InSite Marketing Technology

Goran Nagradic

History

Three cofounders started InSite in February 1997

Glen Urban and John Little brought new ideas on virtual buying environments, trust and discrete-choice modeling

Jeffrey Stamen along with Urban and Little recruited Stefania Nappi to be the chief executive officer and president

The three cofounders invested a total of $450000 to fund the development of a prototype of a trust-based adviser

About the companyNappi had two priorities: hire a strong team

and develop a prototypeCompany started small and frugallyIts first prototype became Trusted Advisor for

only $100000, released in May 1997In 1998 InSite raised $1.5 million from angel

investors

InSite’s productInSite’s product attempts to reduce gap

between shopping on the Web and shopping in a store

Initial target markets were any sales situation that involved a product with the multiple decision option and a desire for individualized service

Online retail vs. traditional retailKey difference is that sales people build a

personal relationship with the customerThey ask questions, listen to responses and

observe the customer’s behaviorCustomers react to answers, observe

salesperson’s behavior, form opinion about the product, salesperson and the process

Any of these can strongly influence their decision

Online retail vs. traditional retail(cont’d)

On the Web consumers wonder whether the seller will deliver as promised

They can’t feel (sense) the productFear of giving the credit card information If something goes wrong with the product

who will fix that

How Trusted Advisor satisfies e-customer needs

E-Customer Need How the Trusted Advisor fills the need

People want to buy from people The Advisor entails one or more persons as virtual sales people

People want sales help, not self-service

Advisor solves visitor’s soft and hard issues, makes recommendations, reassure visitors by educating them and encourage sales by saying why specific products are right for them

People do not wan to give up self-empowerment and control in order to receive sales help

Advisor is built on InSite’s platform of Trust-Based Marketing. Never takes control away from customers.

People want warmth without surrendering their privacy

Micro segmentation model allows the Advisor to make highly educated predictions of customer motivations and needs, without knowing much about the customer

People do not want to be computer experts

Advisor works on customer purchase behavior and intuitive interface

How Trusted Advisor satisfies e-merchant needs

E-Merchant need How Trusted Advisor fills the needs

Companies need differentiators Advisor’s Template Library makes it possible to create a unique look and feel for each merchant

Companies need greater Internet return on investment

Advisor’s ability to completely satisfy e-customers during buying process directly improves a merchant’s Web results

Companies need effective alliances between marketing and technology

Advisor bridges the gap between it.

Companies are overwhelmed by effort needed for e-commerce

Advisor integrates transparently into web sites

Companies want solid solutions, not hype

As it operates it observes uncontaminated customer behaviors and then InSite’s analysts synthesize and increase effectiveness for the Advisor

InSite’s strategy and goalThe technology would combine research on

trust cues, purchasing behavior, virtual buying environments and software capabilities

Goal was to blend the low cost of information service with the personal attention of a salesperson.

The system provides unbiased product information and uses a core engine to translate customer preferences into product recommendation

InSite’s strategy and goal (cont’d)Advisor engine takes known information

about the visitor and uses rule-based prediction to create a customized experience

The engine uses marketing segment predictions to infer information about the visitor without asking a lot of information

Advisor brings products to shoppers rather then requiring shoppers to find and distinguish between the products they want

InSite’s strategy and goal (cont’d)Insite offers two performance levels for

Trusted Advisor:1. Implementing a fully-featured Trusted

Advisor (requires about three months)2. The buyer provides knowledge about the

customers and InSite translates this knowledge into the Trusted Advisor

Pricing of AdvisorInitial license was $100000 plus monthly

maintenance fee of $5000Typical engagement would costs $200000 to

$300000 for the first year and $100000 for the year after

“Jill”Insite’s first major customer, CompUSA,

wanted an online advisor that would help customers buy notebook

Insite designed an advisor, named Jill, with all knowledge available 24/7

“Everything is going perfect” – NappiIn three months Jill was used 25000 times;

CompUSA increase sales for 6 percent; 65 percent longer site visits; increase in customer satisfaction

Problems with sales1. Customers are satisfied with status quo of

the web for their products2. Customers adopt other concepts3. Customers do not perceive the benefits4. Customers perceive high costs

Reaching endPromising sales lead nowhere1999 InSite was reaching the end of its

resourcesVenture capitalist liked the idea but they

were unwilling to invest without growing number of happy customers and potential buyer

Implementation planMake only Advisors where buyers provide

information and knowledge about the customers

Lower the price for at least 10 percentDesign special Advisors for specific fields Make less complex model for customers and

offer 5 years free maintenanceEntered the market too early

Implementation plan (cont’d)Make Advisors to replace menus on the Web

sitesfor example: Have couple of different Advisors on the same website; to first one you tell what do you want and Advisor brings you another one(specific for that section) just like in real store

Speech recognition – you would actually talk to them not write