Corporate Information Factory (CIF) Resources by Bill Inmon, Inmon Data Systems

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Attractiveness Analysis: Getting Smart

By W. H. Inmon

“It’s the economy, stupid.” Some politicians use this simple phrase as a means of getting elected. And when it comes to success in eBusiness, the logo might well be “it’s the message, stupid.”

Ultimately, the content of the message that flows across the Internet is the deciding factor between what works and what doesn’t work. There is admittedly a fascination and novelty with the communication capabilities of the Internet. But the novelty soon fades. Companies that concentrate on the message and not the medium used to send the message are those that thrive and survive on the Internet.

So exactly what is a smart message? Simply stated, a smart message is one that is personal and interesting, with enough content to warrant a complete reading and even elicit a response.

If I send you a message to “Dear Anonymous” or “Dear Whoever”, chances are excellent that you will not read past the salutation. But even if I personalize it with your first name – “Dear Jane” – my next words had better catch your attention immediately. Money, sex, and violence work in television and the movies, but an email with sex and violence just is not appropriate (or at the very least is hard to create). After money comes a personal knowledge of who you are and your interests. And I need to pack all of that in the first two lines of the message in order to keep your attention.

So where does the intelligence required to craft a smart message come from?

The foundation of smart messaging comes from the infrastructure of information around which the Web site and the Internet are juxtaposed. Used properly and judiciously, the smart messages that can be carved from the data found in the infrastructure surrounding the Web site can make all the difference in the world when it comes to success with eBusiness.

The corporate information infrastructure immediately adjacent to the Web environment is depicted in Figure 1.

Figure 1

As dialogues occur inside the Web environment, a trail of the activity occurring inside the Web is kept. This trail is called click stream data, and tells all about what happened as the Internet user browsed data residing in the Web site.

Because of the volume of data that is generated by the activity flowing through the Web environment, click stream data needs to pass through a granularity manager before the data enters the corporate data warehouse. The purpose of the granularity manager is to edit, condense, and summarize the click stream data into a usable fashion.

One of the challenges facing the Web business analyst is the sequencing together of records of information. The click stream data comes in very small independent records. In order to make sense of the records, they must be grouped together and sequenced to form a logical picture of what has transpired during the consumers journey through the Web environment.

Another issue facing the click stream analyst at the point of passing through the granularity manager is that of extracting data dynamically from Web pages. The parameters which pass to and from the dynamic Web pages form the basis of understanding the business interactions which are occurring.

Nowhere can the infrastructure be used more effectively than at the point where the Internet user is browsing the Web site. To underline the profound business advantage of the Web analyst at this point, it is necessary to step out of the world of computing and the Internet entirely.

Consider the following: a merchant has a shop on Main Street, USA, with goods displayed in the window. People pass the window all day long as they walk along the street, and some will stop and look. A few who have looked in the window enter the store and inquire as to the price and the availability of certain goods. Eventually, a few of those people make a purchase. What information does the merchant have to go on in this (very typical) environment, as to what people are interested in and what they are not interested in? There is intuition, as the merchant is there when people peer into the window. But can one really have insight as to what is going on in the consumer’s mind? The answer is that unless one is a psychiatrist or a mind reader, what is going on in the mind of the consumer (or potential consumer) cannot be known. When a purchase is made, there is hard evidence of what is happening in the consumer’s mind. But for every purchase made, there are hundreds of other contacts made with consumers, or potential consumers; the merchant has no concrete idea as to what the reaction will be to those interactions. One can guess, but that is the best that can be done.

Now consider the Web and the Internet. Unlike the real-life scenario that has just been depicted, in the Web environment the merchant does have a very real idea of what is going on in the mind of the consumer (or potential consumer) as they go through the selection process prior to making a purchase. Through click stream data the analyst can find out:

What goods the consumer has looked at
What goods the consumer has not looked at
What goods have been purchased
What goods have been examined and not purchased
What items have been bought in conjunction with other items
What items have been looked at in conjunction with other items but not purchased

In short, the merchant using Web technology can get into the head of the consumer in a manner that is simply not possible with conventional business. And what does this capability mean? It means that the Web-based eBusiness merchant can ask questions never before asked with any degree of scientific precision:

Which ads are effective?
Which promotions are not effective?
Which ads generate a lot of attention but few sales?
Which promotions are the most effective at generating sales?

An actual ad/promotion effectiveness ratio can be assigned to each ad. Since it is known how often an ad/promotion is seen, the number of further investigations and the number of sales generated can be calculated. Typical calculations might be:

Out of 1,000 people passing by the ad/promotion, how many further investigations occur?
Out of 1,000 people passing by an ad/promotion, how many sales are generated?
Out of every 1,000 people passing by an ad/promotion, how long from the passing by the ad until a sale is made? And so forth.

By having detailed information about the attractiveness of an ad or a promotion, the effectiveness of the ad/promotion can be measured down to a gnat’s eyelash through click stream data. Now the eBusiness merchant can get a very quantified look into the mind of the consumer, something that was never possible in an earlier day and age of bricks and mortars.

Ad and promotion effectiveness is not the only important thing that can be measured by click stream data. Another very important question that can be addressed is what items are receiving no attention at all? Once the Web-based eBusiness merchant finds out what items are not even being looked at online, the merchant can do all sorts of things. With click stream data it is easy to find out what is being looked at. All the analyst has to do is to look at everything found in click stream data and subtract it from the totality of everything else and that produces the analysis of what is not being looked at. Once the Web-based eBusiness merchant knows what is not being looked at in the Web store, several important questions can be asked. For items not receiving attention:

Are they too hard to find?
Are they too expensive?
Is there a substitute product that the consumer finds first?
Are there too many products for the consumer to wade through?
Are they not being promoted?
How can the consumer find the products easily?
Is there a description of the product that is available?

In short, the online merchant knows what is not even being considered. Those products can either be removed, or measures can be taken to see to it that they actually start to see exposure. The Web-based merchant is presented with opportunities for seeing the world through the eyes of the consumer that simply are not available to the non Web-based merchant. The exploitation of this insight is one of the powerful advantages of doing business on the Web. But it is up to the Web merchant to seize the opportunity and shake the click stream data until its secrets fall out. In doing so, the business of the Web-based eBusiness environment becomes smarter.