24/7 P

Human Touch and Predictive Interaction

Predicting the Sale- Improving Online Sales through Intelligent Interactions
White paper by: Ravi Vijayaraghavan Vice-President and Head - Global Analytic February 2010

Human Touch and Predictive Interaction

Table of Contents
Introduction The Conventional Vs Online Selling Process The Intelligent Approach Conclusion 3 4 6 9

Human Touch and Predictive Interaction

Introduction
The conventional marketing theory suggests that the primary aspect that drives the demand for any product and/or service is the ability of product and/or service in itself to create the needed demand. The awareness of any given product and/or service thus far has been created through multiple print and media channels. While these channels continue to exist, the consumers in todays high tech world demand sale-at-convenience . The growth in internet is one such medium that has been of interest to many business houses.

Retailers are the early adopters of this great opportunity. However, can the retailers be assured of revenues even after making their products and/or service conveniently available for the consumers to buy through its online stores?. The challenges associated with this business model are also many - How can they be competitive? How can they beckon new customers? How can they provide a better customer experience? How can they build customer retention and loyalty? This whitepaper provides insights on how retailers can be innovative in utilizing online channel more effectively to grow their business

The Conventional Vs Online Selling Process; the importance of customer profiling

Wikipedia offers the following quote as a technical definition of sales- a systematic process of repetitive and measurable milestones, by which a salesperson relates his or her offering of a product or service in return enabling the buyer to achieve their goal in an economic way. This definition implies a very interactive process between the seller and the buyer. Typically, our experience with sales situations matches this description quite well. Clearly, depending on the product (a house vs. a book) the level of interaction may vary.

However, our buying experience online is far removed from this model and has traditionally been non-interactive. Is there a role for interactive selling and human assistance on the web? In this context what does predictive intervention mean and how does it impact online sales? These are some of the questions to which we will find answers in this white paper.

Let us first look at sales in a Brick and Mortar store. Imagine you are in Nordstroms. You casually walk over to the suit rack and start looking over $3000 suits from premier brands. Within a minute, a sales person with a friendly smile approaches you to help. She appears to know your size, and guides you to an eventual sale. We view this event as quite unremarkable. Why did she pick you to sell to? Maybe she judged you based on data (she saw your nice $600 Gucci shoes, your attention to details in selecting the suit and reckoned that there is a good chance you can afford the $3000 suit).

The selling process on the web however is quite different. It is more of a one-way channel. The buyer is allowed to browse through the store but are not helped or guided in anyway. Questions that a prospective buyer could have are answered through static help pages. But if the questions are a bit out of the ordinary the buyer typically receives no dynamic help from the web store.

It is not all bad news. While buying on the web is a decade old, it is only now that the market is waking up to the power of intelligent human assistance. The online world is also realizing the impact that data mining has on providing insights on predictability and proactively driving these customer interactions to deliver enhanced customer experiences.

With the emergence of advanced models in web marketing, online stores have the ability to drive targeted prospects to their website, unlike Brick and Mortar stores. However, online stores have shown surprisingly poor ability to convert highly targeted prospects into customers (compared to Brick and Mortar stores). This becomes very clear if one thinks of this process as a funnel. At the top there is a lot of drive to increase the traffic to the website through marketing. However the bottom part of the funnel narrows to a trickle (Exhibit 1), because in most web sites one-size-fits-all customer experience makes converting even qualified visitors into buyers difficult. The web stores offer limited scope for interaction with the seller in making a buying decision. Even the few situations where the visitor is offered ability to interact, say through a chat, the interaction is impersonal and poorly targeted since the salesperson has limited or no information about the prospect.

The Intelligent Approach

To increase conversions, retailers need to predict buyers behavior and their needs, and address them with intelligent interactions. To illustrate this let us take the example of an online store with more than 20,000 products. The online store gets advertised heavily in television and through other channels thereby driving traffic of over 25 Million visitors a month.

A prospective buyer Mr. Tom arrives at an online store on a Wednesday evening around 7 PM PST, looking to buy a digital camera priced between $400- $500. This action of Mr. Tom to use a specific online store is basis the conclusion drawn by him after completing a thorough comparative product and price analysis across various websites. Once on the website he spends time to research on options on the right model, delivery, price points and while doing so he wonders if he can get some help to guide him further. And lo behold! A chat invite suddenly pops up asking if he needs assistance to choose the product he is looking for. It is almost like mind reading. The visitor is pleasantly surprised, says yes and is guided by a chat agent through the research process, and ends up buying not only the camera but also some accessories online.

The question is, why was this visitor chosen for a proactive chat invitation as opposed to the other 25 million visitors? Welcome to the world of intelligent customer acquisition through Data Mining. This is only the beginning. If we think of this sales process as the conventional sales funnel described earlier how does one optimize the throughput from this funnel. Given that you cannot staff sales agents for every product category to improve efficiencies (it will in fact be the most inefficient sales model), the question that arises is what product to sell? Where does it make business sense to expend sales resources? Should it be in books or in digital cameras? If you know the name of the book and the author the only variant is whether it is a paperback or a hard cover. The involvement for assistance in such a purchase is low. However if you are looking for digital cameras with high digital and optical zoom from well known brands you will have more options. In essence, a product category with high value and high buyer involvement is a good business opportunity that requires human assistance. This decision of which products are best sold through guided human assistance is made through sophisticated modeling and A/B testing methodology which essentially measures http://247-inc.com/platform/px-online the lift in sales over selfservice as created through chat.

