For a retailer, ABC Distributing Inc. has an unusual business model. The family-owned company began as a direct-mail seller of gifts and housewares in the 1950s. Rather than mail its catalogs to people's homes, North Miami, Fla., company sends them to businesses in the hopes that the workers--mostly female--will pass them around and pool their orders for such items as bean bag bunnies and car-wash kits to save on shipping costs. To keep its prices low, the company does not offer a toll-free line to call or fax. If users want to place an order, its on their own dime.
|At a Glance|
That's the way it was, at least, until the Web hit. Early on, ABC Distributing recognized the possibilities of the Internet, opening its e-storefront for business in 1996. Traffic on the Web site (www.abcdistributing.com) started out strong for this medium-sized, privately held company, and has stayed that way. After all, the company's target customers, women at work, generally have Web connections at the office, and placing an order online is the only free way to order from the company. The site currently gets about 100,000 unique visitors per day.
At first, ABC kept track of who uses its Web site with two automated traffic analysis tools, WebTrends Corp.'s WebTrends and NetGenesis Corp.'s NetGenesis. But the volume of traffic quickly made these tools, which count page views, impractical. Page views got so heavy that we had to allocate six hours per day just to run a report on the Web traffic, says David Green, Web development manager for ABC. The site has four Sun Microsystems Inc. SPARC Web servers running Solaris, and the log files from each would run well over 1-gigabyte per day. That was too much for earlier generations of these tools to handle.
So, Green and Web developer Daniel Gudema decided to get a better handle of exactly who was coming to the Web site and what they were doing using a real-time audience analysis service called HitBox Enterprise from WebSideStory Inc. In March last year, Gudema installed some HitBox code on the ABC site and customized what they wanted the reports to look like. Now, everyone from internal merchandisers to Web developers, marketing executives and the company president at ABC has access to real-time information about Web visitor behavior.
Gudema says HitBox is more useful than first-generation Web analysis tools because it allows users design the system according to their needs. For example, HitBox lets you assign a category, such as "Order Form," to a number of different URLs on the company's Web site. HitBox automatically consolidates information from all of those URLs under the name "Order Form" rather than forcing users to merge the information by hand. (The NetGenesis and WebTrends tools didn't have these features when Gudema initially evaluated Web analytic tools.) Access to Web site usage information is straightforward: Users simply log in to the HitBox Web site and up pops a summary page listing how many unique visitors the site had that hour, that day and that month. Users can then drill down into that information for more detail.
Whether you have a B2B or B2C site, reviewing your nightly Web logs doesn't cut it anymore--there's simply too much data to go through it by hand, the way most companies used to do it when they first got on the Web. For many companies, however, that process now takes too long and isn't automated enough without considerable custom programming. Report tools such as HitBox do it automatically, without custom programming. Savvy IT managers are installing a new generation of Web analytics tools to go the extra mile in gathering data on Web visitor behavior and then translate that data into new insights into what motivates customers to buy and keep them coming back for more. Companies are using Web analytics tools and services to help with everything from planning marketing campaigns to improving site design to shaping business strategy.
The definition of Web analytics is rather broad: According to a report from the Aberdeen Group Inc., Web analytics is "the monitoring and reporting of Web site usage so enterprises can better understand the complex interactions between Web visitor actions and Web site offers, as well as leverage that insight for increased customer loyalty and sales."
Web analytics tools come from a variety of backgrounds, according to Guy Creese, research director, Internet analytics, for the Boston-based Aberdeen Group and author of a report, "Web Analytics: Translating Clicks into Business." Companies like NetGenesis Corp. and WebTrends Corp. have been around since the very early days of the Internet, so their offerings come from the perspective of traffic analysis. More recently, customer relationship management (CRM) vendors such as MicroStrategy Inc. and e.piphany Inc. have been pushing their tools into this space as well. A third segment of the market includes vendors of traditional business intelligence tools, such as Accrue Software Inc. and SAS Institute Inc., which are beginning to offer versions of their products that analyze Web site data. Most of these vendors offer their software in a packaged version or under the application service provider (ASP) model as a rental service, says Creese.
The most advanced Web analytics tools help companies gain a unified view of their customers across all channels: Web, mail order, and retail operation. "Companies are driving to get a more holistic view of their customers throughout their different points of interaction," says Dave Chaffee, program director, application delivery strategies, for META Group Inc., Stamford, Conn. eConvergent Inc. and Xchange Inc. are two vendors who fit this space.
Web Analytics Software on the Rise
For a company that had never done much marketing or segmenting of customer groups, the ability to obtain more granular information in a more simplified manner was a revelation. Suddenly, ABC executives had much greater insight into their customers' needs and desires, and a way to determine if its Web site was serving those needs. Although they initially balked at the price of the service (in the neighborhood of $10,000 per month), "the executives saw the benefit of this service just from a five-minute evaluation," says Green. And by going with a service, rather than installing the software themselves, they would avoid installation and maintenance hassles.
Thanks to HitBox Enterprise, ABC is shortening the testing cycle on new products, improving sales forecasts, planning promotions, and, on the technical side, determining when to add new servers and improving site navigation. For example, Gudema altered ABCs text-only table of contents page after discovering--thanks to HitBox data--that most site visitors would give up after clicking on the first few pages of items. "So we used a table of contents based on thumbnail images instead. Now 98 percent of site visitors who click on the table of contents get all the way through the six to 12 pages," he says.
ABC uses HitBox to track customer ordering methods, monitor customer service requests, track the most popular pages, and analyze e-mail marketing campaigns. For instance, by monitoring HitBox data a year ago, Gudema figured out that 33% of customers who made online customer service requests were not being helped in real time. Armed with that information, the customer service department shored up its online services, and now 90% of customers posting queries get real-time responses, according to Gudema. The site handled 6.8 million customer transactions, including catalog requests, orders and customer service inquiries, in the last six months of 2000, considerably lightening the load on the company call center. ABC has slightly reduced its already bare-bones call center team since more business is taking place online. "To me, the software is worth 50 times what it costs," says Gudema.
(Tomorrow, in Part II, contributing writer Lauren Gibbons Paul says Web-based business intelligence tools are being used for not only for analyzing customer page views and behavior, but for honing business strategies, targeting marketing promotions, easing site navigation, and more.)
Freelance writer Lauren Gibbons Paul covers business and technology from her home in Waban, Mass. Reach her at firstname.lastname@example.org.