Baynote

Recently, Scott Roth (@rothscott) from ExactTarget and I (@boazronkin), delivered a webinar that outlined innovative approaches to improving relevancy and performance of email marketing campaigns.

Webinar recording is available here.

During the webinar, we asked the marketing managers and executives in attendance about the email tactics they’ve been using, and how satisfied they were with their email results. Our inquiry was inspired by a recent eMarketer report that warned about the decline of critical email metrics, such as email open and click-through rates.

We wanted to understand why prevailing email marketing tactics have not been able to yield more than 3% click-through rate on average. In other words, we wondered why the most ubiquitous communication vehicle of all time was failing marketers 97% of the time. Here’s what we’ve found:

Question 1: We segment our emails manually. We’re satisfied with the results: (37 responses)

 

Boaz Ronkin: Almost three quarters of marketers are sometimes satisfied with the result of their email segmentations. Manual segmentation isn’t typically successful because it attempts to categorize recipients and then give the category an offer that marketers believe is relevant. But this process is, at best, a semi-educated guess. Just because you happen to be over sixty years of age and you happened to look at two mortgage related pages on my website yesterday does not mean I should email you my reverse mortgage promotion. The promotion can be completely off the mark, or, even worse, insulting. As a marketer, I should try to understand your intent and then promote the offers that other customers who share your intent found useful and engaging. Guesswork doesn’t belong in marketing.

Scott Roth: In my opinion, manual segmentation is better than no segmentation at all so I’m glad to see that people are at least doing that, but not surprised to see that they are hitting diminishing returns on over time. The challenge that you run into with manual segmentation is the ability constantly come up with meaningful segments and to also predict what offers the segments will be motivated by. In order to really move the needle, marketers need an approach and technology that will help them continuously identify new segments based on intent and optimize the corresponding offers over time – fortunately that technology exists today.

Question 2: We segment our retargeting emails based on page views, conversions, and/or abandonment. We’re satisfied with the results: (35 responses)
 

SC: Seeing that 46% of the audience doesn’t segment their retargeting emails is unfortunate, but not a surprise. While the practice of retargeting seems like it would be commonplace today, there are a lot of organizations that have yet to get on the bus. And for those that are doing retargeting, many are using a single offer and applying it to everyone that falls into the “retarget” bucket. If you really want to move the needle on email relevance, you’ve got to start looking at all of the touch points with your prospects/customers and start taking advantage of what the real-time web provides you with: up-to-the-moment information about interests and intent.

BR: The good news is that online marketers are gradually warming up to the fact that website metrics such as those mentioned above do not reflect engagement and intent—they are simply crude approximations. Let’s look at three quick examples: product sales reflect interest but are severely biased by transaction costs. Your product may generate a lot of interest and engagement, but because of a hefty price tag it doesn’t generate a lot of sales. By segmenting on sales you may end up segmenting on a pricing issue. Similarly, time on site may reflect interest, but may be biased by users who are distracted by interactive ads served on the page. By segmenting on time on site you may end up segmenting on distraction, not engagement. Finally, page views and clicks are often biased by site design. After all, the most popular click is the click on the browser’s back button. By segmenting on page views you may end up segmenting on U-turns.

Q.3: The most effective way to increase email relevancy is by using: (36 responses)
 

BR: Almost half of marketers believe that the most effective way to increase email relevancy is by using historical customer data from both online and offline sources. The reason why this approach caps email click-through rates at 3% is that past behaviors typically don’t reflect future intent. Just because I purchased a toy for my baby daughter on your website last week does not mean you should retarget me with fluffy stuff for the rest of my life. Human beings are complex creatures who often shift their context and intent within a single website visit. Trying to retarget or predict intent in real-time by looking through a rear-view mirror will miss the mark 97% of the time.

SR: Sorry Boaz, but I’m not as critical with this one as you are (after all, what’s an open social forum if we can’t agree to disagree?). In my opinion, the past does matter, and it matters a lot because it hints at someone’s willingness to purchase from you, their loyalty to your brand, their preferences, etc. But, I will agree with you that information about the past is only important when it’s combined with information in the present. Maybe I’ve purchased a trip to Mexico with you in the past, a Mediterranean cruise, and a time-share in Hawaii. Now I’m on your site looking at some in-depth information about fishing trips in Alaska. You definitely shouldn’t send me a promotion about a warm weather destination resort, but knowing what my preferences were in the past (Starwood hotels and resorts in urban areas) might help you offer me the right hotel and rental car package that will make my Alaskan fishing adventure a success!