There are clearly customers who are more self-directed than others. Similarly, there are products that require more interaction than others. For example, buying a dining table or a high end camera requires more interaction than buying a book or a DVD. Both the customer behavior and the product types are profiled based on visitor behavior on the website and the information is used to determine the right candidates for human assistance through chat or other channels.

This profiling process, typically based on the salesmans intuition in the brick and mortar store, can be converted into a science in the web store. The second step is to figure out who is a hot prospect. Is it a repeat visitor or a visitor who has arrived directly to the website or arrived from a site that provides comparative analysis or has arrived through an email campaign? These and other attributes such as the visitors geographic location, connection type (cable, dialup..) are used to determine the hotness of a prospect.

But is this enough evidence to intervene when the visitor is on the site to aid him in the purchase process? Absolutely not. We still dont know if he/she needs help. And how can we do that? By identifying behaviors on the website that display a need for assistance. Is the visitor confused? Is he/she displaying behavior that does not follow typical purchase patterns, such as going back and forth between similar products, or getting stuck in the checkout process? Once the behavior pattern reaches a tipping point (measured by statistical models as propensity for interaction) then a chat pops up on the site asking if he/she needs any assistance.

So by this time, we have a highly qualified visitor, for a specific product category, who wants to buy, needs assistance and you have proactively offered assistance to help and close the sale. Perfect, this is a definite sale, right? Not yet, especially if you have one of your average salespersons who is better at selling home appliances trying to assist a camera buyer. The next model deals with positioning the right sales person for the right prospect. And how is this done? It is accomplished by analyzing the past sales record of the sales agent on various customer profiles and product categories.

But the power of data mining does not end here. What are the right products the sales agent should up-sell and/or cross-sell to this customer. Should the agent offer a battery back up that is 10% of the cost of the camera?

Finally, it is time to chat. Now the goal is simpleto translate the art of salesmanship into a science. Once that Nordstrom saleswoman approaches a prospect, she has to use her experience to make dozens of instantaneous judgments, based on any number of visual and linguistic cues: Is the customer detail-oriented, or does he prefer a softer touch? Am I pushing too hard, and is he beginning to resist? The customer appears to be losing interest is now the time to begin offering discounts? The chat format, of course, does not allow for all the nuances any decent salesperson picks up in a face-to-face conversation.

It does, however allow for the careful analysis of thousands of chat transcripts, using such technologies as text and data mining, to understand the techniques customer service representatives use to close the sale. Text mining reveals how best to talk to customers. From simple things such as the optimal response time during chat to sophisticated behavioral responses. For example, research in neurolinguistics suggests that people can be classified as audio, visual, or kinesthetic, depending on how they perceive the world and the language that is most effective in reaching them. The audio customer relies on phrases such as I hear., sounds great, and listen to this.. They respond to hearing data on a productfor example, laptop x has a 50% larger memory than laptop y Visual customers want to know what the product looks likeI see what you mean, how would it look next to my green chair. And kinesthetic customers depend on feelingI love your Website, I hate that color, how do other customers like that product? Agents who know how to respond to such cues can significantly boost their sales success.

Hence the sales agent not only knows who needs to be chatted with for what and when, but is also trained to interact based on the neural modalities of the visitor. The result: intelligent dialogs, increased sales conversion and improved customer buying experience.

Conclusion
To sum up, selling on the web has evolved to the next stage where it is no longer enough to have a nice web store, drive traffic, optimize a site and expect sales to zoom up. Consumers demand a quality of online buying experience that matches or even exceeds their experience alike in a Brick and Mortar store. And companies trying to achieve more of their sales revenues from virtual stores need to provide comparable experiences across their channels. Fortunately, the web is so rich in data that with the right channel strategy and by applying the right science in understanding consumer behavior (over the web), it is indeed possible to provide the consumer with such an enhanced experience, thus converting the science of sales into predicting the sale!

Confidential Information
Information contained in this document is confidential and proprietary to [24]7 Pvt. Ltd and should not be disclosed to anyone, other than the recipients of this document. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without express written permission from [24]7 Pvt. Ltd [24]7 logo is a trademark of [24]7-Inc, Inc. headquartered at 910 E. Hamilton Avenue, Suite 240 Campbell, CA 95008-0610, USA.

About [24]7-Inc.com
[24]7-Inc is a predictive interactions solutions provider that guarantees measurable business results across the customer lifecycle. With its patented predictive interactions SaaS platform coupled with 24/7 Outperformance framework, [24]7-Inc promises to improve sales by 25% or more, improve customer experience by 10% or more and reduce contact center costs by 20% or more for its clients. Today, [24]7-Inc is the no. 1 partner in contact center operations for 90% of its clients. (For more information visit: http://247-inc.com)