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<H1>Bringing Them Back</H1>
<H3><FONT color=#003300><B>Customer retention is the name of
the game, and "Web mining" your customer interactions can help
you win it </B></H3></FONT>
<P><!--AUTHOR-->By Jesus Mena
<P><BR><BR><!-- START OF ARTICLE CONTENT -->
<P><B>With every click of the mouse</B>, visitors to your Web
site are telling you what products and services they want. But
more important, they are also telling you who they are; these
visitor and customer interactions reveal important trends and
patterns that can help you design a site that effectively
markets your products and services.
<P>However, like most other firms, your organization is
probably unprepared to decipher this avalanche of data. A
recent survey by Forrester Research of 50 of the largest U.S.
corporations found that three out of four were not using their
Web data at all. (Admittedly, all the surveyed firms vow that
they plan to use this information to drive their marketing,
sales, and customer service by next year.) And if large
corporations are not using their Web data, small-to-medium
sized companies are even less likely to leverage this asset to
uncover core customers.
<P>Your firm is probably already using some sort of log
analyzer and may subscribe to an ad network such as Flycast.
However, log analyzers, packet sniffers, plug-ins, ad
networks, and ad managers report mainly on TCP/IP activity and
not consumer demographics, lifestyle, values, behavior, and
attributes. In essence, they report on browser activity, not
individuals. Some of these tools do provide valuable
information about how visitors found a site, what keywords and
search engines they used, how long they stayed, and so on, and
banner ad networks and ad managers can provide some valuable
insight into clickstream behavior. However, the bottom line is
that these types of tools provide little insight into consumer
habits and life- styles, which are what e-businesses need to
know in order to manage customer relationships.
<P>In retailing and other verticals, whoever has the best
knowledge of their clients’ preferences, rate of consumption,
and overall behavior will get a bigger share of business in
the long run. In addition to click-through behavior, your Web
data can also reveal certain lifestyle information about your
customers, which in the end you can use to strengthen your
relationship with them. Failing to leverage this valuable
insight about your current clients will only damage how you
deal with them — eventually driving them to your nearest
competitor.
<P>As I’ll explain here, the most effective e-businesses will
be those that use the Web data they generate daily to make
ongoing strategic business and marketing decisions. In
addition, successful long-term organizations will also be
those that mine their Web data and combine it with external
demographics to better understand who their core customers
are.
<P>
<H3>Collecting Web Data </H3>
<P>Meeting this goal comprises several fundamental steps:
including collecting online data, enhancing it via offline
demographics, and then mining it to drive customer
relationships. But one of the problems in mining Web data is
its diversity; a single customer interaction may be captured
in log files, email servers, or databases created from site
forms.
<P>Every visit to a retailing site generates important
consumer behavioral data in these places, regardless of a
sale. Thus, one of the challenges in mining Web data is
organizing it into a cohesive view of visitors and customers.
A good strategy is to quickly interact with your visitors and
customers via registration and purchase forms, enticing them
with contests, free offers, and discounts. These forms are by
far the most effective method of gathering Web site visitor
and customer information.
<P>Forms are a simple browser-to-server mechanism that can
lead to a complex array of customer interaction from which
lasting customer relationships can evolve. This relationship
can turn into a direct feedback system through which a
consumer can communicate with your company; helping you gather
important consumer information that you can further enhance
with offline demographics. For example, forms let “e-tailers”
interact with customers and collect intelligence about their
needs, values, choices and preferences.
<P>However, you have to be careful to ask for only the most
essential information; nobody likes lengthy and intrusive
questionnaires, especially those dealing with personal
finances. Various optional methods and sources for gathering
demographic information — rather than asking for it directly —
are available.
<P>For example, in order to benefit from third-party data
providers, you need to capture both email and physical
addresses from your visitors and customers. To ensure you are
capturing the correct information, give them something in
exchange — anything from a free calendar, to coupons, a white
paper, or a mouse pad. Then you can use the addresses to match
and append additional demographics as well as deliver a
targeted offer or incentive. A demographic provider can use
the physical address to match important household information,
while an e-tailer can use an e-mail address to deliver a
targeted offer or incentive to that same customer.
<P>
<H3>Enhancing Web Data</H3>
<P>The success of any Web-mining project largely depends on
the quality and depth of its data. A common methodology in
data warehousing is to leverage the value of internal customer
information by appending the external demographic and
behavioral data. Similarly, you can append a variety of
demographics to the information you capture from your
registration and purchase forms. This demographic and
household data can range from your customers’ projected income
to the presence of a pool at their home. You can then link
this external information via a physical address to your Web
site database, enabling you to gain an additional insight into
the identity, attributes, lifestyle, and behavior of your
visitors and customers.
<P>This demographic and household information is available
from various vendors, including Acxiom Corp., CACI, Experian,
and Polk. In fact, an entire industry is now devoted to
segmenting, classifying, and reselling consumer behavior
information. Obtaining a cohesive and comprehensive view of
customers involves not only using powerful data mining
technologies; it also requires enhancing internal
transactional data with this external consumer information,
which describes the tendencies and values of customers in
detail.
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