Last Updated May 2, 2007 7:22 PM EDT
If your business has a Web site, you can collect very useful data on consumers—either directly, by asking them for information, or indirectly, by analyzing their behavior while on your site. If you treat consumers fairly, respect their privacy, and analyze the resulting data properly, you can use your findings to make significant improvements in your business returns.
The Internet has lacked a common and comprehensive legal infrastructure, which has opened the door to consumer information being gathered surreptitiously and sold to third parties without consumers' knowledge. This behavior has led to a consumer backlash, with privacy becoming a key concern among those who use the Internet.
Getting to know your consumer means that you are better able to offer products and services that are more in tune with his or her needs. With more and more products becoming increasingly similar in their physical makeup, competitive advantage is achieved through finding out exactly what the consumer wants and meeting those needs precisely.
A Web site is not like a bricks-and-mortar store, where a manager can walk around and observe what is happening. If, for example, people are leaving the store because of long checkout lines, this will quickly become obvious. People may be dropping out in the middle of a purchase on a Web site, but unless proper data are being analyzed, no one will know.
Web site logs, also called server logs, track activity on a Web site. For an average Web site, log software is fairly inexpensive and simple to install. For larger Web sites, it is more expensive and complex. Some Web site logs can identify who exactly has visited the site, but most collect more general information:
- total number of visits to the site during a defined period
- visitor frequency (the number of people who visited only once during the period, called unique visitors, and the number who visited more than once)
- page impressions/views (total numbers of complete pages visited during the period, a key measure for advertisers)
- most frequently visited pages
- hits. Although many people tout the number of hits on their Web sites, hits are an unreliable measure. Some web pages have as many as 20 components of graphics and text. Each time the visitor stops on one of these components is counted as a "hit," so the total number of hits often bears little relation to actual visitor activity.
Web site logs can deliver a mind-numbing array of data that quickly becomes tedious to wade through. It's important to isolate the key measures that really show how the Web site is performing.
Consumers may be willing to fill out forms on your Web site, if you follow these guidelines:
- Keep it short! If you make the form too long, consumers will simply not fill it out, or will skip over large sections of it.
- If forms have to be long, break them up into sections. However, inform the person clearly of how many sections there are in the form.
- Clearly mark fields, such as email addresses, that consumers must complete for their form to be counted. The convention is to mark the text associated with these fields in red and/or to place a red asterisk beside the field. Put a clear explanation at the top of the form.
- Don't require information a consumer can't give. Offer an alternative, for example: "If you don't have a ZIP code, please write 'None.'"
- Ask opinion-type questions before you ask for personal information. People tend to be more open to giving their opinions and will be more comfortable when you ask for personal data later.
- Politely point out errors. Everyone makes mistakes, particularly when they are filling out long forms. Never say, "There's an error in your form. Go back and fill it out correctly." Rather say, "It seems you have not filled out your email address. Please fill it out here." Alternatively, highlight the field that needs to be completed in another color, to make it obvious.
- Make sure the fields are large enough for the information requested (for example, long street addresses).
- Make sure the form is accessible to all. Offer an alternative approach for people with disabilities, such as color blindness.
- Test forms regularly to ensure that they work properly.
People have become rightly uneasy about the abuse of personal information on the Internet. To assuage fears:
- Clearly tell people why information is being collected and how it will be used
- Never use information in a way that was not originally intended
- Allow consumers to find out what information has been collected on them
- Allow them to delete any or all of this information if they desire
- Publish a comprehensive privacy statement in a prominent position on the Web site.
Hackers—people who break into computer systems—favor consumer databases because they may get access to credit card information. Also, hackers know that theft of consumer databases will be damaging and embarrassing to the organization. You must ensure that consumer data you collect is protected from hacking.
If you collect data on children, make sure you understand the relevant national laws and international standards for children's privacy rights.
Web bugs are an alternative technology for tracking Web site usage, but they are designed to avoid detection by standard browsers, although there is special software that can detect them. Because web bugs are used surreptitiously, they have fueled the belief that people's privacy rights are constantly abused on the Internet.
People have become very wary about their privacy on the Internet. Too many Web sites have collected data on consumers without them knowing. This may produce short-term benefit for the company but leads to an inevitable backlash.
Software today can deliver seas of data, and Web sites with large numbers of visitors can easily get flooded. Analyzing all this data takes time, and time can be wasted on analyzing data that doesn't offer any business insight. Make sure you collect and analyze data that will reveal how to improve your business.
Grossnickle, Joshua, and Oliver Raskin.
Monster, Robert, and Raymond C. Pettit.
American Federal Trade Commission Privacy Initiatives: www.ftc.gov/privacy
Web Accessibility Initiative: www.w3.org/WAI
Web Analytics Association: www.webanalyticsassociation.org