Use the Right Tool
Clearly, drugstore.com appreciates the value of raw data stores, but it is among the early few who do. Many online retailers, especially in the pure-play Internet space, are only now waking up to the heavy data-lifting and hard-core marketing strategies required to entice customers into staying for the long haul.
"Customer retention is part of a bigger challenge that comes under the heading of customer relationship management (CRM), and companies are struggling with this online," says Eric Schmitt, an analyst with Forrester Research in Cambridge, Massachusetts. "Companies have to take advantage of decidedly unsexy technology -- things like serious data mining and business intelligence -- and they have to do a better job of making a commitment to being customer-focused."
To be fair, commercial high-octane tools designed from the ground up to root around in Web data are only now emerging. The first generation of Web site analysis tools, from stalwarts like WebTrends, were geared mostly toward counting page views and unique visitors.
More traditional business-intelligence packages from the likes of Business Objects and Cognos weren't built to understand clickstreams or online advertising campaigns. The next versions of online-intelligence tools, however, should provide a deeper, richer understanding of customer behavior.
Accrue Software, Coremetrics, NetGenesis, and Personify are all bulking up their product lines to help companies gain insights into how effective their online marketing and customer-service efforts are. Other players in this space include Quadstone, which recently released CustomerConversion, a product geared exclusively toward this online customer conundrum. Ithena, a spin-off of Business Objects, is proffering so-called e-customer-intelligence applications; and SAP offspring TeaLeaf Technology has an analytics solution that reconstructs session data piece by piece.
The next, most obvious hurdle for many of these vendors is to tie the data generated by Web sites into the other customer and order data that businesses have lying around their networks. All these product vendors, however, are working to address this challenge by one-off integration efforts, by creating adapters for off-line data stores, or by as-yet-unannounced techniques.
Alongside the analysis tools are e-marketing products, which are also getting progressively more sophisticated. Responsys.com, a player in the direct e-marketing space, is offering services that let its customers send personalised, targeted email campaigns based on consumer profiles and shopping habits. PrimeResponse, a marketing software company, delivers both data analysis and online campaign management through its Prime@Vantage line. Another company, Xchange, offers a three-pronged product line for synchronizing customer data across channels, conducting marketing campaigns, and measuring their effectiveness.
In addition, E.piphany is hawking its E.5 platform, which comprises a smorgasbord of electronic CRM, data analysis, and marketing tools. And newcomer Revenio officially unveiled Revenio Dialogue in September, which allows companies to conduct the equivalent of electronic conversations with individual customers and convert those into sophisticated marketing campaigns.
These technological developments and others are certain to help companies down the path of better customer relations. But as Joel Book, director of e-marketing strategy for Prime Response, points out, all the technology in the world can't replace solid business practices. "We talk about understanding what's working and why, and you need data and analysis for that," says Book. "But you must have a solid marketing strategy before you can get to that point."