The idea that emails should be relevant has become accepted marketing wisdom. I mean – who wants to send irrelevant email? Nobody wants be ‘that guy.’

But the idea that adding relevant content and offers to your emails can be less painful than a root canal is still up for debate - at least in some quarters. Not here.

Our secret sauce, corporate DNA, claim to fame, crown jewels, or whatever you want to call it, is all about determining a customer’s intent and matching that intent to the preferences of like-minded peers. And doing it automatically, 24/7, for every visitor to your web site. It works.

Now you’re probably thinking, “If it works on the web, why not in email?” Great idea. That’s why we’ve teamed up with a bunch of email service providers to provide email recommendations based on our UseRank technology. If that sounds intriguing, join us on Thursday August 26th at 11A PT for a live webcast with the experts from ExactTarget - Email Relevance: Every Open, Every Time. 

If you attend, you’ll get a free copy of  “The Forrester Wave: Email Marketing Service Providers, Q4 2009”.  And fewer root canal pains.

I'd just like to tip my hat to our customer TheKnot.com Wedding Shop for winning an Interactive Media Award in eCommerce.  Their Outstanding Acheivement Award was based on excellence in Design, Content, Feature Functionality, Useability and Standards Compliance.  In other words, a kick-ass customer experience.
The Interactive Media Awards competition is open to individuals and organizations involved in designing, developing, managing, supporting and promoting websites.  One of the things we like best about these awards is that have diverse categories which means that all types of websites and organizations can win. 
And since Baynote has innovative customers in all kinds of industries there is probably a category for you too.  Please let us know if you would like to work with us and submit yourself for an IMA.

Gartner analyst Mick MacComaschaigh recently added a blog post titled Collecting our thoughts and thoughts on the collective.  Like we at Baynote frequently do, he uses the analogy of how much ants can accomplish when they act collectively.  Many other thinkers have also used this story to illustrate collective intelligence including Brian Solis and Steven Johnson.

In his blog Mick says, "It can be argued that social software facilitates in some ways the next evolution of interaction between individuals, among groups and within a collective. Such social networks can be built upon our desires to be regarded in a context greater than our immediate surrounds."

As individuals, we frequently want to protect our individual voice and yet at the same time we desire to reach out to those most like us.  These opposing forces are constantly in play.  In this sense we are not like ants, who are all or nothing about the "collective."

By limiting the "collective" to those who are currently seeking the same thing, i.e. sharing a similar context, we can balance our need for individuality with the benefits of drawing on the strengths and wisdom of those who are the same path.

Mick concludes with the statement, "It is incumbent upon us to regard collective intelligence as the “killer application” for our social platform and establish an exciting base for the next phase of our cultural evolution."

We agree wholeheartedly.  The era of the lone and lonely web surfer is behind us.  It is now an increasingly social experience. Smart companies will realize their customers expect a social experience.  And for that social experience to work, you need to rely on others to show you the way.

As Mick said "If ants can do it, we can too."

We've been saying this pretty much forever.  Bizreport just wrote "If your e-commerce site doesn't already feature site search then perhaps a recent survey, conducted by comScore, will convince you to implement it ready for the holiday season."  More on the overall results of the survey are in a Search Engine Land article.

And the number of people using site search is climbing!  The survey found 40% of shoppers use search, whereas only 20% were browser.  This underpins the importance of adapting your customers online experience, no matter how they get to you, or how they find things on your site.  Search, Navigation, Recommendations - they are all important.  User generated content, catalog content, supporting editorial content - all important, all potentially deal clinchers for your shoppers.  And another nugget about how important relevant search results is, after using the site search box 94% click on between one and 10 product listings according to the study.

And fixing site search in time for the holiday shopping is still possible with no heavy lifting from your stressed out, "don't ask me to change the site before January" IT guys.  If you have search, let the crowd help you offer more relevant results.  Again, no tuning, no heavy lifting.  If you don't have site search at all, we offer a hosted site search option as well.  It is easier than you think.

