Why Businesses Need Clickstream Data Warehouses

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Why an e-Business Needs a Clickstream Data Warehouse

The e-business environment has a number of unique characteristics that make a clickstream data warehouse the key business success. The Internet is a great leveler of the normally high barriers to entry for many types of businesses or business functions. In six months time it is not hard for your enterprise, or its competitors, to create an e-business that has a worldwide reach and the promise of a multi-million dollar revenue stream. Such businesses would have taken decades to create in the past. And, in the totally technology driven Internet environment, everyone has access to the same tools and the same infrastructure, all at a very low entry cost. Although many Internet enterprises make much out of their "first mover" business advantage or the novelty of a particular e-business model, neither of these provides any sustainable business advantage in such a level environment. 

It may come as a terrible shock, but the level Internet business environment actually rewards business efficiency and savvy marketing even more than the much more bumpy traditional brick-and-mortar environment. The challenge is to find the technology that enables an e-business to achieve efficient operations and gain a deep understanding of its market. The answer to this problem is the clickstream data warehouse. It is your competitive advantage engine and your long-term success differentiator.

Without a clickstream data warehouse the e-business environment can be quite opaque - often nothing more than a set of grand assumptions with little understanding of the actual dynamics of the underlying market. At least in the brick-and-mortar world one can get a sense of what is happening by simple human observation, but in the cybernetic Internet environment, without a clickstream data warehouse you are essentially deaf and blind. The irony is that clickstream data is remarkably easy to collect. Unlike the tortured mechanisms that have been created to extract data from operational systems into data warehouses in traditional brick-and-mortar environments, clickstreams are automatically recorded by all popular web servers in several standard formats. This avalanche of detailed user behavior data can be transformed and loaded into clickstream data warehouses, which we think will be the largest data warehouses in existence.

The Rich Click Data Stream

One other aspect of clickstream data that has yet to be fully exploited is the richness of information collected by the clickstream. It is much richer than the CRM-style data collected by leading-edge brick-and-mortar companies. In the Internet environment, an enterprise can know everything about what a user does, whether he is a customer or not. The enterprise can get a picture of total market behavior that goes well beyond actual customers. Unless you are a monopoly, your enterprise only has a small fraction of the total market as its customers. And while you may understand these customers well in the CRM sense, the key to growth and market dominance is the understanding of what non-customers want and how to convert them. Clickstream data warehouses are the mechanism you use to move beyond CRM to eRM, that is, electronic relationship management of the entire marketplace, not just your customers.

An intermediate step on the path to a clickstream data warehouse is the use of web server log file analysis tools, like WebTrends, Analog, NetTracker, etc. These tools are especially good for recording site hit statistics, site entry and site exit pages, and other gross statistical aggregates. These tools are typically not good at time sequence analyses, like what happened over the course of a site visit, why was the shopping cart or visit abandoned, what was the effectiveness of a promotion targeted at a particular user population, or what are the overall trends in these statistics over time? You need a clickstream data warehouse to do these kinds of time series analyses. Interestingly, the output of log file analysis tools can be used as part of the input data for a clickstream data warehouse, meaning that log file analysis tools and clickstream data warehouses often coexist in a synergistic fashion.

How Clickstream Consulting Can Help Your e-Business

After being immersed in e-business technology for several years, we have concluded that your Internet enterprise is doomed without a clickstream data warehouse. To address this need, we have formed Clickstream Consulting, which can help you tackle a clickstream data warehouse in a number of ways.

At the top level we offer clickstream data warehouse project assessments and management consulting. A critical piece of this offering is a unique methodology that drives cross-enterprise management consensus on the business goals of the clickstream data warehouse. By getting everyone to buy into the project goals, scope, costs, and timeline the project is far more likely to succeed.

Once the project assessment is done, it is time to implement the clickstream data warehouse. While Clickstream Consulting will professionally implement the entire project for you, it is often better to teach your staff how do it themselves. After all, since the clickstream data warehouse is the most strategic technology component of your e-business, it only makes sense to have good in-house expertise. In order to educate your staff, Clickstream Consulting has a series of courses for management and technical staff explaining the process of building and using a clickstream data warehouse in great detail. Some of these courses are already being taught by our staff at prestigious nationwide venues like the Data Warehouse Institute.

If you need consultation on any aspect of a clickstream data warehouse project, please email us at Project@ClickstreamConsulting.com or call us at 408-396-9500.