For the Thanksgiving holiday, I traveled from my home in San Francisco to my parents’ place in upstate New York. On the flight out, I sat next to a former Microsoft executive who in the past year had moved from the Pacific Northwest to Silicon Valley to join a start-up software company.
The company developed a recommendation engine based on the gaming theory — a pretty innovative solution to a vexing issue, if you ask me. For all the information we have about customers, we still have a tough time trying to figure out what they are going to need or do from day to day.
We had an interesting discussion about tracking on- and offline activity and predicting behavior. Halfway through the conversation, it occurred to me that comparing the odds of winning at blackjack, craps, or slot machines with our collective ability to predict customer behavior might be a telling sign of the immaturity of the market.
Don’t get me wrong. I think the solutions that exist on the market for tracking and analysis are sophisticated and incredibly useful. What I am questioning is how well we can use the information they provide. The problem has to do with the unpredictable nature of customers, not the limitations of our tools per se.
Tracking Can Improve CRM
In my last piece, I mentioned that I would look at solutions for helping you and your colleagues company-wide manage customer relationships. It’s going to take me more than one article to do this topic justice, so this week I’ll focus on the first of three key areas:
- Tracking solutions
- Analysis solutions
- Personalization/predictive modeling solutions
Tracking solutions such as NetGenesis, Personify, and Accrue provide advanced capabilities in tracking and reporting on site, click-stream, and marketing activity. Such products may differ in design and method, but they are programmed to identify consumer behavior and help marketers better understand what consumers are doing and how they are affected by various marketing, merchandising, and advertising programs.
Each organization will develop its own unique approach to tracking customer behavior online. A company with a million customers will have vastly different needs than a company with a thousand. Although I believe beginning to track the results of your web initiatives is important, investing in an infrastructure for tracking and the subsequent analysis should not be done without first identifying the specific information needs you have.
Where to Begin
Is it essential to track and store every click a user makes? Probably not.
Identify key customer events, such as the initial visit or purchase, and use those to begin developing your plan. It will save you time and money to do that before choosing a software solution.
When we talk about tracking a relationship with a customer, we really want to understand how advertising, sales, marketing, customer service, and operations each influence the relationship. To that end, it is important to consider any tracking solution in the larger context of a CRM initiative.
The questions you should answer are:
- Why are we tracking online activity?
- How will we know when we have achieved our goals with our customers?
- What are we doing to ensure that we look at the relationship across all touch points?
- How will this information help us better serve our customers, our suppliers, and our own operations?
Have you ever seen those futuristic films about the technical utopia that we were supposed to have created by now? You know, where everything is automated and we become highly productive beings of leisure?
Well, as you’ve no doubt noticed, we aren’t there yet and consequently still have an awful lot of work to do.
To help you with some of that work, next time I’ll present a class of tools that will help you do simple and complex analyses of marketing and other data from across the enterprise. In the meantime, if you have any specific questions or challenges you are confronting, please feel free to drop me a line.
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