Software that reads customers'
By Joe Gold, Senior Editor
Can your e-commerce site tell what your customer has in
mind? Can you tell in a few clicks who's just browsing and
who has a credit card propped up on the keyboard, ready
to buy right now?
Simon Rakoff says he has software that can do precisely
that, not through magic or trickery, but by analyzing human
behavior by analyzing the sequence of the links that are
followed, and how long people dwell on which pages.
Rakoff is CEO of The .COM Group (pronounced thedotcomgroup,
which is also their URL), in Reston, Va. "We're a customer
experience optimization company with solutions that can
understand and interpret and react to user intent in real
The idea is to give the software application the savvy
of a veteran department store person who can read the body
language of a customer who walks into her department and
can tell whether this is a buyer, a browser or someone just
"We don't know who they are, but we watch the way
they move through the site," Rakoff said. "We're
able to categorize them into proprietary categories like
window shoppers, browsers, information seekers or purposeful
buyers who have the credit card propped up on the keyboard
and they're actually going to buy something in the next
The technology is called DUET—for Dynamic User Experience
Technology. It is currently in beta testing, due for release
at Internet World in late October. To create it, The .COM
Group studied how people buy and how they interact with
Web sites to develop statistical models of buyer behavior.
"We have a black box we drop onto a network that watches
every user coming on to a Web system. It's totally anonymous.
We can make some relatively accurate inferences based on
their behavior about their level of experience on the Internet,
their propensity to buy, and other characteristics expressed
in a percentage," Rakoff says.
With a combination of cognitive scientists and engineers,
The .COM Group uses what Rakoff calls human factors engineering
to anonymously categorize customers purely by their online
behavior during an individual session. DUET's purpose is
to improve the customer experience by reacting to that customer's
Rakoff says the system increases sales conversion rates.
"You see a higher per-customer purchase amount, so
maybe a customer who came to buy one thing buys three, because
our solution can also identify impulse buyers, people who,
if you treat them the right way, are likely to put multiple
things in their cart and purchase them," he says. He
adds that "Decreased costs on the customer-support
side are also a byproduct of what we do."
Rakoff launched the .COM Group in October of 1999, presided
over the growth from three employees to more than 30, and
raised more than $10 million in venture capital. Before
that, he was a partner at Success Unlimited, consulting
with Mobil Oil Corporation, the U.S. Postal Service, Coopers
& Lybrand and others to develop teamwork, resolve conflicts
and implement business procedures.
"Lots of tools can measure how many people clicked
on a link, but what you really want to measure is how they
behaved when they got to the site," Rakoff said. He
predicted that the Internet will develop to the point where
it is as user-friendly as the telephone, and businesses
online will understand that in online business, "It's
about the people, stupid, not the technology."
How does it work? The DUET black box can send a trigger
to content-management software like Broadvision, which recommends
a real-time action. It can predict that when a user clicks
on the next page, he is going to decide that the shipping
cost is too high and abandon the purchase. A decision is
made on The .Com Group's appliance, which can send a message
over to Broadvision to throw up a window that says that
the shipping cost is going to be 50% off today only.
The bottom line: "If your site can afford to discount
shipping 50%, and if it makes business sense to do that
to save the transaction, you do, but not across the board,
which would mean that you would lose 50% of your margin,"
There's more. "We can identify the people who are
getting frustrated and need intervention from an online
service representative. Let's say you've got 100,000 users
on your site. We can pick out the 50 that have to have the
content within three seconds or they'll click away, and
we send that in the form of a trigger to an Inktomi or an
Akamai that says, hey, give these people the priority in
terms of serving the content to them."
The best results in testing the methodology have shown
a 400 percent increase in the customer conversion rate.
"That's beyond expectations, but it is attainable,”
Rakoff said. “The beauty of the Internet is that if
a site can get a five percent increase in conversion rate,
it can equate to millions of dollars on the bottom line."
Some observers are starting to give the system serious
consideration. Denis R. Pombriant is a senior analyst for
The Aberdeen Group, specializing in customer relationship
management. He's scheduled to have a look at DUET, because
he's been advocating the concept. "You can develop
a process that's more heuristic, but not identical, to human
thinking. In going to e-commerce, we need to replace the
information in the one-to-one dynamic in which people look
at each other, read body language, can ask questions and
suggest alternatives when a product may not be 100% of what
they need. We're getting more and more sophisticated over
A more skeptical view comes from Phil Terry, the user experience
evangelist and CEO of Creative Good in New York. He has
not seen the software, but has little faith in the concept.
"I am very skeptical of technology for quantifying
human behavior and customer experience optimization. Generally,
a quantitative, technology-based approach does not yield
Rakoff is willing to give skeptics a look at the program
when it is released late next month. "This is where
the Web has been trying to go for a long time now, being
a much more intuitive and interactive medium."
DUET creates a new beginning for OurBeginning.com
In consulting with the e-tail site OurBeginning.com, The
.COM Group's co-founder Leonard Adelman says. The .COM Group
identified several key elements to make the site more user-friendly.
They recommended shortcuts to get customers where they want
to go more quickly, adding exit links from every page to
give customers a graceful way out, and make sure the major
site categories are accessible from anywhere. He says OurBeginning.com
accepted 98 percent of the recommendations, which resulted
in easier navigation and a streamlined ordering process
that increased conversion rates, turned visitors to buyers,
all while each customer spent less time on the site.
All this comes from a system that Rakoff says requires
a minimal capital expenditure and installs completely in
about two hours. The .COM Group charges a $20,000 set-up
fee and a monthly subscription rate of $15,000 to $20,000.