Guest blog by Julie Hunt, blogger, consultant and software analyst.

While corporate websites are still important to the success of B2B vendors, these websites must change to better engage customers. Corporations must transform their websites from only reflecting the corporate POV to websites that customers want to use. Unfortunately over time and through multiple M&A actions, websites for large corporations can become nightmarish: fragmented, patched together, links leading to superficially rebranded acquisition websites, navigation that goes nowhere. For corporate teams, it can be overwhelming to try to figure out how to rein in the website sprawl and transform it to be customer-engaging and highly usable.

For professional research purposes, over several years, I have dipped into the older CA corporate website many times. The website epitomized much of what can go wrong when working from the company POV and when covering lots of different products, many as acquisitions. I experienced the difficulties of trying to track down information, finding that CA had duplicate sites that often had dissimilar information. Many times the same products were aligned with multiple solution tracks and initiatives, so the go-to-market thinking was fuzzy to visitors. Trying to get through the products list to find information was daunting - there truly were about 5 different ways to slice and dice what I might be looking for. Lots of M&A had transformed the CA site into a fragmented hodgepodge. But let’s be clear -- this previous CA site was no different from most of the other websites for large corporations, where “more really wasn’t better”.

At a recent Baynote webcast, I got a look at the new CA Technologies corporate website and an overview of the what, how and why for creating the new site: what comprises the new look, how CA did it -- and why - what was the strategy. After the webcast, I wandered through the new website, mentally overlaying the old version to see what had changed. 


What comprises the new look?
I’m impressed by what CA has accomplished. The new home page and many of the main section pages are visually stunning and wonderfully spare in the right way. Clear ease of navigation and clear communication of what CA does. The menu bar is simple but calls out the categories that matter; the navigation to CA communities is front and center, as well as the My CA link: all the sort of content that customers are looking for. The Products menu is to-the-point, and the products lists for each category are easy to navigate: wonderfully clean, brief, but sufficient. I see a CA that has integrated and organized its acquisitions in ways that should make sense to customers looking for solutions.


How did CA do it?
VP of Online Experiences Larry Walker talked about the tremendous amount of work and thought that went into the website redesign, including serious reviews of what had been tried previously and of many potential notions for redesign. At the core, the new design focuses on creating dynamic web experiences for each customer or visitor. As part of the overall website design, CA uses what Baynote calls Adaptive Web solutions which include personalization and social search for customer-focused relevance to help optimize engagement and retention.

Walker called out these guiding tenets for the new web design:
Simplify - Succinct messaging, intuitive layout, few components: for a single experience across all channels, from the customer POV
Identify - Single identity across all sites, common profile: access, subscriptions, interests
Engage – Communities, MyCA: customer-focused content and interaction


Why – What was the CA strategic thinking?
Beyond the obviously extensive analysis and planning that went into creating the new corporate website for CA, what really caught my attention was the strategy for working with CA internal teams. Walker’s team understood that strategy for successful web experiences not only mapped to greatly improved customer engagement, but saw that internal CA teams had to be convinced to support the new website approach as well.  A lot of effort went into enabling internal cultural change for CA teams to be able to work with the new “customer as buyer” and to better understand how to support that customer through the website (obviously with the hope that eventual purchase would result). Among methods to make the case internally, Walker utilized Baynote internal dashboards to help show the value of new website approach to CA teams.

Very importantly for corporate success, Walker states that efforts targeting internal teams led to these achievements:
− Improved, user-driven customer engagement  
− Content offerings managed by user value  
− Enriched metrics through customer behavior
– Changed perceptions of how to engage customers


The overall CA approach to the major website redesign strongly illustrates that customer experience is not just about external web presence, but is also about dynamic support from all customer-touching teams throughout the customer’s life cycle with a particular company.  An engaging website is only part of it – how a company works with customers for any need is key to customer retention.

