From the October 2001 issue of Entrepreneur

Give customers what they want. It's a simple idea that tends to perplex many an e-commerce merchant. That's understandable, to an extent: When you're busy operating an online store, fulfilling orders and enacting various banner campaigns, communicating directly with customers-and formally finding out about them-often falls by the wayside. Days are packed with running the business, and before you know it, you're acting on gut rather than hard data.

But neglecting to peek inside your customers' heads can have dire consequences. Face it: How do you honestly know what they want-or what they don't want-if you don't even bother to ask?

Answers can be obtained the old-fashioned way: via formal analysis and research. Chances are, you'll be surprised at what you'll learn. Who knew shoppers respond in record numbers to pop-up windows advertising this week's sale?

To get your e-business on the right track, you should implement a formal system for determining and adapting to customers' desires. The sooner you make regular site improvements-based on real-life customer feedback-a top priority, the sooner you'll see sales shooting skyward.

Learning on the Fly

For this tactic to work, you must take a proactive approach to discovering customer opinions. Simply reading the few random e-mails shoppers may send your way won't give you the information you need. Think more along the lines of performance metrics.

"It's no longer about getting an e-mail about your site and doing something with it," says Elaine Rubin, president of Ekrubin Inc., an e-commerce consulting firm in Woodbury, New York, and chairperson of Shop.org, a Silver Spring, Maryland, trade association that focuses on consumer marketing technologies and trends in Internet retailing. "Companies [must] formalize the process so there is a feedback loop." According to Rubin, successful businesses closely examine and analyze customer data, comments and behaviors on a weekly basis, then figure out a formal system for using what they/ve learned to create new and improved Web sites.

Constant learning and adaptation take center stage at eBags Inc. in Greenwood Village, Colorado. From the start, the founders behind this luggage retailer intended for detailed customer feedback to be used when evaluating the Web site. EBags found so much success using the formal learning system-enacted just after the site's 1999 launch-that it's still relied on today. The creative approach allows for customer input to influence weekly alterations to the Web site.

It works like this: eBags runs two slightly different versions of its site simultaneously. Visitors are sent to one of the two sites at random. The two sites are constantly compared on the basis of performance metrics-such as how many people clicked on a particular product or design element on a site, and whether average purchases increased according to the specific placement of a product or design element. Then, about once a week, the weaker site is replaced with a new one that replicates the stronger version but also incorporates new, experimental elements.

"The beauty of the Internet is that it enables you to get real-time consumer feedback. Very early on, we determined that we wanted to set up the site so that we had the flexibility to test certain things on the fly, and essentially do market research on the fly," says Peter Cobb, 44-year-old co-founder of eBags, which hit $20 million in sales last year. "Then, we set up certain parameters, and if one beats the other, then that's the winner. Our Web design and merchandising team makes changes based on this."

If you're still not sure you have time to regularly evaluate customer opinions, consider this: In some cases, the enhancements helped eBags-which recently received the "Website of the Year" award from Catalog Age-realize a 50 percent increase in sales. "We recently experimented with a pop-up window, where half the people get it and half the people don't," Cobb explains. "While we were concerned that it would turn people off, we found that those who received the pop-up actually purchased more and went further into the site."

Of course, less-elaborate ways exist for learning about your customers' wants and needs. You might try evaluating relevant customer e-mails and phone calls every week. It's true, customers aren't always willing to give their opinions to you, so you'll probably have to encourage them to share. You can ask them specific questions when they register on your site, or you can use pop-up windows to ask users how they're enjoying the site and if they're experiencing any problems.

Most likely, a general theme will emerge in the responses. Ask yourself: Does this feedback point to any trends? What three complaints stand out? Once you compile a list of specific details, you can begin to implement changes to your site.

Not surprisingly, customers don't always readily offer their opinions to you-but without them, you won't know what should change and what should stay the same. To gently encourage them to give feedback, try asking specific questions about how they feel about your site either when they register to become a member or when they fill out their customer information to make a purchase. Also, try using pop-up windows that ask customers how they're enjoying your site and whether they're experiencing any problems. Another idea is to set up an area on your site that offers your customers incentives, such as gift certificates or coupons, to answer questions about your site honestly and completely.

Just remember: Change is good, but too much change can be a bad thing. Make major changes if everybody who visits your site is dissatisfied, but don't make radical alterations and relaunch the entire site based on a couple of complaints you may have received. "Performance analysis and feedback are most effective for making subtle changes," Rubin points out. "After all, the purpose of this is to improve your current site-not do an entire redesign."