a managing consultant with The Revere Group and specializes in knowledge management and analytics. He can be reached at clang@reveregroup.com.

Over the last few months, we’ve introduced the concept of pervasive computing and talked about whether or not more information means we’re more informed. But where exactly is all of this information coming from? Indeed, as the target of a number of information collection activities that now pervade our daily lives, we are the very source of the millions of bits and bytes that are constantly used to define us. Interested yet? Wondering how your favorite corporation will use the idea of pervasive computing to compete in the future? Think clickstream analysis and its more advanced cousin, Web analytics.

"To unobtrusively gather information that allows a company to provide more value-added services to its customer" is a primary business objective that developed out of the Internet revolution of the late nineties. As a consumer, you are less likely to know it is happening, but the organizations you deal with are collecting your actions and behaviors in order to deliver the products and services you don’t even know you crave.

Consider the latest generation of digital video recorders. These systems have sophisticated programs that learn your preferences and record content that you haven’t specifically requested but that fits the viewing habits of like-minded people. As the consumer, you win because your television viewing experience is enhanced. At the same time, companies lay the groundwork for an advertising future that allows relevant content to be delivered to those who "want" to learn more about a product or service.

In fact, almost every Fortune 500 Company is far down the path of developing significant customer profiling techniques. Even retailers such as Starbucks, Blockbuster and McDonalds have electronic savings clubs and payment methods. Your benefit comes in the form of convenience, savings and personalized offers. The company’s reward is the purchase data. It is used to organize aisles, increase cross-selling activity and inform manufacturers of changes in market preferences.

Clickstream data, that endless trail of behavior left behind as users navigate the Web, provides businesses with a rich vein of information for better understanding the needs of their most valuable constituents, whether customers, suppliers, partners or employees. When combined with other enterprise information – think CRM or ERP – the corporate world is able to perform sophisticated analytical operations that deliver immediate benefits and serve as practice for the computing future.

The payback of a Web analytics program can be broken down into two types of levers in three distinct categories. Levers refer to those applications that either increase revenues or decrease the cost of doing business. For categorization, think of these payback levers operating in enterprise-wide management, internally facing systems and against externally focused sites and functions.

 

From an enterprise strategic management perspective, Web analytics:

Levers to Increase Revenues

Levers to Decrease Costs

Make better and faster tactical decisions

Enable a technology measurement program

Uncover opportunities for business partnerships

Allow for better forecasting of customer support staffing levels

Customer facing benefits include:

Levers to Increase Revenues

Levers to Decrease Costs

Increased customer loyalty

Decreased customer support costs

Increased marketing effectiveness

Decreased content creation costs

Opportunities to expand product mix

Decreased costs associated with underused site functions

Internal application levers:

Levers to Increase Revenues

Levers to Decrease Costs

Increase time allocated to sales tasks

Make training courses more effective

 

When evaluating a content production or purchase program, Web analytics not only tell businesses which content is viewed but, more importantly, by whom and when and under what circumstances. Do certain types, styles, placement or authors of content tend to lead toward a first-time purchase? Or worse, do they tend to indicate the last action a potential customer may take? For example, an online retailer might find that its most profitable customers respond to a persuasion more frequently. Regardless of the outcome, Web analytics are a means to learning.

Are customers with certain product mixes searching for complementary products or services that are not currently offered? Web analytics help identify opportunities to expand product mix. When personalization techniques are combined with other simple measures, the savvy marketer can offer more compelling cross-sells by correlating current shopping cart content with previous purchase behavior.

Web analytics also help uncover site navigation issues. A site visitor who frequently clicks around can be a troubled visitor who is having difficulty finding what he is looking for. The sophisticated Web analytics program will identify this behavior in progress and will push a customized help page or offer an instant chat with the help desk.

In the coming years, clickstream analysis and Web analytics will make use of an increasing array of demographic, technographic, psychographic and purchase data provided by you. These measures will mature and become less obtrusive than they already are. It is certain that they will pervade elements of our lives we have yet to imagine. The potential for companies to provide us with tailored services and time savings will drive consumers and providers to achieve an appropriate balance between information collection and privacy.

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