About the author: Julie Hunt is an accomplished software industry analyst, providing strategic market and competitive insights. Her 20+ years as a software professional range from the very technical side to customer-centric work in solutions consulting, sales and marketing.  Julie shares her takes on the software industry via her blog Highly Competitive and on Twitter: @juliebhunt  

Technobabble 2.0 2010 Top Analyst Tweeters: Julie Hunt ranked #78 of 1000 listed

Disclosure: I have no affiliation with either CA Technologies or Baynote.

I'm a Facebook user.  And I've clicked the "like" button.  But I don't think I have ever done it for an ecommerce site, not even the ones who are trying to lure me with freebies.  According to a recent eMarketer article online merchants love Facebook's like button.  I think they may be distracted by the latest shiny object.  As social tech guru Brian Solis wrote in Business Week yesterday, "too many companies are diving into social media without thinking a project through."

In Brian Solis's new book "Engage" he states that likes "facilitate the sharing of 'the love' in byte-sized actions that reverberate through social networks, resulting in a formidable network effect of movement or diversion.  It is the digital curation of relevant content that binds us contextually." 

True, all true.  And for the things that I happen to be passionate about personally, I'm a big liker and I love getting turned onto other things that my network likes.

But for me, these have yet to be online merchants.  Online merchants are not going to make themselves relevant to me or know what I want if they rely solely on my liking them. 

Brian Solis also mentions in his book that we are "faced with an increasingly thinning state of continuous partial attention (CPA)." What this means for me is that I am already pretty saturated regarding where I am willing to actively participate, even something as small as a like.  I've Yelped, I've posted reviews on Amazon, but I am increasingly less motivated to do so.  So what does this mean for online merchandizers?  Namely one thing-- while engaging with people on Social Media and offering opportunities like reviews and ratings is a wonderful thing to do,  don't leave out the lurkers and the window shoppers. 

Measure engagement with everyone. Adapt your online experience to suit the current needs of everyone, likers and non-likers alike.

Guest blog post by Bev Hutney, Director of Innovation and Research for The Stelter Company.

I’m in the business of convincing people to leave large amounts of money to charity—specifically, after their deaths. Money and death—two anxiety-provoking and private topics combined into one! It’s no surprise that our industry struggles to motivate people to think about making these “planned gifts”, which, unlike cash donations, are typically made from assets in a person’s estate and come to fruition after the giver’s passing.

The Stelter Company syndicates planned giving content to more than 1,200 charity websites nationwide. We’ve spent years trying to veil the drier aspects of our topic—estate taxes, trusts, and primarily death—in charming packages in an attempt to make them more palatable to the reader. Until now.

After implementing Baynote’s content recommendations across our sites in early 2009 (here’s an example), we’ve found evidence that donors might have a greater ability to swallow the tough stuff, minus a chaser, than we realized. The data has provided new insights into the minds of potential donors and is helping reshape our marketing approach.

Based on 2009 data gathered from millions of online visitors, here is a peek at some of our highest- and lowest-performing planned giving articles, along with the percentage of readers who found the content engaging (the average rating is 33%).

Highly Engaging
• “Prepare Your Estate for 2010 Tax Law Changes” (88%)
• “The Threefold Benefits of a Trust” (87%)
• “Estate Taxes: Keeping Up With the Changes” (50%)

Not-So-Engaging
• “How to Give Gifts Everyone Can Love” (23%)
• “Tips for Discussing Estate Planning With Your Spouse” (20%)
• “The Perfect Present for Mom and Dad” (18%)

We were a bit surprised by readers’ appetites for unapologetic, straightforward content, and also relieved that perhaps our writers needn’t worry so much about trying to cheer up dry topics. Aside from mission-related stories, which outrank all others 10 to 1, readers pay most attention to articles on taxes and trusts. Attempts to oversell or inject charitable giving articles with excess sentiment fall flat. And, by the way, further investigation revealed that any article with the word “spouse” in the title exhibited a below-average usefulness ranking. Hmmm….
Collective Intelligence is allowing The Stelter Company to adapt to donors changing interests and personalize content in real time, resulting in a better customer experience around difficult subject matter.  For more on our story, check out the case study.

We are looking forward to our June 22nd webcast featuring Forrester Analyst and customer experience guru, Ron Rogowski, and CA Technologies' VP of Online Experience, Larry Walker.

