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February 7, 2000

Customer Tracking: It's Not Just Web-Site Hits
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SmarterKids.com lacked clear insight on customer needs, Noyes says, until it began using net. Analysis from net.Genesis Inc., a business-intelligence software and services provider. Now, he has key metrics when it comes to visitor patterns, page views, site duration, and conversion rates.

"Before net.Analysis, our marketing decisions were made in the dark," says Noyes. "We didn't know where our customers were coming from and what they were doing. Now we can track progress throughout the site, including where customers clicked, what pages they stayed on, and exit pages. This helps us refine everything from our marketing mix to our product assortment."

Using net.Analysis, Noyes was able to discover why visitors from a popular referral site, Microsoft's Encarta Web page, were leaving SmarterKids.com almost immediately.

"We noticed that about 95% of visitors from Encarta looked at one page and left," Noyes says. "So we tracked what was happening. It turned out that a search tool tied to the Encarta banner ad generated the problem. When visitors clicked on it, looking for popular toys such as Barbie or Pokémon, they got a 'sorry, no results were found' message and then they left."

Al Noyes Photo by Stephen Sherman So SmarterKids.com redesigned the search app to list available products automatically. During the next month, the banner performance on the Encarta site improved dramatically, Noyes says. The site boasted nearly 1 million unique visitors in a recent month and a 5.4% purchase rate.

"With net.Analysis, we know where visitors come from and then drill down and see where they clicked, understand why they abandoned shopping carts, and eventually why they left the site," Noyes says. "Since we spend about $10 million annually to acquire customers, we need to know what these new customers want and, more important, what they don't want."

Noyes says the service also helps in determining ad campaigns. "We can ask additional questions of the data, like, 'Show me top domains of the shopping population,' and we can use this then to tailor our ad placements."

Having as much customer information as possible is key to retail success, he says. "A retail Web site is a live being. It's dynamic and you have to be responsive to that live activity," says Noyes, who calls about 10 customers a week, getting feedback on the site, navigation, ease of use, and the product line.

It has never been more important to pay attention to the details. Business-to-consumer E-commerce will hit $380 billion worldwide by 2003, according to IT research firm Forrester Research. The firm also predicts U.S. online retail sales will hit $184 billion by 2004.

But, analysts say, this rosy future is dependent on whether electronic storefronts' doors open fast enough and customer service is responsive. If not, analysts say, it won't matter how many millions shop online. As it is, longer Web-page download times already cost online retailers more than $4 billion each year, says consulting firm Zona Research.

Longer download times could become even more costly because the 44.1 million online shoppers in the United States will almost double in the next year, says Zona Research director and chief economist Jack Staff. "We estimate approximately $362 million in E-commerce revenue is at risk of being lost each month because of the impact of unacceptable download times," he says.

That's a lot of money, and helps explain why more E-commerce managers are turning to tracking tools to fine-tune their Web sites.

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