MM: Right. In the analytics space, it seems to me that there’s a quadrant. Basically, you’ve got log analyzers and then you’ve got tag-based solutions. They’re tagging specific pages or applications. Then you’ve got hosted SaaS solutions and maybe hybrid or traditional software. Traditional, on-premise software, with maybe a SaaS back-end or something. Can you take us through the thinking—the strengths and weaknesses of those approaches?

BK: In my opinion it all comes down to the customers needs. The first questions a company needs to answer include: what information do I need to capture and report on, and why? Depending on the size, sophistication and importance of a companies web infrastructure they will define the investment they’re willing to make in technology and the manpower to implement web analytics.

Obviously log-file analysis is less expensive to purchase, implement and support. But the data set is less robust and may not answer all the open questions to improve on-line interactions.

Page-tagging solutions are more expensive primarily due to the time and knowledge required to properly implement them, but the data is much more robust and should provide answers to most of the previously mentioned marketing questions.

The decision for software (on-premise) or SaaS (hosted) largely comes down to a couple of questions the customer has to address around security, data access and integration, and the resources to support the solution. In my experience most companies today are finding ways to outsource every IT solution they can.

MM: Sure. So aside from regulated industries—be it healthcare or finance, the trend, if I understand you, will continue to accelerate more toward a SaaS and/or a hybrid SaaS.

BK: Well, that would be my assumption from conversations with IT directors. I hear constantly that Service Level Agreements (SLAs) are being increased and budgets are being slashed. IT has to evaluate what is a core competency or competitive advantage and keep those in-house. All else can probably be handled less expensively out-of-house.

MM: You know, Bob, this might be a good time just to do a quick sidebar on web analytics. Where it’s been; where it is now; and, where it’s going to be. Who are the firms that are the innovation leaders?

BK: Well, I’m not qualified to speak to whom the innovation leaders are but I can certainly offer my perspective of where web analytics is today. The market leaders include Coremetrics, Omniture, Unica and WebTrends. These companies have somewhat similar offerings if you’re just looking a core data collection, analysis and reporting for web traffic but each has unique strengths that largely go beyond this core functionality.

I would be remiss if I didn’t also mention the great strides Google continues to make in web analytics. Their solution continues to mature and as far as I know they continue to offer significant functionality for free.

Historically web analytics was an IT tool for reporting on baseline site statistics – numbers of visitors, numbers of pages viewed, data usage volumes, etc. Today marketing tends to be the primary consumer of web analytic data and they’re more interested in campaign reporting, keyword and affiliate leads, content consumption and click-path analysis, and conversion funnel reporting.

But web analytics is no longer a stand-alone solution. Rather, and as previously mentioned, this is one of many data sets used to assess the success of attracting and effectively serving web visitors.

MM: I would guess, Bob, that it only compounds and manifests when we start talking about “composite applications.” That is, customer-facing dashboard or cockpits that are syndicating in several dozen different applications from a dozen different systems of record.

BK: Sure. Absolutely.

MM: So the composite applications basically make it even more difficult to understand any one particular session and what precipitated someone bouncing out or abandoning the session.

BK: As mentioned the feedback from visitors tends to be inadequate to understanding the problem and being able to recreate it. With session playback the customer has all the in-bound and out-bound information so they can fully research what has occurred and what did not perform effectively.

Another powerful capability of Tealeaf allows call center agents to replay sessions in real-time meaning when the visitor calls in you can pull up their session and see what they saw. This adds visualization to the discussion and allows the call center to better communicate the findings to the web team.

MM: It would seem to me that the examples you’ve used so far have really been transaction-intensive.

BK: Only because they’re familiar I think to every one of us.

MM: Sure. Then there’s the adjacent, which is getting someone to consider buying something. So what articles, what Blog posts, most induced someone to step forward and opt into the newsletter or download the white paper or whatever. There’s all that kind of presale activity that for the most part goes on unmonitored. This gets into the larger area of what I’ll call content analysis as opposed to transaction analysis. Right?

BK: That’s a great transition to the other half. I said a minute ago that this break-fix analysis of problems is half of what CEM is about. The other half is behavioral analysis. It’s proactively analyzing what brought visitors to your site; what they wanted to do; what they did; and, how you can make your site better at serving visitor needs.

Web analytic solutions collect a huge amount of data defining what campaign, keyword or affiliate directed a visitor to your site. Further this data can show you click-path and conversion funnel analysis allowing web marketers to understand past behavior.

