| Zen
and the Art of E-business Intelligence:
Tomorrows Web Metrics Today
E-business Success Criteria
On the Web, the secret to success lies
in the ability to do almost anything on it.
This has both an upside and a downside.
While customer interaction is mostly invisible on the Web, the
customer is what really matters. Success
can be measured as doing the right thing 90% of the time and doing the
right thing well the remaining 10% of the time.
Making and saving money on the Web is
the reality. Statistics show
that one in three people buy online while two in three shop online.
Those that remain online longer are more likely to buy while those
that use it more often behave similarly.
Therefore, tenure and intensity online translate into experience
which leads to user confidence and purchases.
E-business intelligence focuses on web
site stickiness and web pages per visit.
As an example, eBay enjoys 23.2 pages per visit, Microsoft with
19.8 pages, and Yahoo/Geocities with 15.2 pages.
The question that should be asked is “What is reflective of what
people do on the Web?” Web
sites developed with this question in mind show savvy and are effective.
Yahoo.com manages its content very smartly because it knows what
people are looking for during that time period and puts it on its site.
The top key words for searches are sex, music, sports, travel, and
TV and movies. Yahoo has all
these topics readily available on its web home page.
E-business, business objectives, and
customers are three components that should seamlessly mesh and make “the
experience.” Defining
customer success on the Web requires different metrics.
Metrics are the interfaces and interrelationships that are business
specific to business goals. They
are function dependent on measures. Measures
are direct count or results such as hits and pages viewed that are
consistent across web sites. Facts,
events, and ideas are new terms of measure not realities of nature.
Context reflects current trend meaning and requires familiarity for
its creation.
E-business Model
The metric model for the Web will be
built over time. User and
site segmentation indicate that there is no “average” customer.
E-business infrastructure applications make customer data easily
and readily available. This
data include Internet protocol (IP) addresses, cookies, registration
information, and commodity news. User
activity can be tracked with time stamps, histories of content requested,
and browser software. Site registration may be time consuming and
frustrate customers. Some
users may be unable to follow the most desired path (MDP) efficiently or
adequately while on a web site. These
types of issues present metrics that have no counterpart in the offline
world.
The marketing vanguards for the web
include unfamiliar metrics such as affinity groups, click thru propensity,
clutter factor, page views per user, permission marketing, potential
value, syndication distance, stickiness, continuity, and wallet share. The more familiar metrics of acquisition, attrition, cross
selling, retention, up selling, loyalty, frequency, churning, and lifetime
value can also be applicable to the web.
Methodological Approach
Use a methodological approach to
capture online business. Do
what is feasible today by moving one step at a time.
This means collecting the data, scrutinizing it for meaning,
planning an online strategy, and then executing it effectively.
The 4-step process is
·
Determine the need for an E-business
presence. Scope the project
and identify business goals.
·
Understand your customer.
Define the metrics required, assemble the data, and build a
baseline.
·
Optimize E-business. Focus inquiries based on actions, distill key factors,
leverage key factors, and apply the knowledge acquired.
·
Quantify success. Measure the results and continually revise as needed.
The E-business infrastructure landscape
is varied, vast, and complex. Your
overall strategy should factor in consideration for decision makers,
online customers, and the E-business environment itself.
Do not lose sight that your purpose is to help your customer.
E-business infrastructure is expensive
and elaborate. Necessary
components include browsers, web servers, application servers, and
transaction servers. Today it
typically costs $15 million to set up a web site and $4 million annually
to maintain it. Expense is driven by labor and software cost.
This makes it imperative to compensate your best information
technology (IT) people handsomely because they are hard to replace.
By 2002, estimates project that it may cost twice as much to
establish a web site because customer expectation is rising and
competition is growing. Business decision makers are also asking deeper questions
about E-business that are harder to answer.
Stages of Customer Understanding
There are four stages to customer
understanding. They are
·
Category 1 – The customer is a ghost
and not understood at all.
·
Category 2 – The customer is a
persistent user ID, but still a “stick” figure who is not fleshed out.
·
Category 3 – The customer is an
anonymous user profile that can be segmented into a definable market
(e.g., 35-year old females who are computer literate).
·
Category 4 – The customer is a
discrete individual with a registered user ID.
One-to-one interactions are possible with this person.
You possess legacy data about this customer that can be leveraged
and used for advantage.
Determining the level of profile
information granularity becomes a question of what information is valuable
to your business and how much information is too much.
Personalization yields compelling results where users stay longer
and purchase more. Currently
less than 20% of web sites are using it.
Future E-business Trends
Some trends for E-business in the
future are
·
Customer retention. Build a holistic understanding of the online user.
This includes such things as knowing who your audience is, where
you can find them, and what is of interest to them.
Reduce the cost of acquiring a new online customer from $100 to
$25.
·
Customer focus.
The days of built it and they will come are over.
It is now a matter of giving customers what they want when they
demand it.
·
Internet time.
The Web moves at Internet time where speed and innovation are
everything. Life cycles are
accelerated and short-lived. Availability
is 24-7 and global.
- Customer Lifetime
Value. Know your
customer’s point of view and strive to make their online experience
a positive one.
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