“You want fries with that?”
Ah, the classic cross-sell: offering a customer something that complements perfectly what they’ve already expressed an interest in buying. It’s easy to do when they’re standing in front of your cash register, obviously hungry, harried and in a mood to supersize. But when you sell on the Web, you need to make sure that your point of sale—that is, your Web product page or landing page—is properly decked out with the cross-selling offers that will resonate with each specific customer based on his or her Web browsing behavior.
FootSmart, a direct retailer of foot and lower-body healthcare products through both catalogs and the Web, found itself in a bind managing its cross-selling opportunities on the product pages of its Website. The company sells more than 1,000 products for comfort, health and pain relief, from shoes and hosiery to back supports and bunion protection.
When customers came to the Website and shopped around, FootSmart had real estate all set up on the product pages to show them other items they might be interested in But according to Sarah Bowler, the company’s senior manager of e-retail, FootSmart had two cross-selling problems: the lack of good insight into what customers were most likely to buy as cross-sold products, and the time it took FootSmart’s online merchandising team to set up those ads by hand.
“We wanted to leverage shopping data for these cross-selling opportunities to move away from a really manual operation for our team,” she says. “Also, we were going more on gut instinct than on hard data when it came to choosing products for cross-selling.”
FootSmart was already using Coremetrics Web analytics technology to monitor shopper behavior on its site, tagging the data and applying that in its decisions about what to cross-sell where. But Bowler says the team knew there was still a significant time lag between receiving that data from the Coremetrics application and making use of it in building the product detail pages.
So FootSmart was particularly interested when offered the chance to beta test Intelligent Offer, a feature of the Coremetrics 2007 platform that automates the selection and placement of cross-selling offers on product pages.
The feature uses a proprietary algorithm to understand customer behavior on a Website and select the items they’re most disposed to be interested in, says Matt Lawson, Coremetrics’ director of product marketing. And it’s more sophisticated than the “Customers who bought this also bought…” feature that Amazon.com has made so familiar.
“Purchase behavior actually only represents less than 1% of the behaviors you can capture on the Web,” Lawson says. “The rest is made up of browsing—actually viewing a product page—and shopping, or actually adding a product to a cart. We look across all those behavioral touch points on a Website to come up with an optimized algorithm that can insert these offers dynamically.”
Bowler says that Coremetrics now sends a feed of recommended cross-sells every morning built on the most recent visitor behaviors, and FootSmart applies that feed to the site. FootSmart is able to apply its own customized business rules to the feed. For example, if there are not enough cross-sell products to fill the four slots on a given page, the software will default to a category that FootSmart selects, usually top-selling products in a category. That’s especially important in shoe sales, where new styles and seasonal products may not have any behavioral data in the Coremetrics system.
The feed is also linked to inventory information, to make sure FootSmart isn’t cross-selling items that are on back order, and to a clearance feed, so that the company doesn’t wind up offering a reduced-price item as a cross-sell on a regular-priced product page (known in the business as, yes, “down-selling”).
FootSmart started deploying the Coremetrics Intelligent Offer feature in April of this year, and Bowler says the impact was almost immediately noticeable. For one thing, automating the process spared her merchandising team the 20 hours per week they had been spending manually identifying and applying cross-selling products.
It also relieved them of the task of checking product pages by hand to make sure they were fully optimized for cross-selling. The FootSmart site wasn’t designed to notify the merchandising team when a product dropped out of inventory or was removed from the online offering, Bowler says. That left gaps in the cross-selling spaces that could persist for days before they were found and filled. Intelligent Offer makes sure those spaces get filled immediately.
That alone helped move the needle on increasing revenue from cross-sales for FootSmart, Bowler says. And the increases built once the more relevant cross-selling suggestions began to take effect. To date, she says, FootSmart has seen a 147% increase in cross sales.
“We expected good results from Intelligent Offer, but it has exceeded what I thought it would do, and I think it’s even surpassed what Coremetrics thought it could do for our business,” Bowler says.
The Coremetrics 2007 platform went into general launch earlier this week, offering online users access to Intelligent Offer and other new Web-based applications for a premium monthly fee, based typically on the number of page views, on top of the cost of the basic Web analytics package.
Another new analytics application, Real Time Monitor, offers marketers a look at the broad range of performance data from marketing campaigns and Website changes in terms of both products and revenue. Armed with this unified dashboard view of their marketing efforts, marketers can optimize campaigns in real time based on performance indicators they’ve customized themselves.
Lawson says some beta-testers of the application have put plasma TVs up in their offices to display these real-time sales metrics round the clock. One multichannel retailer with a presence on both TV and the Web is using the application to track e-commerce activity immediately after a TV message has aired—dropping the broadcast message if it doesn’t generate sufficient Web activity.
Coremetrics has also added some vertical enhancements to its 2007 solution that online merchants might find useful. One of these tracks the relative value of up to thousands of nonconversion events on a Website. Actions like downloading white papers, registering for a newsletter or signing up for a gift registry fall short of actual sales conversions as a metric of marketing performance; but assign those small events points based on their tendency to produce sales conversions and add those point total up, and you have a good indication of how to segment customers based on what they do on your site other than buy.
“For a financial services company, submitting an application is obviously your key conversion event,” he says. “But you may have other events on your site that you want to measure, too, such as whether people are using an account overview page or a mortgage calculator tool. Rich-media sites may find more value in visitors downloading a game than in those who interacted with other content on the site.”