Many of you probably read the February 2010 report by Forrester that says websites that don't support customer goals will waste millions, in particular because frustrated site visitors choose more expensive channels or give up entirely.  Seems pretty obvious to us but Forrester has hard numbers to back it up: 75% of consumers surveyed seeking customer service online will turn to another channel when a firm's website lets them down.  ouch.  Complementing that report's findings, Ron's recent report on emotional experience design advocates going beyond a site visitor's immediate needs to address a user's context for coming to the site.

In our live webcast, Ron will talk about how engaging online experiences drive measurable profitability. Ron and Larry will also discuss  site optimization tips to improve sales conversions, reduce support costs, and turn customers into fans.  Best practices they'll discuss include how to:
1.    Help users quickly find the content needed to achieve their goals;
2.    Choose the right channel or medium for the audience; and
3.    Turn user insights into action.

You may have noticed that CA Technologies has recently revamped its entire online experience in conjunction with changing its name from CA, Inc., something they announced at their recent CA World user conference.

Larry will also discuss CA Technologies' strategy around engaging their diverse customers, creating an emotionally and functionally satisfying experience and, of course, how Baynote fits in.  In case you miss the live broadcast, don't worry, we'll send registrants a link to the recording.

I did my catch-up reading (the old fashion physical reading) over this past Memorial Day. One feature article in Time Magazine, on recommendation engines, jumped out at me. Here’s the online version.

Time reporter Lev Grossman correctly points out the laughable issues with the first generation recommendation engines and personalization using collaborative filtering. Just because people bought the iPad and Coke together doesn’t mean the two products are related.

The article hits home on what statisticians and cognitive scientists have known for years:

• There are small lies, damn lies, and then statistics
• Humans are only predictable within a narrow context or topic

Within any large data set, such as internet purchases and behaviors, you can always find two things being connected even when they are just random. There is a fine line between serendipity and randomness. To separate them, you have to know if there is any hidden affinity between the two. The latest cognitive discoveries show that people are animals of context. Relationships among products or content are not determined by who we are as individuals, but rather are biologically "forced" upon us by the contexts in which the products or content are being considered. Across unrelated topics or contexts, people are very unpredictable even you know them well – I've known my wife for years but everything I buy for her seems to be wrong.

However, there is a reliable way to predict people – one that is based on the collective wisdom of like-minded peers. These are not your normal Facebook friends. They are your contextual peers. If you are shopping for a red washer, all of the people in the world who are looking for similar colorful washers should be your implicit contextual "friends" at this moment. Their collective interests under the context of "red washer" can help you short-circuit the content overload on the internet.

Interestingly, the narrower the contexts, the more predictable people become. This brain pattern recognition ability happens to offer us the perfect tool to discover the truly hard-to-find long tail products and content!

Yesterday’s Washington Post article “Why is digital advertising so lousy?” reminds me of my friend’s dog Pipon who peed on the carpet very proudly and repeatedly, even when we kept saying "bad dog".

The post article's author Frederic Filloux correctly identified two reasons for the bad digital ads that is impacting the future of advertising:  #1- poor ad design; #2- badly sold, badly bought.

However there is a big #3-ad relevancy. The digital advertisers still think like the print ad salesmen when it comes to ad targeting. Traditional print ads put little effort on ad relevancy because the print magazines go out to readers in a non real-time fashion. And the ads would stay there for weeks, and even months like a billboard. Ads being contextually relevant to what people were reading was not a requirement. In that old world, brand ads were pretty effective, but not much more than that. For this reason, very few retailers and non-brand manufacturers would place ads in popular media outlets such as Time or BusinessWeek.

However, the digital media has changed how we interact with content. We browse and search on a website or on a mobile device – where our interaction with the content is a two-way street. In this non-static world, readers will not tolerate irrelevancy – much like how we behave in the real-world. If I am having a conversation on French Open Tennis with someone (via the web), showing me a Viking Cooktop in the middle of this is annoying, even I had just spent hours researching a new Viking Cooktop two days ago!

Ads have to Contextually Relevant Right Now. Google Search Ads figured that out and made a company that is worth $150 billion. The media industry must adopt the same principle for display ads, or die.

