Stowe Boyd | Posted on Monday, December 7, 2009 at 03:44AM Next Jump: Does Better Data = Better Conversion OnLine?
The Holy Grail of online commerce is to get better conversion rates, and it looks like better data may be the key (as Tim O'Reilly has been preaching for years). Next Jump is a company that has been quietly gathering data and helping major online retailers improve their targeted offers:
Next Jump also handles the rewards programs that offer deals to loyal customers of companies like Dell, Borders and Hilton Hotels, and similar programs for membership organizations like AARP and the American Federation of Teachers. More than 100 million Americans have access to Next Jump’s e-commerce marketplace, and 10 million a year are customers.
As it has quietly expanded, Next Jump has been gathering data, and not only from companies and customers. It also gets credit-card transaction data from American Express and MasterCard. This vast trove — accumulated over years — is the company’s most precious asset, analysts say.
Next Jump analyzes that data to draw inferences about what a person would be likely to buy, and at what price. Its network also includes 28,000 retailers who can specify the characteristics of customers — age, location, income, for example — that they are most interested in luring with certain products.
Next Jump’s software then tailors offerings to small segments of potential customers, down to individuals, often reaching them with e-mail alerts. “It’s true microtargeting,” Mr. Kim said.
Most striking is the efficiency of Next Jump’s sizable network. Its click-through rate — the percentage of Web surfers who see an ad or offer and click on it — is 60 percent, the company says. At most e-commerce sites, a 5 percent click-through rate is considered excellent, analysts say.
But the endgame of Internet marketing is converting browsers to buyers. Next Jump says that for every 11 people who see one of its ads, one person makes a purchase. In Web commerce generally, 1,000 to 1 is deemed a good performance. Until recently, the Next Jump e-commerce engine was entirely unbranded, working unseen underneath corporate intranets or retailer’s rewards Web sites. “We were all white label,” Mr. Kim said. “Nobody knew who we were.”
via www.nytimes.com
So, another 2010 prediction: Amazon will acquire Next Jump.
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