Following the Customer

by Steve Smith, Nov 10, 2006, 11:17 AM

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Behavioral tracking continues to be the hot topic in advertising circles this season, but it is just as critical now for the e-commerce segment. E-tailer Home Décor Products Inc. is a Web-only collection of eight sister sites that sell to the home and garden set. Their stable of destinations include Heckinger.com, KnobsandThings.com, and HomeClick. Using business optimization software from Omniture, Inc. the $80 million company has been drilling its own traffic data and applying the intelligence in a number of ways: from cross-selling and remarketing the customer base to analyzing the results of its own search keyword buys in order to filter and refine marketing strategies. You can come at behavioral data from several directions. Director of Marketing Christal Condon let us tag along as she tails her shoppers and divines both merchandising and marketing strategies from their every move.

Behavioral Insider: Without a retail presence, how do your sites get their customers?

Christal Condon: Basically through paid search and other places like comparison shopping services.

BI: Once the traffic gets to the sites, how are you tracking users' on-site behavior?

Condon: Omniture allows us to use behavior at our Web site via their page tags and javascripts. It tracks whatever a consumer can do at our Web site: if they look at certain products, the pages at which they exit. Whenever you are trying to market to consumers who have purchased before, you want to give them content that is relevant to what they want. You don't want to display things that are extraneous, because it distracts them....

We know that they browsed faucets and purchased a faucet or a sink.... People often buy other products with that purchase. If you buy a stainless sink, you may need a sink grid. So we are able to see the trends of purchases and then remarket to the same customers product extensions or different products that would cater to their purchases in the past.

BI: Are you doing that when they revisit the site?

Condon:.... Using the analytic technology, we can recognize what the consumer purchased, and we make associations to the purchase based on the data of past purchases of consumers. We know when someone buys a sink they are probably going to come back and purchase the sink grid. We look at the pattern of behavior in July and apply it to October. So the consumer sees our brand name in front of them when they would probably make that purchase. We send them an e-mail saying, a week ago you purchased a sink--have you thought about a sink grid?

BI: How effective is this in the end?

Condon: Very effective. The conversion is probably a couple of percentages higher [than it would be otherwise].

BI: Does the behavioral tracking reveal interesting patterns and affinities that help guide the remarketing?

Condon: Price points are good example. If someone buys an $8,000 top-of-the- line cook top, we probably wouldn't want to send them an e-mail later with a Weber grill that is $45--or anything along that price point. [They are] probably a luxury customer, so we can retarget our e-mail and marketing efforts to a segment of the market as well. We can look at a customer's average order value--and then also the average product price within that average order value. And then based on that, you could segment the higher end of the market.

BI: How are you using behavioral tracking to sharpen the search experience within the site?

Condon: It's the same theory as remarketing. Let's go back to a sink or a sink grid. The products displayed in the search results will not only be relevant to that search but also to past buying behaviors from other customers.

BI: So you are applying behavioral tracking to search results?

Condon: Not just what people purchased but also click behaviors. So people that often search for a faucet also often click on these five search results. We know when we refine our search results next time that those five results were relevant but maybe the other ten weren't, so we keep optimizing our internal search strategies to give the most relevant results based on past searches and past buying decisions and buying behaviors.

BI: You are also tracking behaviors related to the keywords people use to get to your site from an external search?

Condon: We tweak the types of consumer who comes to our Web sites. I don't want someone researching leaky faucets. I want someone who wants to purchase a product. I want someone that is late in their purchase decision. We are using our intelligence to tweak our keyword buys. We filter our keyword buys and ad buys. It is a continuous improvement methodology. We recognize patterns in keyword buys and consumer behaviors and we reorganize our marketing mix to segment the market, so we buy good traffic.

BI: This seems to be happening more and more. Marketers and sites are using BT on the back end of search to really drill deeply into the behaviors attached to certain keyword uses. So, you track the keywords that are leading them to your site and connect it to their on-site behaviors.

Condon: We are also able to see the return on the advertising spend. If I pay 50 cents for a click on Google and someone purchased a $100 faucet, that's a great return. By recognizing what keywords work and which ones don't work, we continually improve our marketing to maximize return on marketing spend.

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