This week we are happily heading to San Francisco to participate in Lithium Technology’s user conference LiNC.   It seems timely to mention last month we collaborated with Lithium, BT and TSIA for a webinar titled, “The Five Secrets to Delivering Exceptional Customer Service in the Social Age”.  In my mind, the combo is as good as peanut butter and chocolate.

Here is a quick recap of the webcast…the challenge with social customer service and Social CRM initiatives right now is that online forums and service communities can be pretty chaotic and lack discipline and process.  The most useful posts are frequently buried.  The voices that get heard are those of the power users.  Adding Baynote to the mix allows the entire community to implicitly weigh in or “vote” on what content is most useful. 

John Ragsdale from TSIA provided insight into the current state of customer service, and how social elements of customer service are beginning to play an integral role within a company’s overall services strategy. For more info, check out John’s Blog.

Brooke Molinaroli, head of Digital Care Design at BT’s Retail Customer Service Group provided some excellent examples of how BT is making social technologies work in an organized and very effective way. BT has launched a number of social channels to improve their customer service, including @BTCare on Twitter, a YouTube channel dedicated to answering the most commonly asked questions, BT Community Forums, and BT.com/help with live chats and a mobile application.

Based on BT’s success with these initiatives, here are Brooke’s tips:

1)    It’s about real service delivered by real service teams. Twitter is a perfect example of providing end-to-end service to resolve all queries with live interactions with consumers via Twitter. Consumers have reacted very well to the customer service team on Twitter, and BT has recorded over 525 positive comments from people thanking the @BTCare team for their help.
2)    Proactively contact customers. This goes a long way in having happy customers and creating the human relationships that people are looking for in customer service.
3)    Take a personal and modern approach. BT revamped the style of their call center so it is more modern and straightforward rather than formal. They also created a YouTube channel that is not corporate and includes videos from the company’s real customer service team.
4)    Don’t overthink it; Set some goals and go. BT assessed their situation, and once they set their goals, they moved forward quickly to publically demonstrate excellent service. In fact, BT launched @BTCare in 10 days with great success!
5)    Create a cross-functional team that works together. PR, service, Products, Legal and Marketing should work like a real-time network to allow the program to be more transparent and nimble.

If you are up at LiNC this week, please come find our folks on Friday at the Partner Fusion Lounge

The Bikes not Binkies reference is something I thought of as I was monitoring the great Twitter conversation during yesterday's very successful AMA webcast on Personalization featuring our head of marketing, Carlos Carvajal. 

First generation personalization systems relied very heavily on a user's past behavior or tried to box them into a particular category.  For me, this box, is always whatever I was last buying my kids.  So while my 3 and 4 year old are ready for bikes, some sites, which will go un-named, are still trying to sell me binkies, in otherwords baby stuff.

Personalization is really a strategy, not a technology.  It's a component of a broader customer experience optimization strategy.  A personalized site is a site that works for the person who visits, i.e. different for me in my context of "mom of toddlers" than for my context "daughter needing to buy mother's day present."

There were so many nuggets that people pulled from the webcast and posted on Twitter, frankly some of these were so cogent, you might see them pop up in other Baynote material.  Sometimes being limited to 140 characters is a really good thing.  Ok, here is what some people tweeted:

"Personalized landing pages are a simple & effective way to get started with online personalization based on context & intent" 

I just caught Kara Swisher’s post, in which she calls on all geeks to replace “real-time” Web with “right-time” Web. Right on, Kara.

Okay, so Venrock’s David Pakman should get some credit too, since Kara heard the term from him first at the Twitter Chirp conference earlier this week.  According to her post, Pakman thinks the ‘right-time’ Web is more valuable in some cases than the real-time Web:

“Real-time data is only interesting when I’m actually looking for that information. There’s no service today that’s giving information when it’s really needed. If your company is doing that…I brought my checkbook.”

Kara was a little less diplomatic about the real-time Web buzz frenzy that’s happening right now:

“One of the key issues being raised of late about making all these status update data streams helpful is that they are super-useless 98 percent of the time, resembling a raging flooded river more than a way to navigate to any place that is actually useful. Someone does have to significantly drop the signal-to-noise ratio on all this blather, cutting through to find the really valuable information we all know has to be there.”

