Business Intelligence Fresh From the Oven Served Piping Hot

Business Intelligence Fresh From the Oven Served Piping Hot
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Successfully emerging from the dot-com bust, Allrecipes of Seattle has become the world’s number one food and meal planning site, thanks in part to business intelligence provided by Web analytics solution provider, digiMine. ...



Though many dot-coms evaporated like raindrops from a summer shower, new media
still works for some as their business continues to grow. The challenge becomes
how to consolidate the growth and turn visitors into loyal customers. The
questions: Who are these people and what do they want? The answer comes via
business intelligence through data mining/Web analytics.

Home Cooking
Successfully emerging from the dot-com bust, Allrecipes of Seattle, WA has
become the world’s number one food and meal planning site. Since the launch of
their Web sites as allrecipes.com in 1997, Allrecipes offers visitors over 20,
000 free recipes with sponsorship from some of the largest packaged food
companies.

Esmee Williams, vice president of marketing for Allrecipes explains the business
of the dot-com. “We cater to consumers in planning meals from gourmet to home
cooking, all submitted by home cooks. We have millions upon millions of folks
coming onto our Web site each month looking for recipes. In December 2001, our
site had 4.65 million unique visitors.”

With such a gargantuan flow of traffic, tracking the visitors and understanding
their behaviors is akin to doing so with migrating fish in the Pacific Ocean.
Business intelligence comes through what is known as data mining or Web
analytics. Guy Creese, research director, Internet analytics for the Aberdeen
Group of Boston, MA in the June 2002 report, “Web Analytics: Making Business
Sense of Online Behavior,” sums it up: “Web analytics is the monitoring and
reporting of Web site usage so that enterprises can better understand the
complex interactions between Web visitor and Web site offers. The resulting
insight enables enterprises to optimize the site - as well as other online and
offline channels - for increased customer loyalty and sales.”

Essentially, the huge volume of Web data is gathered, stored, and sorted by
analytic reports, as well as a series of questions or equation formulas known as
data mining algorithms. Differentiation develops as does patterns that become
customer affinities and segments. In this way, an enterprise is no longer
boggled by not seeing the forest through the trees. The types of trees with
their respective attributes and characteristics identify the forest.

Stumbles and Grumbles
With limited staff, infrastructure and budget, Allrecipes took an awkward and
futile stab at data mining. As a cost savings, Allrecipes bought a software
package and had only one person dedicated to the task at hand. According to
Williams, “What made it so difficult is that we are actually 27 different sites
that appear to be one to the customer. So that when we went to run the logs, we
have 27 different sets of data to run which make it an impossible task. It would
take a week. By the time it was done, it would have to be started again. So we
were able to run the log files but never extract any data from them. It was sort
of a ridiculous task.”

Subsequently data was gathered with no resulting information of value says
Williams. “There wasn’t much in there that marketing could make much out of. We
knew that sales and marketing needed some data that we weren’t able to process.
We decided to outsource, as running the logs internally was becoming
unmanageable to get the results that we wanted in the time that we needed.” The
process had resulted in stale leftovers for IT and indigestion for sales and
marketing.

In April 2000, Allrecipes chose digiMine of Bellevue, WA, founded in 2000. The
service provider gathers data from the client’s system and integrates the
information into a hosted data warehouse. The data is then cleansed, parsed and
filtered based upon the needs of the client to enable reports for a wide array
of business intelligence about the behavior of site visitors.

Creese points out the advantages for a firm like Allrecipes outsourcing to
digiMine. “DigiMine offerings will be attractive to companies that want access
to sophisticated and customizable Web analytics, but do not want to pay the
personnel, hardware, and software costs of an equivalent in-house solution.
DigiMine focuses on helping enterprises quickly answer unique questions - a form
of personalized service that very few of its competitors offer.”

The comparative differences in buying software versus using an application
service provider (ASP) like digiMine in the table below from the Aberdeen report
show the advantage of an ASP for an enterprise like Allrecipes.

A major problem for many smaller companies in implementing an in-house business
intelligence solution like data mining is that the task falls upon IT even
though the users will often be sales and marketing. Frequently, the IT staff
does not understand the business needs. Conversely, sales and marketing often
does not understand the technology.

This gap is bridged, according to Joel Sider, manager of corporate
communications for digiMine. “Even if you get a system in place, if it doesn’t
speak the language of the business user and make sense, they can’t apply it. Our
account management team works with the client to ensure that we meet the needs
of the business user while working within the constraints and policies of their
IT department.”

Deployment was completed by June 2000 and was a painless process for Williams. “
They were able to make the solution so easy for us. It didn’t require much to
take all of the tasks away from us. They are very bright, very driven and
entrepreneurial.”

Seeing With Vision
Allrecipes immediately began to see their business with increased clarity
according to Williams. “We discovered that we had less retention, that up to 50
percent of our traffic is new visitors. We had more churn then we thought. Our
audience is largely female and research suggests that females are much more
solution based on the Internet. They want to come in, find what they want to
meet their immediate needs.” Through understanding these visitors, Allrecipes
has been able meet these needs, leading to return visits.

The knowledge enables Williams to be proactive. “We can now entice more folks to
come back more frequently. DigiMine enables us to look at the top key words in
consumer searches so we can tell what ingredients or cooking styles are of
interest at a particular time. We are able to craft our editorials to hit on
subjects that were key and of immediate interest to the consumers. We know
exactly what our users are looking for, what features they are gravitating
towards. The visitor pattern has become more frequent so they become much more
loyal users.”

Williams says that Allrecipes is a happier home for the staff. “Outsourcing to
digiMine has made our IT staff happy as it keeps sales and marketing out of
their hair. Sales and marketing can now access digiMine where ever and whenever
they want to gather information and it doesn’t put anyone out. Everybody is able
to focus on his or her jobs more with less interruption.”

The ROI and growth is synergistic and stunning, as Williams reports. “We would
need at least three to four people in-house to mirror what they do and we wouldn
‘t get near the results. We are probably saving anywhere from 300 to 400 percent
.”

Add to that, a successful growing business with the help of the expertise of
digiMine that leaves Williams satisfied. “DigiMine has been able to keep up with
our growth and add refinements. We have tripled our traffic in the last two
years.” Visitors are becoming customers as it is just like home cooking. If they
like what they taste, they will come back for second helpings.

Bruce McCracken is a business writer with specialization in outsourcing. His
coverage areas are primarily in IT, eCommerce, CRM, HR, and supply chain/
distribution with focus on small to mid-sized companies. His work, useful links,
and commentaries with guests may be seen at www.brucemccracken.com He may be
emailed at .(JavaScript moet ingeschakeld zijn om dit e-mail adres te bekijken) (mailto:abatar@bsn1.net).

Reprinted from eCRM Guide (http://www.ecrmguide.com/).
By Bruce McCracken


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