Your Web site can deliver valuable
information about your customers
By Vikki Ramsey Conwell • Bankrate.com

Your Web site can do more than sell stuff out of your catalog. It can give you valuable information about your customers and potential customers.

But be careful. While a small business owner can use Internet technology to gather data about Web site visitors, those visitors are getting upset with e-commerce sites that pry too deeply.

From the business owner's viewpoint, it's tempting to mine every bit of information from Web site visitors. You can make a quick buck by plundering the privacy of visitors to your Web site, pulling every bit of information from them that you can. That information can help you increase your chances of making a sale yourself, or let you create a targeted list of consumers that you can sell to a direct marketing company.

Knowledge is power -- and money
There's more money than ever to be made online, too. According to an October poll commissioned by the Direct Marketing Association, 18 percent of all Americans made an online purchase in the past year. Internet shoppers spent an average of $559 on online purchases, according to the study, with one in 10 spending more than $1,000 online. The DMA is a trade group for businesses in interactive and database marketing.

And a new poll of 1,000 people released in November by the National Retail Federation shows that 10 percent of the respondents expect to use online services for holiday shopping in 1999 -- up from only 5 percent last year.

At the same time, however, a huge number of consumers are wary of making purchases over the Web -- and get downright angry if they find out that a Web site has sold or shared information the user thought was private.

Here's a look at what you can learn from your Web site visitors, how you can put that information to use in your business and the privacy concerns that cause most businesses to limit how far they will go.

What your Web site visitors reveal
What you can learn from your Web site's visitors falls into two categories -- that which they volunteer, and that which they don't.

First, the involuntary part. Every Web visitor to your site leaves clues about where they're dialing into the Internet from. You can gain a hint about where your customers are coming from, but the nature of computers and the Internet make it impossible to know the locale of each Web surfer.

Want to see how much you're revealing right now? The Center for Democracy and Technology in Washington, D.C., has put together a kind of cyber mirror that reflects back to you what your computer and Internet provider are revealing about you.

In addition, Web visitors to your site click on various pages. Your Web host almost certainly runs software that tracks how many people view each page. If you have a page that contains a catalog item that you thought would be the hottest thing since Beanie Babies and it's not attracting viewers, that should give you a clue that it's not so hot -- or something's wrong with the way you're presenting it. Either way, it's useful information.

These 'cookies' don't crumble
If your Web visitor's computer is set to accept "cookies," then it will allow you to place a small file on it. That will allow you to track the user's clicks through the site, and identify the user -- or at least the user's browser -- upon return.

More advanced Web sites also can read the information stored in the cookie and then personalize the user's experience. For example, it can greet the user by name or let the user enter a special area of your site without remembering a long-ago-forgotten password. You can even present targeted advertisements that match the user's past interests and purchase patterns.

"We are all creatures of habit," says Ben Isaacson, acting executive director of the Association for Interactive Media, a nonprofit trade association for business users of the Internet. People tend to buy in patterns and around the same time each year, he says, and identifying those patterns and time periods is key to luring them back.

"Direct marketing firms have been doing this for 30 to 40 years," he says. "Now, the e-mail and online marketing firms are getting into it."

Some users volunteer extra info
A savvy small business owner can also use the Web site to get additional information about customers. When offered a little incentive -- such as a free e-mail announcing sale prices or a sweepstakes entry -- many customers will reveal more about themselves, such as age, interests and ZIP code.

That will allow an e-commerce Web site owner to make a sale today by tailoring banner ads, special offers and e-mail messages to the user's interests. It will also increase sales tomorrow by helping the owner learn who the customers are.

Additional information can be categorized by what the customer purchased and when. It should be reviewed as frequently as possible with some sort of planned response.

For instance, says Isaacson, if the marketing patterns indicate that within a month after purchasing a computer, males tend to purchase speakers, then within a month, the business should be sending out an e-mail about speakers.

"Even if you don't know what you plan on doing with the information, you should collect e-mail addresses at every point of contact with your customers," says Bill Herp, president and CEO of E-Dialog, a Lexington, Mass., firm that provides e-mail-based direct marketing services.

Once you have a customer's e-mail address, you can begin creating a conversation through online newsletters, coupons and surveys. "Tying people to a transaction is the ultimate goal," Herp says.

They won't tell you everything
In general, online users are willing to share information to personalize the experience, but the depth of the information varies. Most people are willing to disclose information about hobbies and interests, but very few are willing to discuss health and financial matters.

And no one wants his or her privacy invaded. Under the threat of government regulation, an increasing number of businesses have adopted privacy policies that reveal what information will be collected, how it will be used and whether it will be passed along to other marketers.

That seems to be what consumers want. According to a survey by The Boston Consulting Group, 20 percent of respondents were more willing to disclose information if businesses revealed how they planned to use the information. That percentage jumped by 50 percent if sites assured people they would use the information in a specific way and not violate it.

Some respondents were even willing to pay for assurances of privacy. Thirty-nine percent were willing to pay a half a percent higher selling price if privacy online was assured, while 29 percent said they would pay more just for disclosure.

"At first, there were companies who just didn't get it. They didn't understand why they needed a privacy policy," says Marsha Goldberger, director of ethics and consumer affairs at the Direct Marketing Association. "Nowadays, it would be hard to imagine a company not realizing that need to have a policy."

The DMA advocates that businesses only collect the information they need and avoid asking for sensitive information such as Social Security numbers, and medical and financial data, unless it is relevant to the business. At its Web site, the DMA offers guidelines and policies to help businesses conduct appropriate online marketing strategies.

The cost of keeping a secret
As part of its privacy policy, many businesses agree not to divulge their mailing or customer lists to other businesses and marketing firms. Forgoing the hefty fees generated from selling databases can be very costly for small business owners.

"It's an internal debate they must reconcile," says Herp.

For online customers, "being used" is a big enough reason not to browse. According to a survey of 5,000 online users by Narrowline, an Internet advertising research firm, more than 60 percent said the fear of becoming a target of unwarranted marketing kept them from accessing additional information online.

For Goldberger, consumer concern should dictate industry practices.

"We have to regulate ourselves to do what's in the best interest of the consumer," she says. "We want to keep online marketing open for commercial purposes without having it legislated."

Vikki Ramsey Conwell is a freelance writer based in Georgia

-- Posted: Nov. 8, 1999