The Parables of E-Business Intelligence

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There is a Zen parable that addresses a classic philosophical challenge: How accurately can a conceptual model describe the physical world? The parable goes, "Facts and events and ideas are terms of measurement rather than realities of nature."


In terms of e-business intelligence, this parable could be restated as "Hits, page views and visits are terms of measurement rather than realities of customer experience on your Web site."


So, while we as marketing and business managers often get caught up in the numbers, we risk losing sight of what really counts: ensuring that each and every visitor has a positive, productive experience on the Web site.


How can you stay focused on what really counts? By following these steps:


• Build a holistic understanding of your online customer in the context of your overall business strategy. The more actionable information you have about your visitors, the better.


• Develop core Web metrics that provide insight into your customer's online experience. Page views are useful, but concepts such as retention, recency and frequency are more revealing and more actionable.


• Ensure that your customer understanding continually increases. This requires a range of detailed analysis over a long period of time and is built one piece at a time through focused inquiry.


Here's another parable: "We stand in our own shadow and wonder why it is dark." This points out that, more often than not, the biggest obstacle we must overcome is ourselves. Additionally, much of the frustration we feel from being in the dark is caused by situations we control.


Imagine that you are instructed to move 5 million items from Dallas to Paris. You start to panic, considering how many movers you will need, how much the freight will weigh, whether you can use planes or boats to cross the Atlantic and more.


Then you are told that each item is one grain of sand, so you realize that all 5 million will easily fit into a small sack. Next you learn that the Paris in question is Paris, TX, not Paris, France, so your journey will be barely 100 miles, rather than almost 5,000. Now, why did you have so much anxiety?


In terms of e-business intelligence, determining site strategy and direction can be a daunting task: Your team is understaffed, the site infrastructure requires a steady supply of baling wire and duct tape just to make it through the day, and every week seems to bring a new revolution in Web technology. The good news is that your organization is ready to spend serious money in support of its Web site; the bad news is that you cannot discern a clear path through the shifting minefields of e-business.


Why is no clear path evident? Because most of today's e-businesses have only a rudimentary understanding of their online customers. This is difficult because we cannot see our online customers like we see our traditional customers in a bricks-and-mortar business establishment.


How can you stop standing in your own online customer shadow and see the light?


• Recognize how much data you really have at your disposal. Your online customers leave behind more behavioral data than in any brick-and-mortar enterprise. But very few companies do anything useful with this data.


• Integrate enterprise customer data with your online customer information. You can find volumes of valuable customer information from inside your existing enterprise systems as well as from third-party pooled data sources.


• Incorporate e-business intelligence into your strategic decision making. Once you have built a solid understanding of your online customer, you will be able to make more effective, more confident tactical and strategic decisions.


Want another parable? "We shape clay into a pot, but it is the emptiness inside that holds whatever we want."


This is a classic Zen parable, pointing out that most usefulness originates from nothingness rather than from physical substance. Such can be said of the walls of a house. The empty rooms are what provides the house's utility, not the walls themselves.


Think of this in terms of your e-business: Building the walls is the development of your Web enterprise along with your business model. The emptiness refers to the goals and results you are looking to achieve with the use of your e-business.


You have created your e-business, you have a Web site, a business model and maybe other added-value features such as personalization, content management, ad servers, etc. You and your team have spent countless hours and sleepless nights shaping the features, tools, products and services that will entice your prospects/customers and make your e-business successful. Your business is evolving, but it is still empty. Are your goals being met? Are you getting the results you intended? How can you be sure that you are not guessing what your users need? Wouldn't it be great if you could base your decisions on facts?


Your site is open, visitors are coming, but it is difficult to get customers to use your site properly and next to impossible to evaluate any consistency for having them meet the goals you have intended for them. Your business is empty, but this is not all bad. The emptiness is your opportunity. There are some visitors doing exactly what you intended them to do while others are doing things somewhat correctly, and of course there are others that are lost and completely wasting your bandwidth.


In essence, you do have all you need - it is in the data that has been collected from all of the visitors and the actions they made on your site. You have the ability to fill your walls with what you want. To see what is working and, more importantly, what is not. Once you have a better understanding about what is and is not working on your site, you can make more informed decisions on how to target your online customer.


The emptiness holds the answers that fill your business with the knowledge necessary for gaining a better perspective on your visitors and, therefore, allowing you and your company to gain a more holistic view of your most valuable customer.


Once you have built your walls with the broad business goals that your e-business is intended to achieve, you can continue to fill the room with the data and other necessary information that will allow your company to evolve its strategy. The opportunity to fine-tune your offering directly, to how your customers wish to use your e-business is now yours. You can intelligently understand your visitors and make smart decisions based on facts, not fiction.


Matthew Cutler is co-founder and chief e-business intelligence officer at net.Genesis Corp., Cambridge, MA. His e-mail address is mcutler@netgen.com.
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