Getting Strangers to Take Your Candy

  • Written By: D. Geller
  • Published On: May 4 2000



Getting Strangers to Take Your Candy
D. Geller - May 5, 2000

Event Summary

Angara is a two-year-old company that began life with a fast memory resident database product, and has applied it to develop an application for e-commerce marketers. Where other CRM vendors are putting their efforts on collecting information about how customers behave on a site, Angara is focused on helping B2C sites make targeted presentations to first-time visitors.

Angara pays other websites for anonymous, permission-based profiles that an Angara customer can use to identify characteristics of new visitors. With some information about how visitors behave on other sites, Angara's customers can then make offers to first-time visitors that have a better chance of generating sales. In the first thirty days of live beta testing Angara's customers reported on average that sales to first-time customers doubled. Angara's solution is available only as a hosted application.

Market Impact

Angara's solution is similar to what Engage is doing for advertising. It is basically alone among personalization vendors in its approach. Angara has a strategic partnership with McKinsey & Co. that will bring the company access to terabytes of segmentation models from McKinsey's clicks-and-mortar customers as well as serving as a powerful sales channel.

Angara should be looking to partner in some creative way with Engage due to the similarity of approach, since Engage is the one company best positioned to become a competitor, although DoubleClick might like to grab onto this technology to replace its stalled attempt to target ads to surfers with personally identifiable data. Either way Angara has a good chance to establish itself as an important component of a website's CRM strategy.

There is not any immediate likelihood that other larger CRM companies will want to collect data necessary to compete with Angara. That's both an advantage and a disadvantage, because in the crowded CRM market most people have been told, and believe, that there is more value associated with keeping customers who buy once than with upping the conversion rate on new visitors. Not that both aren't important, but if achieving both requires buying two separate products we think that a majority will purchase a retention strategy before Angara's. However, the cost of acquiring a new customer has been reported to range from $70 to well over $250, and for some companies, especially those with small customer bases, Angara can make a persuasive ROI argument.

User Recommendations

We believe that both retention and conversion are critical for B2C websites, and that both have a place in many B2B situations as well. The company seeking to select an approach needs to consider both the overall ROI of each approach and the speed with which each can be implemented and begin boosting revenues.

Angara's offering will be most attractive as a first choice to companies for whose e-business model Angara can show a high ROI, and also for those for whom a retention approach might be slower to get off the ground because of the need to integrate with existing and diverse collections of data.

Of course, customers that already have effective retention strategies should think about adding an effective conversion strategy to their marketing mix.

 
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