Amazon.com is Watching You: How Real-time Data Mining Can Improve Your Customer Conversion Rate

Online marketing has never been a fair game for small and medium sized companies. The biggest missing piece is not how much money they can spend on a marketing campaign, but the science behind the big corporations' high customer conversion and retention rate: real time or back-end analysis, the basis of enterprise relationship management systems (ERM).

But, what in the world is all this technical stuff, and what can it do for us?

Online marketing has never been a fair game for small and medium sized companies. The biggest missing piece is not how much money they can spend on a marketing campaign, but the science behind the big corporations' high customer conversion and retention rate: real time or back-end analysis, the basis of enterprise relationship management systems (ERM).

But, what in the world is all this technical stuff, and what can it do for us?

Think for a moment. When you visited amazon.com last time, do you remember that there were a number of recommendations and offers for every page you visited? This is called real-time personalization in online marketing. Just like amazon.com, a lot of companies have their websites connected to a powerful real-time data-mining server, which learns from the present and past behaviors of you and all the other customers. Such analysis will reveal a profile of people who are more likely to buy a certain product.

A simple offer can be just to upsell a related stock technical analysis book to a customer who fits the following criteria:

• Marital status: Single
• Age: 25 to 33
• Income: 35,000 to 45,000
• Occupation: Financial Analyst
• Previous buying history: book A, book B, book C, ...
• Click stream (what did they click on in the past and today?): the site visitor has clicked on more than five related books with similar popularity

Let's assume that, according to real-time data mining, the real-time campaign server found out you meet this profile. The web site will respond with an offer, which could be something like this:

Offer A: "ABC Stock Analysis" and
"One Up on the Wall Street" by Peter Lynch for $25.95

Now that you know about the secret of Amazon.com, as well as the other big corporations, what can you do to improve our odds in converting customers in your online business?

Here is one simple thing you can do: forget about all the hype about Search Engine Optimization (SEO) and put an equal amount of time into analyzing your targeted customers.

Remember the fact that our goal is to identify our customers, attract our customers, convert our customers, and maintain our customers. It will be useless for your site to be flooded with ten thousand visitors a day if you cannot convert any of them to be your customers because they do not fit the buying profile of your product.