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Columbia House spins a business intelligence strategy

Retailer Columbia House has turned to Coremetrics software to analyze online customer behavior at Columbiahouse.com.

The Columbia House Company wanted to spend its marketing dollars more effectively, reduce operating costs and better serve customers through its Web site. Business intelligence struck a chord for the New York-based retail company, and it chose Coremetrics Inc.'s outsourced suite to analyze online customer behavior at Columbiahouse.com.

Columbiahouse.com is using the full suite of San Francisco-based Coremetrics software, including the data capture service, the data platform service and the eLuminate Commerce Web server, which produces reports from the data collected off visitors, said John Blaber, vice president of marketing for Coremetrics. The company is also producing customized reports specific to Columbiahouse.com to track the online behavior of their customers.

It boils down to cross-selling products that make sense to the consumer, according to Michael Schiff, vice president of e-business and business intelligence at Reston, Va.-based research firm Current Analysis.

These days, companies need to do more than just book orders and ship products, according to Schiff. "They need to analyze what works and what doesn't to optimize and maximize revenue. We're seeing the analytics side being paid serious attention to," he said.

Since the Coremetrics software is being provided on an outsourced basis, the Columbiahouse.com internal IT staff is able to retain their focus on day-to-day operations, instead of being distracted by the data acquisition and management.

According to Blaber, Columbiahouse.com chose an outsourced model because the data collected by Coremetrics is more accurate, and outsourcing has a lower total cost of ownership.

"Columbia House has the expertise in marketing execution, but they may not have the expertise to analyze" the customer data, Schiff said. In addition to the short term cost savings associated with outsourcing, Coremetrics will also build more expertise in the industries it serves over time, which will allow them to generate reports that Columbiahouse.com may not have anticipated, he said.

"The real trend in the market is for companies to move away from the first generation of online business intelligence (using in-house servers) to browser-based data capture (on an outsourced basis)," Blaber said.

Columbiahouse.com has recently signed the contract, but is not yet running with the software, he said.

Schiff suggested that Columbia House, if they are not doing so already, should ensure that their Web channel is integrated with their mail order business. He recommends the company stay involved with Coremetrics and to eventually have the freedom to bring the software in-house.

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