In 1995, Paul Graham used Common Lisp to help online merchants. Today, we’re doing the same with Clojure.
The space: The retail e-commerce market is about 180 billion dollars a year in revenue. The online travel market is over 100 billion dollars. These are United States numbers only, the global numbers are several times larger.
The measure: Conversion rate is the number of folks that buy on an e-commerce website, divided by the total number of unique visitors to the website (i.e. conversion rate = purchasers/visitors). This ratio measures how well an online business is being monetized, given a certain amount of traffic.
The problem: Globally, the average conversion rate is under 1%. This means that if you’re an online merchant, only 1 visitor of every 100 will buy anything on your site. And since you’re paying someone (say Google or Yahoo) to drive traffic to your site, your investment is running at an efficiency of 1%. Typically, to increase profits you have to increase your traffic spend… clearly a very inefficient proposition.
The solution: Runa targets the 99% of traffic that doesn’t make purchases. Runa tracks everything a visitor does on an e-commerce website, then analyzes this data to determine patterns. Statistical models are run against the data to generate a predictive understanding of variables that influence buy decisions. This insight is then used to make targeted offers to visitors in order to incentivize them to buy, in real-time, as they are browsing the e-commerce site. The actual offers can be influenced by merchants via an easy-to-use online dashboard. The Runa service is free to install, provides deep analytics/reporting, and when enabled can intervene in the visitors shopping flow to make specific, personalized offers, in order to increase conversion.
The reward: We’ve seen 30% to 60% sales lifts with our early customers. Runa only charges on a performance basis (a percentage of increased sales). Our clients have been happy to pay this low fee to get these kinds of results; they’d need to increase their traffic-spend by an order of magnitude to get similar results. Instead, when their Runa trial period runs out, they’re anxious to pay their Runa bill, lest their sales go back down to their pre-Runa levels…