December 2008

Using online customer experiences to drive sales
Here’s how to derive tremendous value from your prospects’ interactions with your Web site. By Alan Gormley

For the average consumer, the world of marketing represents extraneous noise to be filtered out and discarded. All too often, we see too much irrelevant information being directed toward generic, pre-defined audiences in a scattershot attempt to “hit” as many people as possible. Truly, these were the dark days of direct marketing.

As we all recognize today, audiences are spending more time online and are in greater charge of their surfing habits and actions. In short, today’s new breed of 21st century consumers are looking for experiences on their own terms, not to be spoken to, per se. Thankfully, direct marketing has also evolved. Businesses – especially those with an established online presence – do have the ability to interact with the individual, rather than an amalgamated representation. What was once missing from the equation is now readily available – a set of tools to extract this information and send it to those who can effectively use it.

There is often some confusion when it comes to how best to measure customer experience, particularly online. Many companies erroneously equate visitors’ browsing habits with customer experience. They monitor all sorts of data and drill down and investigate such things as the top pages viewed, or how people arrived at their Web site or what the top products viewed were. This information is all aggregate, and while valuable for certain business decisions (Web design and navigation, server load balancing to handle traffic, general promotions) it is hardly effective as a direct marketing tool.

Online direct marketing ideally ties the individual to specific actions taken on a Web site. Until relatively recently, the technology was not mature enough to incorporate all aspects of a customer’s Web interaction and create a holistic view of the individual; one that would allow different business units to interact with them on a one-to-one and personal level.

Monitor interaction
So how does this all work?

The idea is rather straightforward – monitor an individual’s interaction with the Web site and gain value from it. Take banking for example. A bank has a great deal of information about its individual customers – how much they have in their accounts, balances on credit cards, history of paying off loans, and much more. Unless banks gain value from what a customer is currently looking for, it is likely to miss many opportunities for predicting customer needs.

Most banks have a mortgage or loan calculator (traditionally considered a value-add customer service tool) embedded in their site. But properly monitored and tied to the individual, the calculator also doubles as a great direct marketing tool. If customers log on to do some banking, and then use the calculator, there is value to be gained. The bank now can get a pretty good idea of intentions. If the customer is using the calculator to figure out payments on a $250,000 loan over 25 years it is almost certainly a mortgage they are considering; if they enter $10,000 it could be for a home improvement project, a trip, or even money for a used car. The bank not only knows what amount the customer is considering, but also what amortization periods are being considered, and even what interest rates might be appealing.

It is important to understand that people’s actions and needs online are a good indicator of their needs offline, and that the key is to connect the two. For the bank, it was to make sure this information was seamlessly pushed to the folks who deal with lead generation for its lending arm.
Having said that, it is important to remember that no matter how a company collects online information, it must respect privacy needs by offering the ability to easily opt out, as well as only collecting information that will be used rather than trying to gather as much information as possible in hopes of finding a use for it at a later date.

Banking on analytics
In the UK, a leading European bank is using an SAS® Customer Intelligence solution to better connect with individuals and offer tailored loan proposals. The technology took less than two months to set up, and most of that time was spent creating specific business rules designed to interpret the data for the bank.

Close to 50,000 people visited the mortgage section of the bank’s Web site, and of them, more than 8,000 were repeat visitors who used tools such as calculators. Several thousand of these individuals were identifiable customers. Using SAS® Marketing Automation technology, the bank was able to push these leads to the proper departments, which in turn, could contact each customer, through a variety of channels —such as e-mail, direct mail, or personal call—with a tailored offer, including loan amounts, amortization periods, and monthly payments. This resulted in greater returns than traditional direct marketing campaign rates.

Retail sales = customer details
It’s not uncommon for an electronics customer to look at several products during their visit to a retail Web site, and buy only one. Traditionally, marketing activity would fixate on the item purchased and try to build the relationship based on that information. But what about everything that was viewed and not bought? Was there a critical threshold that was not met, that having been met would create an environment conducive to buying the product rather than leaving it behind? The shopper could have just been browsing, but knowing that he or she was looking at specific products or types of products now allows the company to supply tailored offers to the customer such as discounts, free shipping or coupons, that are tailored to overcome the buying threshold. These could even be correlated to previous buying habits on the site such as a propensity to react positively to free shipping as a motivator, rather than a product discount.

On an individual level, the question may never be answered as to why an item was left behind in a shopping cart, but the more a company knows about customers’ actions, needs, and behaviours on the site, the better chance it has at addressing them. In the end, most customers visit Web sites with a purpose or task at hand. If your company can fulfil that purpose, either online or off, you have lowered one of the bigger hurdles that stands in the way of successfully connecting with them on their terms.

Alan Gormley is director, Customer Intelligence Solutions, EMEA Region, SAS. Alan works with organizations across Europe, helping them define and refine their strategy for applying Customer Intelligence. As such he has worked in all major customer focused industries to embed Customer Intelligence into business processes. As part of the SAS Customer Intelligence Management team, Alan is responsible for aligning SAS strategy and approach to market with client needs and advancements across Europe.