The formula for success in e-business stands upon the twin pillars of e- commerce and customer intelligence. An e-business strategy that unites these two disciplines is sure to succeed. But e-commerce without customer intelligence, or vice versa, is doomed to yield results that are mediocre at best.
Customer intelligence (as opposed to business intelligence) refers to the tools and strategies for collecting, analyzing and leveraging customer information. Customer intelligence enables companies to better understand their customers (i.e., lifetime value, demographics, profitability, preferences, tendencies, etc.) so they can more effectively acquire, retain, service and/or cross-sell those customers to meet strategic business objectives. Customer intelligence marries decision support tools with database marketing and customer relationship management (CRM) practices and products.
Unfortunately, e-business tools available today don't readily integrate e-commerce and customer intelligence capabilities. Call this the "e- gap," if you will.
Many e-commerce packages enable your company to establish a Web storefront and take electronic orders within weeks. But, unless you really know your customers and personalize their Web site experiences based on a comprehensive view of their behavior and preferences, your Web storefront will fall victim to more customer-conscious competitors that are only a click or two away.
Conversely, a company that understands its customers but views its Web site as an electronic marketing brochure or product catalog is missing a large opportunity. The Web gives companies unprecedented power to reach out and touch customers on a personal, albeit electronic, level. The Web makes it possible for e-businesses to achieve the holy grail of one-to-one marketing.
Sophisticated Web Site Analysis. One marketing manager I spoke with recently was frustrated because she can't find a tool that correlates customers' on-line behavior with purchasing activity. Specifically, she wants to know which Web pages are driving purchases and which are causing "dead ends" customers who leave the Web site without purchasing something or registering. The marketing manager also wants to compare the profitability of her company's e-commerce channel with other sales channels to determine whether the Web site is cannibalizing, augmenting or extending those channels.
Most Web site analysis tools today report only on activity at the Web site, but they can't correlate Web traffic with transactions or other data in operational systems.
Tools that fill the e-gap will help companies understand the dynamics of their e-commerce channel and its impact on other customer touchpoints. These tools will help companies improve the design of their Web sites to increase sales and foster customer loyalty. They will also help the company better manage the total customer experience across all channels.
Customer Enriched Personalization. Other managers we've talked with want to provide all Web site visitors with targeted offers and personalized content based on enriched customer profiles. These profiles might contain contact information and preferences, transaction data culled from various operational systems (i.e., marketing, sales, service and e-commerce), demographic and psychographic data, segmentation classifications and predictive modeling scores. Today, personalizing Web content and making offers based on detailed customer information are not easy tasks.
Most current e- commerce platforms personalize Web content and offers using hard-coded business rules based solely on Web-generated data. The rules might personalize content based on a user's TCP/IP address, a previously stored cookie and a Web page or site the visitor just viewed. Some sites also use collaborative filtering to personalize content based on an analysis of the customer's recent on-line behavior and that of other Web site visitors.
If the Web site visitor is known (that is, she's indicated preferences in an on-line registration form), then the e-commerce platform can serve up content, products, offers or ads that match her stated preferences. This is fine, but it stops short of providing real-time personalization based on a 360° view of the customer.
Imagine that an unidentified Web visitor registers to enter a monthly raffle at your site. In real time, the e-commerce system discovers that the visitor is an existing customer who recently purchased a pair of hiking boots in your Boston store. Demographic data also indicates that this visitor enjoys "extreme sports" because he recently purchased a motorcycle. Based on this week's promotion rules, the system automatically generates a Web page that offers the visitor a 15 percent discount on selected tents and information on an upcoming bungee-jumping seminar at the Boston store with links to bungee-jumping sites.
Personalization and target marketing based on a comprehensive, real-time understanding of the customer can help a company achieve its strategic business objectives increased sales, reduced attrition or increased customer loyalty.
There is a huge market opportunity awaiting vendors that deliver products that help companies proactively market, sell and service customers across e-commerce and other channels. Specifically, e-commerce vendors need to integrate with or embed customer intelligence tools.
Requisite Technologies. Specifically, three customer intelligence technologies are required to fill the e-gap:
3) Customer management software that enables marketers to plan, manage and execute multi-channel campaigns. This software embodies corporate strategies for acquiring, retaining and cross-selling/up-selling customers and prospects.
Niche Vendors. Some niche vendors have already done most (but not all) of the heavy lifting required to plug the e-gap. For example, Sterling Wentworth, which provides cross-selling technologies to the financial services and insurance industries, is now migrating this capability from call center applications to e-commerce.
However, many of the better known e-commerce players today offer minimal integration between e-commerce and customer intelligence technologies. For example, you can export a customer list from a customer management tool into BroadVision which can then associate a personalization rule against that list. But this process is non-automated and doesn't support real-time personalization or marketing.
Market Trends. Both e-commerce and customer intelligence vendors are working feverishly to fill the e-gap, either through partnerships, acquisitions or internal development. In addition to the pure-play Web players, CRM firms have taken the first steps toward filling the e-gap. Many traditional technology firms are beginning to put products into the marketplace.
Expect a flurry of announcements in the next six to 12 months as vendors try to marry e- commerce and customer intelligence to provide true one-to-one e-business solutions.
Register or login for access to this item and much more
All Information Management content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access