In conjunction with web analytics companies are using A/B and multivariate testing solutions to serve, test and evaluate the effectiveness of various content on driving desired behavior. As well, many companies are using voice-of-the-customer systems to garner direct feedback from their on-line visitors.

All these solutions feed into a CEM model for those organizations that want to improve the experience their customers have with them as a company. As you know this leads to great brand loyalty and even affinity where our customers lead others to us for service.

MM: Right. In fact, I report in our Blog of Your Google Strategy — how one particular marketing executive tested almost 1,025 unique combinations of, “Did it have a picture, did it have a quote, and did the quote come from a customer or an analyst?”

He was able to deduce over the course of 4 or 5 weeks the optimum configuration of content, price, quotations, pictures and so on. He got almost a 10% lift as a function of just optimizing the presentation of the content with real customers.

BK: That’s fantastic feedback!

MM: In the IT service management area they refer to that commonly as, “problem determination” —with a specific goal of root cause analysis—what actually precipitated that as an event or a disruption. So in many respects, without the data, you really can’t do any problem determination. Nor can you identify the root cause for this very significant abandonment rate.

BK: That’s absolutely true, Michael. But it’s maybe even larger than that. Again, if we’ve only got a small percentage of users that take the time to give me notification or send me an email or respond to a survey or pick up the phone and call my call center, the question is, “How big is the problem?”

We’ve heard from some of our internet system management folks that they can come in one morning and they’ve got green lights across the board on their IT infrastructure. All the servers are up and running. Performance is great. There’s no lag time. The applications are all interacting appropriately. All green lights! All good!

But the phones ring and the e-mails are coming in from the marketing department or call center that, “Hey. We’ve got problems on the website.”

The next day, they can come in and there are no e-mails or calls from marketing or from the call centers. Everything seems to be great. They look at the board and the IT systems are red lights. There are things that aren’t talking to each other. Servers are down.

So where’s the breakdown? Where’s the disparity here?

We’ve been told specifically by our customers that having Tealeaf, and being able to either troubleshoot those calls that are coming—those feedback mechanisms from the call centers—from marketing—et cetera… or having the mechanisms to look at systems from the IT perspective is imperative to fixing whatever’s broken. That’s probably half the game.

MM: Bob, would you explain how innovative companies today use technology to manage online customer experience?

BK: Absolutely. Today companies find more and more of their customer interactions on-line. Whether B2C or B2B, most of us see a great opportunity to attract, serve and interact with online customers in a brand consistent and cost-effective way.

The biggest challenge companies face in these on-line interactions is ensuring satisfaction, answering the question such as “Did the visitor find your site and the appropriate page in your site using the search terms or affiliates desired?” Once on your site did visitors successfully “convert”? This might be a sale, a self-service activity, conducting research, or any number of varied interactions.

For years companies have been buying technology and creating process around Customer Relationship Management (CRM).

A lot of in the industry talk about Customer Experience Management (CEM) as the next generation of that same practice. However, I disagree; CEM entails a completely new practice.

To me, CRM focuses on internal issues: How do we as a company collect and leverage customer information to our benefit? CRM provides great insight into customer behavior, marketing effectiveness, buyer demographics, etc., allowing our company to better tailor our products, services and go-to-market strategies—all good and valuable.

By contrast, CEM focused on external issues and opportunities. With CEM technology and processes your company takes the customer’s perspective of your products, services, people, partners, etc. CEM in the on-line world emphasizes how customers choose to interact with your company and whether or now you successfully served the customer—a very different set of issues than CRM.

In my previous position, I worked for Tealeaf in providing a software solution for CEM. We exploited the insight supported by Forrester Research data indicating that 91% of executives’ surveyed view CEM as very important and even critical to success in 2008 and beyond.

We gave companies a means to replay web visitor interactions, enabling web property managers to rapidly resolve on-line issues and assess behaviors that will help them improve their on-line environments. Having the ability to watch every customer on your site provides unique insight otherwise not available.

MM: Can you give me a specific example?

BK: Sure. Let’s say you run the new credit card customer department in a bank. You develop web pages optimized to attract on-line shoppers for a new credit card and the subsequent pages to capture these visitor’s applications and to provide approvals. Part of the site logic might be an up-sell procedure after the visitor has provided income feedback.

During development the designers instituted logic that would offer someone with a six-figure income a platinum card if it weren’t their original selection. While the code for this application was tested prior to launch the designers never considered an applicant for a base line card would have the income to qualify for this platinum offering.

