Recently Farmer’s Insurance group with the help of IBM pulled 2 million policies from its database to run a pilot test using IBM’s Decision Edge software.
They found that apart from young 20 something single guys, married boomers with kids also bought sports cars. They paid same insurance surcharges but claim rates were less. Hence they began to offer discounts in policies and lax rules for such sports car enthusiasts.
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Many companies are using data mining to determine who are their best customers and how better to market products and services to them.
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Only 8% of respondents in a survey currently use data mining software, while 54% plan to purchase data mining tools in the near future. Big companies like Amazon who took over Alexa internet and Yahoo which bought out Hyperparallel are trying to earn value from bits and bytes of data from Netizens.
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Data warehouse with more than 1 Tb will increase from 19% to 30% becoming largest segment this year.
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Success Stories with Data Mining:
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Data mining led Fingerhut to discover that customers who changed their residence tripled their purchases in the 3 months after their move. Hence they developed a special ‘new mover’s catalog’ to target this segment. Clustering customers into various segments is an important objective of data mining.
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Preparing data for data mining takes upto 80% of the total time according to SAS institute.
Sometimes there are hundreds of variables affecting a metric. Data mining gives you ability to sift through these potential variables to determine the most important ones.
Even though the results may be questionable sometimes, data mining is a very important tool to segment and target the customer and gain insight.
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Data mining + people with solid knowledge of marketplace = Building strong customer relations.
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As has been rightly said by GE’s former CEO “Potential is Unlimited”, and that is exactly the case with the possibilities present for Web Analytics. Although many unbelievable things can happen with the use of Web Analytics, but we will here cover only those for which research is undergoing, and products based on these researches will be in the market in the near future.
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(Price per Click) PPC/ CPC (Cost per Click) to be converted to cost for “lifetime visitor value” or “lifetime user margin”
Dynamic ad sense- ads to change their placement and size for every user- even change contents dynamically from the companies website.
Advanced Customer Retention- the reasons for the customers not coming back will be analyzed, and automated product recommendations will be sent.
Advanced data creation- user search words will be analyzed, and cross checked with the profile, and segment database to come out with his future search options, and the data will be created on the go before he wants it.
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Download Complete Power Point Presentation (2.1MB) on Analytics (& Web Analytics including SCL Analytics).
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•Old Mutual plc is an international financial services group of worth £3.8 billion
•Providing life assurance, institutional and retail asset management, banking and general insurance operations
The Challenge
•Earlier Web Analytics solution was limited to fixed monthly reports
•Limited insight into products and services favored by their customers was available
•Much effort was required with developers for custom reporting
The Results
Demographic Online Behavior
1.Tracking users by their clickstreams
2.Identifying if there are any demographic patterns in their site usage
Content Usage
1.Providing Old Mutual with each of their internet visitor’s clickstream paths, including their preferred and most-frequently used content and stores all of this information in the NetTracker web data warehouse
2.Allowing Old Mutual to extract online behavior data from the web data warehouse and integrate it with sales lead data
3.Analyzing and improving Intranet content usage by employees.
Site Usability
1.Identifying the problems in site usage. For Ex: problem in search option was identified and solved
Others
1.Tracking responses on banner ads as well as other ad campaigns
2.Revealing the repeat visitor behavior
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2. Fairchild Semiconductor
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About The Company
•Fairchild is leading player in Semiconductor industry
The Challenge
•To analyze web site traffic for each line of semiconductor chip and the success of ad campaigns
•To determine how to continue site development such as discovering viewer patterns and analyzing which features keep visitors the longest, draw the most attention, work well and suit the needs of the majority
•To analyze site performance and view reports across the country
The Results
Analyzing Ad Campaigns
1.By using a unique URL within each print ad, number of visitors attributable to that ad via their entry page can be tracked.
