ASP Helps Hanover Direct Track Traffic | Article

ASP outsourcingWith seven Web site brands and multiple advertising campaigns steering thousands of visitors to its sites, executives at Hanover Direct were deluged with valuable visitor information.

But they didn’t know much about those visitors and their time spent with the company. How did visitors behave from site to site? Were there behavioral similarities that could coalesce into a single demographic or customer tag that Hanover could use in its online marketing? What were they buying? More importantly, what weren’t they buying when they abandoned their shopping carts at the check-out process?

Hanover didn’t know. Rich with information but difficult to manipulate, Web server log files from seven separate sites were of little help. If only they could gather, crunch and digest the numbers at a single location.

“We couldn’t do it,” says Jonathan Kapplow, corporate Internet marketing manager with the Weehawken, N.J.-based company. “Dealing with Web logs, constrained IT resources, and with other projects going on, this would have been a hard project,” he says.

Enter Coremetrics Inc., a San Francisco-based Web traffic application service provider (ASP) specializing in behavior analysis for online merchandising, marketing and customer relationship management efforts. The company captures every customer’s journey through a client’s Web site, processes the information, and provides its clients Web-based access to both raw data and defined reports, says Brett Hurt, Coremetrics chairman and chief architect.

Executives with Hanover were struggling to tie together browsing information with customer purchase and registration information, Kapplow recalls. The company runs online and off-line advertising, but it couldn’t track the effectiveness – or even the source – of new visitors, he says. Who were their best customers? Where did they go on the site? How much time did they spend there? Kapplow and other marketing managers at Hanover didn’t know.

And most importantly, why did some customers leave the site without purchasing items already placed in a shopping cart, and was there a way to entice them back, wondered Scott Schopen, Coremetrics vice president of product management.

A New Way to Track Several Web Sites

ASPs have found their way into numerous client applications, with customer relationship management being only one, says Jessica Goepfert, program manager for ASP and BSPs with International Data Corp., a research consultancy in Framingham, Mass.

While the economy of late has slowed client signing of new ASP services, the business arguments remain strong, she says. Companies report upward of 404% return on investment and better utilization of internal resources, she notes.

“They are receiving the benefit in a one-two punch,” Goepfert says. “You get the benefit of the application, but it’s being hosted and managed by someone else. So that frees up your staff.”

In Hanover’s situation, outsourcing data collection and warehousing solved a recurring internal problem. With many online merchandisers, data is stored in a variety of separate areas, Schopen says. The first step often is to funnel the information into one database. But with Hanover having seven online sites – including Domestications.com, TheCompanyStore.com, Improvements.com, Silhouettes.com, InternationalMale.com, Undergear.com, ClearanceWorld.com and Gumps.com – putting all visitor information into one location became paramount to learning about traffic patterns. The cost of gathering information for each site, building a software tool to measure behavior and the personnel requirements to do so would be daunting, he says.

“It was tough for them to track Web site visitor behavior across all seven properties. Traditionally browsing information was stored in one silo and transaction data was stored in another,” Schopen notes. “It’s always been difficult understanding the conversion rate. In any situation it’s going to be tough to tie together the log files from one site to the next. We were trying to solve a number of issues surrounded by all of the applets.”

Coremetrics provided a virtual data warehouse for each of Hanover’s separate sites. The company now gathers individual user information, including click behavior, purchase patterns, and the points at which they log off – especially if they log off at the check-out page – and stores that information. The data then is streamed to the client via XML technology. Or client executives can log onto the Coremetrics site and look at their own data from all seven sites. Usually, companies with a variety of sites have different interfaces to master to be able to see their user information.

“With our site, Hanover has one language and interface, and a common terminology,” Schopen says, noting that its buyers – from senior marketing executives to managers who will deal with the information day to day – each participate in day-long on-site instruction on using the service. Modules include merchandising, campaign analysis, using click stream analysis, navigation, checkout process and shopping cart abandonment habits.

“All of their Web site visitor behavior is contained in one interface at Coremetrics, and they learn how to use the information contained there,” Shopen explains.

One global license covers every user in an organization. Coremetrics’ “eLuminate” offering is a month-to-month service that ranges from $5,000 to $20,000 a month, depending on the level of traffic and size of client. Its higher tier “eLuminate Commerce” product provides enterprise exchange, XML data exchange, and feeding of content to marketing partners for digital campaigns. It is priced from $100,000 to $500,000 a year, again depending on size of the client, the complexity of information and the volume of traffic.

Marketing To Those Who Never Check Out

The site delivers detailed behavior information, and can be used to better target customers – especially those who didn’t complete a purchase, Hurt says. For example, buyers like Hanover can look into the shopping cart of a customer who left without making a purchase. They then can target that customer with an email offering a discount for those items, Schopen says.

Hanover brand managers can look at demographic reports tailored separately by brand. Coremetrics also provides business insights, deep analysis of conversion points, click-through analysis, and home-page navigation. The client can now tell if a person makes a purchase weeks later and where they clicked through earlier on.

Campaign reports also help the ASP’s buyers understand and decide what’s the most effective way to advertise and entice customers to purchase online. By knowing where customers came from, Hanover now can measure sales against its advertising investment. This can lower the cost – and boost the efficiency – of online marketing. This is especially true in pay-for-performance affiliate networks, where they can use the system to determine how much to pay for the leads. The result has been improved efficiency, increased conversion paths and revenue, and better enticement of customers to select more merchandise and complete the checkout process, Kapplow says.

“We get this nice cross-brand view of all the different metrics,” he says, “and it’s very easy for us to spot good and bad things. It allows us to line item your efforts campaign by campaign and review that partnership or initiative. We’ve been able to cut away some of the partnerships that weren’t adding to the profitability.”

Adds Hurt: “Imagine if you could determine the real dollar value of every ad you place. Online you can do that by session or lifetime with every email, affiliate relationship, every banner ad. Before Hanover implemented Coremetrics, it didn’t understand why people came, what they did and why they stayed – and how to convert visitors into shoppers.”

Lessons from the Outsourcing Journal:

  • The more sites to be tracked, the more likely a CRM ASP can bring value, and help avoid expensive IT, infrastructure and personnel costs.
  • Expect to spend time training key personnel on the ASP’s application and reporting features.
  • Knowing why people don’t check out their shopping cart helps determine follow-up marketing campaigns to convert visitors into shoppers.
  • CRM experts can help you determine the ROI of every ad you place.


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