The acquisition will add more than 300 products to L’Oreal’s lineup.
Web analytics’ tempting new goodies
At an estimated $292 million of an enormous software market estimated at $144 billion worldwide by Forrester Research Inc., the web analytics market in online retail circles is the mouse that roared. With the ability to diagnose customer experience problems on the site itself, quantify the success of campaigns launched into the web universe and do it in increasingly graphic formats, web analytics have grabbed marketers` attention and spawned a fiercely competitive field that now numbers an estimated 80 vendors.
All that competition has analytics vendors jockeying for position with varying product claims, pricing and service offerings. And that leaves many retailers with a challenge: how to make sense of competing--and tempting--offers.
Not much longevity
In a market that`s still young, there are few lengthy track records or 20-year relationships between customers and vendors. Though some web analytics vendors claim renewal rates of 90% and even 99%, the life expectancy of a web analytics vendor with a particular customer currently averages about 24 to 30 months, estimates Forrester Research analyst Bob Chatham, about the same customer tenure as in another hotly competitive market: credit cards.
In its relatively short experience with web analytics technology, the average company already has purchased an average 1.8 analytics packages and reviewed 2.6 vendors. For some retailers, that number is much higher--in its five years of operation, online jeweler Ice.com, for example, has used four different web analytics packages.
Whether looking to make a switch or get on board with analytics for the first time, industry consultants--and retailers who`ve already been down that road--find asking the right questions at the start of the process is key. They say knowing exactly what functionality they want, what functionality they will actually use, establishing with certainty whether it`s possible to get it from the current vendor, and being able to accurately establish from complex pricing models what the package will cost over time goes a long way toward making the difference between buying a solution that works--or just buying more aggravation.
"When clients ask me for a recommendation on an analytics vendor, the first thing I ask them is why they are thinking about switching," says Jupiter Research analyst Eric Peterson. When Peterson finds the reason is that someone on the team has seen a new demo or read about a new product, that signals that the company might be overlooking capacity already available but going unused in the current analytics package. The web team may not be using the most current version of the software it already has, he adds--or it may have truly reached the upper limits of the capabilities of what it has.
A real need to graduate may constitute a reason to switch, but it`s still advisable to proceed with caution. For with some exceptions, "None of these applications is really that different from another. It`s about how you use them," Peterson says. "If you are using a vendor`s current version, and they haven`t lost your data or billed you incorrectly, and they return your phone calls and make an effort to work with you, the vendor you know is almost always better than the vendor you don`t know."
If a switch is still in the cards, the next step is to assemble an RFP. In an effort to anticipate what they may want in the future as well as the upgrades they`ll use immediately, some marketers have loaded up RFPs to what Peterson terms "ridiculous" proportions. A better solution is to come up with 15-30 measures the company uses or would use to run its business, then divide that list into must-haves and nice-to-haves. A third list holds every analytics capacity the retailer ever wanted. Prospective analytics providers see the needs list, the wants list and the dream list, and they get a chance to respond. "That`s not an extensive RFP; it`s a reasonable list of what the company actually will use," says Peterson.
Restaurant and consumer kitchen supply company AceMart.com followed a similar process when it decided to switch to Coremetrics Inc. last year. Under its previous vendor of a year and a half, key data were split between two repositories. That made it difficult to tie together for the view Ace Mart wanted. "We`d gotten into analytics with the idea of seeing what people were doing on the pages. That quickly evolved into needing to know exactly what was going on with our marketing campaigns," says Ryan Rodkey, Ace Mart`s webmaster. "But you couldn`t get a quick picture of your revenue and how it tied all the way back to visitors` interaction on the site."
Ace Mart came up with a short list of the analytics capacities it wanted and would immediately use. Its first requirement was to track campaigns at the keyword level; its second was to look at session level data by visitors so it could find out who was visiting its site and direct its marketing efforts accordingly.
It got both, and more, by going with Coremetrics, but it also lost 18 months` worth of historical data in switching from one vendor to another. "It`s two different systems, so I guess we knew we`d lose it, but it wasn`t something we`d really thought about when choosing an analytics provider," Rodkey says. "Losing the data we`d had before wasn`t that bad for us, because we hadn`t been getting the answers we needed out of the previous tool anyway. But if we had to switch now, it would be different."
Forrester`s Chatham says the loss of data when switching analytics vendors isn`t uncommon. "I always ask companies how wedded they are to having historical results, because they may not be taking them with them," he says. "The comparability of data across vendors is zero. You are never going to get the same count out of one vendor that you will out of another. There is a whole recalibration process that has to take place."