2.By analyzing clickstreams and custom reports it is possible not only driving visitors to the site, but making them complete a desired action
Content Usage & Visitor Segmentation
1.Tracking each web page within their specific product lines
2.Measuring the site’s effectiveness by viewing who is coming and if they are already targeted
3.Conducting user study of the site to see how long people stay and what they are interested in
Others
1.Assisting in web site development such as which HTML code is best suitable
2.Tracking how visitors enter from a search engine like Yahoo! and whether links to the home page or farther into the site are more successful in drawing and keeping traffic high
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Ever wondered how you get to see only those advertisements when you visit any website (with google ad-sense installed) that you are interested in?
Is it that everyone likes the same products that you like, or is it that google knows what product category you are interested in?
Its no brainer right?, its the second option, google is customizing the ads to be shown to you so that your probability of actually hitting those ads (visit probability) and purchasing products from that website/ company (transaction/ purchase probability probability) increases.
Now why Google does so?
Simply because today’s consumers are empowered enough to control what they see (as in TiVo), and for how long they see it. If your primary purpose to visit that particular website is to gain information from that website, you will simply close that website after your objective is achieved, without giving any revenue model to google (Google also requires money to bring all these services to you and for future R&D), and the site owner.
So in order to engage you in some business activities, it has to really transform you to buying mood by showing all the products that you had always desired to buy, at the price that you had desired to buy (well at least they think that we can afford that product at that price).
Now the big question is how does Google knows what products can lure you the most?
Well here lies the answer to the topic of this Blog, it is Web Analytics!!! (combined with web analysis).
But knowing user preferences (and also calculating the Cost Per Click (CPC) for every click that is made on the ad-banner on any site) is not the only thing that Web Analytics is capable of (although it is one of the largest revenue model, with future scalability). If you ever wondered how I am able to know the: -
1. Number of people coming to my site,
2. No of times each page is viewed,
3. All the key words searched (with their frequency) on my site,
4. The keyword being searched on net that bring people to my site (with their frequency),
5. The keywords that were searched the most (with frequency) on my site, but failed (i did not had contents on that key word), which will help me decide what content i should write next on my site,
6. What were the browsers (with distributive percentage frequency of each) that people used to visit my site (and the error messages that each one received),
7. How much time users spent on each of my page,
8. After which page users were switched off from my site (with frequency), and either closed it, or went to some other site?
9. The tags that drove the maximum traffic for my site, and a lot more insights…
This all and a lot more is possible with Web Analytics. Although Google Analytics does not offer all such features, but there are many such companies that does.
Now the Question arise that, then what is Web Analysis?
Instead of writing a full long paragraph explaining it, i will just quote an example to illustrate this. When Google collects all the data of your using various websites, online services, the messages that you send on Facebook, or the scraps that you send and receive on Orkut, the profile that you have mentioned and look out for in LinkedIn, and so on, when collected all together so as to make it meaningful for any the purpose of any analysis is Web Analytics.
But when your profiling (as obtained from the Web Analytics stage above), is used to statistically find what product categories you will be interested in now, and in the future (so that relevant ads can be placed on the websites that you visit), is Web Analysis.
Summing up in short, the collection of RELEVANT data from various sources, and putting it into a form so that it can be used for further analysis is Analytics, and driving useful information from the data collected (using analytics) to derive USEFUL information from it (often using Statistical Softwares), so as to make BUSINESS DECISIONS based on that information is Analysis.
When this process is put to any business process it is called Business Analytics, and Business Analysis (as done by consultancy firms), and when this process is kept specific to online web related process (including social media sites like blogs, twitter, Facebook, discussion forums etc, besides regular websites) the terms used are Web Analytics and Web Analysis.
Summary: -
To summarize the whole concept of Web Analytics in bulleted points (obviously so that you have a ready made power point presentation for any occasion), we can say that web analytics is: -
Web Analytics is The Decisive Tool for online customer intelligence.
It is the process of measuring site statistics and analyzing traffic behavior.
Web analytics can be used to diagnose server or site problems, and measure the effectiveness of marketing and advertising campaigns.
The main benefits of web analytics are to :
Monitor your visitors and users
Measuring and maximizing ROI
Better Target Your Marketing Efforts
Optimize Conversions & your website
Pinpoint Online Revenue-Enhancing Opportunities
Formulate a sales and e-marketing plan
Save On Customer Support Help Customers help Themselves
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