Within the context of personalization, including crowd-sourced product recommendations and social search, “right-time” is far more meaningful than the “real-time” moniker. If I’m on the Web, I don’t want to get flooded with content just because it happens to be available in real-time. I want to get connected to the “right” information, in the instance I set my sights on it. Not seconds later.

The explosion of available content and products online has undeniably fueled this culture of immediacy. This has had profound implications for businesses, who are increasingly struggling to deliver on a new standard in customer expectations that’s all about instant gratification. As the so-called real-time Web matures, the online businesses that will prevail are going to be those that can effectively leverage this real-time culture to their benefit, meeting and exceeding customer expectations as they evolve by focusing on serving the right Web, at the right time.

We’re focused on making this a reality by enabling companies to tap into the collective intelligence of their website visitors. Although most of the real-time Web buzz continues to focus on gathering and making sense of user generated feedback captured in Twitter and Facebook, you can’t possibly observe the Web merely by looking at it or reading it. This is because the majority of what happens on the Web is never written, never rated, never reviewed. It’s told through behavior patterns in the form of online comparison shopping, bookmarking, mouse scrolls and hovers to name a few.

By mining for real-time explicit data and right-time implicit behavior patterns, companies can deliver their Website visitors a customer experience a league above the rest.

In case you don’t know Bluefly, it is one of the hottest places to shop online for designer fashion. Bluefly was featured last week in the National Retail Federation’s magazine STORES. The article was titled “Power of the People: Collective intelligence translates into increased sales for Bluefly.com.”

The article described having Baynote Recommendations on your site as like having a “retail floor teeming with hundreds of associates.” You know, the helpful and knowledgeable kind, the ones who can show you exactly what you are looking for.

Marty Keane, the company’s senior vice president of e-commerce, talks about how they achieved 300% lift in sales by harnessing the wisdom of all Bluefly visitors. One cool angle on the Bluefly story is that, as a customer with a rapidly changing inventory, it was imperative that their recommendation system have no lag. Because Baynote recommendations are based on the preferences of all site visitors, not just purchasers, Bluefly’s “most wanted” recommendations on new arrival product pages keep pace with the changing inventory.

This week, Forrester CEO George Colony introduced an idea that resonated with me and that idea was Social Sigma. I’ve never really understood 6 Sigma- it just made me want to get a 7 Sigma, but this idea made sense.  In a nutshell, Colony said that he frequently hears other CEOs asking “How can we use social to make money?”   There are three elements to his Social Sigma concept:

Listening: More and more companies are adopting the “@ComcastCares” approach to using social technologies as a means of listening to customers and resolving complaints.  The problem is that these interactions  don’t translate to actionable information and “valuable Social Sigma data ends up on the cutting room floor before it ever reaches product managers or R&D staff that could use it.”

Soliciting feedback: This is taking the concept one step further and actually explicitly asking for input through social channels.

Marketing:  Closing the loop and making sure everyone knows the company is listening to feedback and adapting accordingly.

Colony  goes on to say that since you’re initiating a continuous, real-time, rapid exchange with hundreds or perhaps thousands of customers, CEOs need to have the guts guts to pursue this social strategy and stick to it.

George’s Social Sigma concept aligns nicely with Sucharita Mulpuru’s recent report on Social Commerce where she calls out social recommendations as one of the top social marketing strategies being pursued.  Why?  Because it is easy to draw a straight line to the bottom line.

Back to SocialSigma and some of the underlying drivers.  We’ve heard from several analysts, customers and prospects that “going social” is largely driven by expectations created by their personal interactions with social media, even for B2B.  Scary!  Without adding teams of communicators, there have to be other ways that companies can innovate and become more adaptive.  We think that Baynote’s technology is one of those ways.  It turns your website into a real-time “listening” device.  And because it adapts the search, navigation and recommendation experience in real time, it also accomplishes some degrees of feedback solicitation.  It can create the specific website or email experience that people want to experience.

Why do you care?  Because this social technology makes you money by selling more. It makes you money instead of your competitors because they find good stuff on your site or save you money because they find answers on your site and don’t tie up your call center.

