Understanding Online Behavior
Are you losing business because you're not measuring your customers' online behavior? That's what 77 percent of all businesses do, according to a study. Learn how not to fall into this trap.
By Matt Cutler
Imagine being a custom tailor and trying to fit a customer's clothes without taking measurements. Sure, you could make a best-guess, but you'd never really provide that customer with a proper fit. And as a result, you lose business.
But that's exactly what 77 % of all online businesses are doing. According to Forrester Research, only 23 percent of companies currently improve their online operations by making use of the data associated with how customers use their Web sites. However, as experts agree and the brick-and-mortar world has demonstrated, understanding and reacting to customer behavior is the number one resource for acquiring and keeping customers. Forrester leaves us with the sobering pronouncement that fewer than 200 business-to-business sites will be standing in 2003. Will understanding "E-Metrics" be a key differentiator for survival?
Brick and mortar companies use well-understood, well-defined metrics to describe business performance and understand success. While e-business shares many principles with the offline world, Web sites require a fundamentally new approach and perspective to business analytics. Today, while many e-businesses are struggling with the concept of hits versus page views for measuring success, many forward-thinking sites have begun to adopt new E-Metrics. Forward-looking B2B sites are now drilling deeper into customer interests and segments to track individual behaviors and click-stream patterns for more effective targeted marketing campaigns and communication. With this increased customer knowledge, e-businesses are able to improve customer retention, build a more loyal customer base, and increase ROI.
Online marketers know that they need to do more than simply measure "click-through" rates and loosely defined "hits." The key is to gain a fundamental understanding of customer preferences and purchasing lifecycles. In short, businesses need information to help them understand what's really taking place with their e-business, businesses should be asking themselves:
- Who are our best customers?
- What channels bring them to us?
- What are the drivers of purchase behavior?
- Which marketing initiatives generate the most profitable customers?
- Which products or services present cross-sell and up-sell opportunities?
- Which online customers buy from offline channels?
- What changes will make our site more customer-focused?
In this "down-turned" economy, B2B e-commerce sites are keenly aware that customer relationships are critical to success. The nature of e-business creates unprecedented amounts of user information. Web analytics companies, like NetGenesis, measure e-customer behavior in the context of the broader business. Measuring, interpreting and acting on information enables B2B companies to create tightly coordinated supply chains and appropriate pricing models to maximize customer satisfaction, organizational efficiency and profits. Winning B2B e-commerce companies can harness the power of E-Metrics to more intelligently plan production, coordinate supply chains, manage inventory, customize promotions for buyers and lower order processing costs for a better return on their online investments.
The data-gathering power of the Web demands a new calibration -- E-Metrics for measuring success. This development is helping businesses define, identify and extract information to understand how to operate sound e-business strategy. Evaluating E-Metrics helps a business to:
- Segment and profile customers for optimal targeting and personalization
- Understand customer lifecycles to develop customer acquisition and retention programs
- Develop real-time marketing programs to cross-sell and up-sell customers
- Evaluate Web content, track the success of marketing campaigns and refine spending levels
- Enhance site design and navigation to improve browse-to-buy ratios and retention rates
- Reduce the costs of serving customers
The bottom line is that understanding E-Metrics enables business professionals to dramatically improve the ROI of their Web initiatives.
For more in-depth information on how E-Metrics improves the financial performance of e-business initiatives, NetGenesis award-winning white paper "E-Metrics: Business Metrics For The New Economy," a 60-page research report on essential concepts, complete findings and key recommendations by NetGenesis, is available online.
Reprinted from NewMedia.