Optimizing Web Sites for Customer Retention

Abstract: With customer relationship management (CRM) companies move away from a mainly product-centered view to a customer-centered view. Resulting from this change, the effective management of how to keep contact with customers throughout different channels is one of the key success factors in today's business world. Company Web sites have evolved in many industries into an extremely important channel through which customers can be attracted and retained. To analyze and optimize this channel, accurate models of how customers browse through the Web site and what information within the site they repeatedly view are crucial. Typically, data mining techniques are used for this purpose. However, there already exist numerous models developed in marketing research for traditional channels which could also prove valuable to understanding this new channel. In this paper we propose the application of an extension of the Logarithmic Series Distribution (LSD) model repeat-usage of Web-based information and thus to analyze and optimize a Web Site's capability to support one goal of CRM, to retain customers. As an example, we use the university's blended learning web portal with over a thousand learning resources to demonstrate how the model can be used to evaluate and improve the Web site's effectiveness.