Last week I had the opportunity to deliver a keynote at eTail West in Palm Desert where I spoke to retailers about how they can maximize revenues by using the collective intelligence of their Web site visitors to personalize the customer experience in real-time. I chose this session topic because increasingly, brands are struggling to adapt and personalize the online shopping experience to their customers’ evolving needs. Retailers need real-time customer insight and the ability to respond automatically with a more personalized online experience that mimics the experience they get when walking into a local hardware store or clothing boutique. This creates happier, more loyal customers, and ultimately increases profits.

After attending the event for four years, I’ve had the opportunity to see first-hand how the market has shifted over time. The discussions at eTail West in the earlier years were primarily about how to manage, measure, and increase transactions. But most retailers have this figured out by now, so their focus has shifted to maximizing their revenues in new ways.

Naturally as the market has matured, retailers have grown to be more concerned with customer experience and service, so it’s no wonder that the three consistent themes at this year’s event were multi-channel customer experience, personalization, and recommendations. Online retailers are looking for new ways to increase their revenues and to achieve better personalization and customer targeting. They are also looking for new ways to maximize revenues by deploying the recommendations they already have in place in a much broader sense. Now that retailers have reaped the benefits of traditional product recommendations, they understand the capabilities these technologies have to tackle the newer issues, such as navigating social elements of their sites and the ongoing quest to improve search.

Just as the market has matured, so has Baynote. Each year at eTail, we’ve seen interest in our approach grow. Listening to the conversations of the attendees and the other speakers this past week, it was clear to me that Baynote’s time has come as retailers hone in on providing a superior customer experience and ultimately how to create happier, more loyal customers.

Perhaps the best evidence of this was a survey I conducted during my presentation. I asked the crowd: “Raise your hand if you think your best salesperson can outsell your best customer?” The result? Not a single person in the room raised their hands. When I asked another question: if the happiest customers are the most important to increasing their revenues; almost every single person in the room agreed. This demonstrates just how powerful peer-to-peer brand advocacy has become to retailers and the bottom line.

I left Palm Desert thinking about what an exciting time it is to be involved in the e-commerce industry, and how proud I am that Baynote’s customers are setting the standard with more sophisticated personalization approaches that are transforming the customer experience as well as their online businesses.

Forrester published an interesting report this week, called “The Online Customer Engagement Software Ecosystem”.

As the title suggests, Forrester believes that information and knowledge management professionals who deal with public websites need to use a mix of different technologies from an ecosystem of providers – no single platform will meet all of their needs.

According to the report’s authors, Stephen Powers, Matthew Brown and Peter Schmidt, the shaky economy has increased pressure on companies to engage customers more efficiently online. We agree that websites offer unmatchable economies of scale when it comes to interacting with customers, enabling better lead generation, increasing engagement, conversions and customer retention rates.

What the report doesn’t say is that the emergence of the real-time Web has also accelerated the need for technologies that can dynamically personalize the online experience and keep pace with rising consumer expectations for instant gratification. We believe this trend will be an even bigger catalyst for investing in these technologies in the months and years to come.

Forrester sees investments rising too:

“Our most recent data suggests this trend will continue into the next year. Consider that in 2010, 51% of organizations plan content management implementations, more than one-third will implement or upgrade customer relationship management tools, and one in four is planning marketing automation software investments.”

While investments in online customer experience technologies are on the rise, Forrester notes that time-to-market for site changes, campaigns, and customer experiences have suffered. According to their client inquiries, “disjointed technology has become a prime factor behind time-to-market issues and the ability to achieve improved online processes.”

If companies can’t rely exclusively on WCM or enterprise marketing suites to support online customer engagement, then what does the bigger ecosystem look like?

Forrester puts several players, including Baynote, into three categories:

Content management vendors include traditional WCM players like SDL, Tridion, Autonomy as well as ECM vendors that offer the fundamentals, plus interactive delivery.

Enterprise marketing vendors include Alterian, Aprimo, Omniture, and Unica, who mainly support campaign management.

New breed engagement vendors, such as Baynote, Backbase and Kapow Technologies, support next-generation Websites.

According to the report, new breed engagement vendors fill important gaps in the overall ecosystem and will be critical pieces of next-generation, more personalized and adaptive websites in the future. We couldn’t agree more.