When the Internet investment bubble burst in 2000, the new mantra for technology purchases was “ROI.” Three years later, that has not changed and, in fact, may be even more important now that retail executives have a greater understanding of what technology can do, speakers at Keynote Systems Inc.’s Global Internet Performance Conference in New York said yesterday.
“When I go to senior management and talk about technology and discuss the performance nitty-gritty aspects, it doesn’t get a lot of interest,” Phil Obbard, manager of Internet technology for diet company Slim-Fast Foods Co. “But if I say I can separate the men shoppers from the women shoppers or say what the under-18 crowd is doing, it gets me a lot of interest.”
To achieve true ROI, companies must map out their goals before they make technology investments, Rebecca Gaspar, editor of Palm Inc.’s Palmone.com, said.. “The key to ROI is planning,” she said. “What will you define as success? What metrics will you track?” she said. Further, goals must be set in such a way that the results are clear. “You must make the metrics uniquely identifiable,” she said.
On that basis, Palmone.com set out to improve its site search capability, with a goal being to present more relevant information to shoppers and increase conversions. Previously, Gaspar said, a customer searching the site for Palm Pilot wouldn’t necessarily get the most up-to-date product presentation. Instead, the shopper might get old owners’ guides or other information not related to shopping. An upgrade of search, with a clear understanding of whether it achieved goals, was worth the investment, Gaspar said. “We achieved a 100% ROI in 30 days,” she told her audience.
When measuring results, be ready for the unexpected, other members of the panel with Obbard and Gaspar said. That’s all the more reason for objectives to be spelled out clearly and a baseline established before changes are made. “A small percent reduction in calls to a call center can results in millions of dollars of savings monthly,” said Ben Hansen, head of usability for Sun Microsystems Inc. Added Chris Cheney, e-business program manager for Cisco Systems Inc., “Sometimes you can’t believe it yourself. It seems unfathomable that you could achieve ROI that fast.”
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