After the site launches you begin to get multiple calls to your call center from customers unable to complete the application process. By replaying these callers’ sessions you quickly see the up-grade offer is not executing properly and with a view of all visitors who failed to complete this process you find many more visitors than the few who call the call center.

This example is in line with a recent Harris Interactive poll that found 9-out-of-10 web users have experienced problems. Of these, 41% immediately abandon the site where they had the problem. Of those remaining only 47% will contact the company to report their problem and close to half of these will not get resolution.

MM: So from a baseline of 100%, we’re down into the low 20s or high teens.

BK: That’s sounds right! But companies using Tealeaf have an opportunity to improve their understanding of these problems and the scope beyond what might be only a few calls to customer service. In many cases this insight has saved companies millions of dollars and has provided an opportunity to re-engage otherwise dissatisfied customers.

MM: For the most part, Bob, most companies that are not taking a second-by-second movie of a session … these companies have no idea why somebody took off.

BK: That’s right! Without this insight several things happen. Customers who do contact the company are asked to help diagnose the problem. Often the customer’s feedback is not sufficient to help the company find a specific issue. Hundreds of man-hours can be spent trying to recreate a problem. And even when found and resolved the scope of the impact and those visitors affected can’t be determined.

With more than 25-years of sales and customer consultation experience in high technology and Internet market segments, Bob Kennedy is currently a Regional Sales Director for Tealeaf Technology and a Board of Directors member for the Atlanta Interactive Marketing Association. For the past 12-years, Bob has held positions with leading enterprise software companies providing solutions for online marketing and customer management, including Covario (formerly SEMDirector), WebTrends, SAS, and Art Technology Group. Bob has a broad network of professional associates managing some of the largest online brands in the world and working for many of the leading marketing agencies. He is frequently consulted on trends, emerging technologies, and methods to increase customer success and satisfaction.

MM: We’re here with Bob Kennedy—Sales Director for iPerceptions. Bob, let’s start off with a little bit of your background and where you are now, with the idea that it will really provide a context for sharing some of your insights about customer experience management, web marketing & IT trends and some of the related industry consolidations.

BK: Thanks Michael! It’s great to speak with you today. To begin, I’m presently employed as a Regional Sales Director with Tealeaf Technology. Just briefly, Tealeaf is the industry leader in Customer Experience Management software solutions.

As well, I’m presently a member of the Board of Directors for the Atlanta Interactive Marketing Association. In particular, I chair the Web Analytics Special Interest Group. That provides a fantastic opportunity to interact with 70-plus industry leaders and web analytics professionals in the Atlanta marketplace; and, to keep my finger on the pulse of trends in web analytics and interactive marketing.

Prior to Tealeaf, I worked with Covario, an industry leader in solutions and services for on-line marketing analytics. Specifically, Covario provides a unique technology for auditing and interacting with SEO, SEM, Competitive and Channel “campaigns” utilized to drive visitors to a company’s web sites.

MM: Bob, as I recall—one of the larger users of Covario is Intel. They manage an inventory of some 50,000 to 60,000 keywords across 15 languages. They create more of a dynamic marketplace around those 50,000 to 60,000 keywords. They use measurable traction behavior in any particular market as a way of subsequently buying into that keyword, and provisioning it in or out. Is that a fair summarization?

BK: Like many of enterprise and global companies, Intel does manage thousands of keywords, on multiple search engines, in multiple languages, around the world. As well, this size organization will typically have multiple agencies serving them in various markets geographically and vertically.

The challenge for these organizations is large and includes: accurate reporting of campaign spend and effectiveness; elimination of internal competition; brand consistency; global and local competitive planning; and, strategic as well as tactical visibility.

MM: Great! And prior to Covario?

BK: Prior to Covario, I spent worked with WebTrends a leading provider of web analytics and consumer-centric marketing intelligence solutions. And prior to WebTrends I spent several years with SAS Institute a leader in business intelligence and predictive analysis solutions. I also spent a couple of years with Art Technology Group selling the web personalization and eCommerce technology.

MM: As I recall, one of the areas we’d worked many years ago was with a company called Inso. They had a couple of software solutions—one of which was a Digital Asset Management (DAM) system by the name of MediaBank.

BK: That’s correct. MediaBank was an early DAM solution primarily used by print / publish organizations.

MM: Also, as I recall, Inso had an XML content repository?

BK: Yes. Inso had a product known as DynaBase that was a very sophisticated XML repository or content management product and it was a powerful XML “dynamic” publishing solution.