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Online travel firm Expedia has found that data analytics can deliver a multi-million dollar kick to a company's bottom line.
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The company used SAS analytics to identify a single change to a web page that generated an overnight surge in sales, Expedia's VP of global analytics and optimisation Joe Megibow told the SAS Premier Business Leadership Series conference in Las Vegas last week.
Expedia analysts realised the site needed to be changed after investigating why many customers who clicked the 'Buy Now' button on the company's site did not complete the transaction.
"This is someone who was on our site, found the right location and hotel, put in all their billing and travel information and clicked the 'Buy Now' button," Megibow said.
"As far as leading indicators of purchase intent go, this is as good as it gets and yet we weren't taking the money."
Analysts began examining and correlating information about these failed transactions to identify what traits they had in common.
The answer, it turns out, was quite simple: "We had an optional field on the site under 'Name', which was 'Company'," Megibow said.
"It confused some customers who filled out the 'Company' field with their bank name."
After putting in their bank name, these customers then went on to enter the address of their bank, rather than their home address, in the address field.
"When it came to address verification to process the credit card, it failed because it was not the address of credit card holder," Megibow said.
One extra data field was costing Expedia $12m a year
(Photo credit: Shutterstock)
"After we realised that we just went onto the site and deleted that field - overnight there was a step function [change], resulting in $12m of profit a year, simply by deleting a field.
"We have found 50 or 60 of these kinds of things by using analytics and paying attention to the customer."
A major strand of the statistical analysis work that is undertaken by Expedia, Megibow said, is trying to match its customers more precisely to the right hotel.
According to Megibow, for analytics to be truly useful, analysts need to be prepared to help developers build new services and change business processes on the back of the insights their work delivers.
"[Analysts] need to work out 'What are we contributing to the business? Are we seeing things through and making sure that what we are doing is worth something?'," he said.
Comments
There are 14 comments. Join the discussion
1. samjones2
A good tool used for wrong reasons. Yes, SAS can find it - but is is not that UI and other elements can be functionally tested using other ways. Use tools for wheat it is really meant for.
2. ursonate
But it sounds like, the wrong reason turns out to be the right reason after all.
3. bobdavis321
The problem is that the same people test an application from the start to the finish. Hence they know what is or was meant by a question, but someone off the street doesn't have a clue. As a web programmer it amazes me how many web sites are totally useless because of this. I think 'If I cannot figure this out what is a normal person to do?'
4. MikeJones
I'm pretty sure that the "Company" field was added by some PGM or Business owner that thought it might would be a good idea to have it.
Remember that if you think it is a good idea then it is probably a waste of time and money.
TEST, TEST, TEST and TEST again. Have your mom look at it and see if she can figure it out. Unless your demographic is web developers you need to have regular people off the street (or Craig's List) go through it.
$12M a year is a ton of cash.
Oh, and Internet Explorer 6 is old and out dated so stop supporting it. How many thousands of dollars (and hours) a year are wasted in trying to get websites to look the same in Internet Explorer 6 as they do in Firefox or Internet Explorer 7 and Internet Explorer 8.
5. SimonCarter
As above, I think this article highlights two vital components of running an efficient process - Testing & Analytics.
It's hard to believe something like this can occur, but it happens all the time. To everyone reading this article, go to your own sites, analyse your objective processes, what stands out as being slow, non-essential or ambiguous? What ever it is, it's costing you money!
Simon Carter
www.ie.com.au
6. SimonCarter
As above, I think this article highlights two vital components of running an efficient process - Testing & Analytics.
It's hard to believe something like this can occur, but it happens all the time. To everyone reading this article, go to your own sites, analyse your objective processes, what stands out as being slow, non-essential or ambiguous? What ever it is, it's costing you money!
7. ivie
Having been a quality assurance staff for 4 years, I personally feel that development cycle should include a short test cycle performed by people who are NOT involved in the application and have no idea of the application. It's very easy to be clouded when one sees the product from the start.
8. User
I work for a leading independent Customer Experience agency that specialise in this type of research and whilst it seems amazing that these 'holes' exist costing companies £££ millions, they are prolific across all industries.
Often the simple truth is that companies are set up in silo's, collating 'data' from many sources for many reasons. Rarely is there a customer experience director with the remit to assess all of the available data to understand how, where, when and why the customer is interacting with the brand. Even in the rare case that this position exists, often there is inadequate skills to be able to interpret the data, find issues and provide independent insight for actionable change. A fresh set of eyes is often what is required in these circumstances.
9. mildpigeon
@mikejones fair enough agree with your comments. However, what if your customer base (or a large majority of it) can only use IE6 due to huge amounts of piracy, such as a potential 6th of the planet ie: China?
10. bradleyhebdon
This isn't hard to believe at all. In fact it's possible that it went through many rounds of testing and user validation, only for someone to inject their "requirement" in the 12th hour. I only hope the "appropriate" people are reading this, because otherwise it's another case of preaching to the choir.
The only consolation to this story is that folks were analyzing the purchase funnel after-the-fact. The 12M could have been much higher otherwise.
read more on my blog: uxbydesign.org
11. rick_harris
A great case-study, and some strong comments too.
It's clear that SAS analytics (and other tools which explore weblogs) can help businesses recover lost sales, especially in the 'bottom funnel' (that's the transaction process, where the buying is done, as opposed to the browsing/choosing which is the 'top funnel').
However, as many have commented, prevention is better than cure.
I've found that an ethnographic approach is just as valuable as standard UI testing.
In other words, don't get potential customers into a testing lab - instead, go to their home, and watch them do it in situ. Watch what happens when the phone interrupts their train of thought, or the baby starts crying, when email or skype pops up on their screen, when REAL-LIFE starts interacting with the process.
Customer experiences don't exist in a vacuum, and so should be tested holistically.
Our work suggests that this approach, in tandem with traditional user testing, provides powerful insight into the way people think through tasks, and manage them in the context of their lives.
Rick Harris
customerfaithful.com
12. SeenItAll
After nearly thirty years in the IT business, you realize sometimes the hardest thing to code for is "stupid".
13. Sarona
I think we need to give the benefit of doubt to the programmers they may have had a purpose for the Company field if a person was using a Company Credit Card the company name would be necessary to be filled in. The descriptive language needed to be used to say if you are using a company card then enter company name which would then prompt them to put their company address where the credit card bill is sent to and it would have worked. They may be loosing company business by removing the field.. I hope this additional insight can help in trying to not find faults with the programmers but the architects of the information flow.
14. JDBWell
@SeenItAll - I think your response serves as an example that new eyes and new perspectives are critical. Coding for stupid is not really that hard. But it requires effort. The funny thing is, that once you put the effort into it for a while, you might notice that your users are not all that stupid afterall.