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 $ to fund the development of a prototype of a trust-based adviser

About the company Nappi had two priorities: hire a strong team and develop a prototype Company started small and frugally Its first prototype became Trusted Advisor for only $100000, released in May 1997 In 1998 InSite raised $1.5 million from angel investors

InSite’s product InSite’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 retail Key difference is that sales people build a personal relationship with the customer They ask questions, listen to responses and observe the customer’s behavior Customers 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 product Fear 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 NeedHow the Trusted Advisor fills the need People want to buy from peopleThe Advisor entails one or more persons as virtual sales people People want sales help, not self-serviceAdvisor 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 expertsAdvisor works on customer purchase behavior and intuitive interface

How Trusted Advisor satisfies e-merchant needs E-Merchant needHow Trusted Advisor fills the needs Companies need differentiatorsAdvisor’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 hypeAs it operates it observes uncontaminated customer behaviors and then InSite’s analysts synthesize and increase effectiveness for the Advisor

InSite’s strategy and goal The 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 Advisor Initial license was $ plus monthly maintenance fee of $5000 Typical engagement would costs $ to $ for the first year and $ 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” – Nappi In three months Jill was used times; CompUSA increase sales for 6 percent; 65 percent longer site visits; increase in customer satisfaction

Problems with sales 1. Customers are satisfied with status quo of the web for their products 2. Customers adopt other concepts 3. Customers do not perceive the benefits 4. Customers perceive high costs

Reaching end Promising sales lead nowhere 1999 InSite was reaching the end of its resources Venture capitalist liked the idea but they were unwilling to invest without growing number of happy customers and potential buyer

Implementation plan Make only Advisors where buyers provide information and knowledge about the customers Lower the price for at least 10 percent Design special Advisors for specific fields Make less complex model for customers and offer 5 years free maintenance Entered the market too early

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