Clicktale collects data on customers' digital behavior

Tuval Chomut Photo: PR
Tuval Chomut Photo: PR

CEO Tuval Chomut talks about the Israeli company's accelerated growth, challenges, and newest feature.

A website, almost any website, is based on the desire to create as pleasant a user experience as possible, so that someone surfing the website does not have to suffer in order to get the information he wants. This is mandatory for ecommerce websites; an unpleasant user experience is liable to keep the surfer from buying something that he was looking for, and to make him stay away from that website. Despite the obvious importance of this, however, there are many ecommerce websites that are unaware of what kind of experience the user had on the website, whether it was comfortable for him to surf on it, whether it made it easy for him to find what he wanted, whether he got fed up with it, and so forth.

Clicktale, an Israeli startup founded 11 years ago, realizes that websites need to understand the user experience. The company has raised $55 million since it was founded, including $35 million 30 months ago, which it is using to expedite its mobile penetration.

"This is a fundamental problem. Most of the companies in the world are abandoning the physical world of stores and physical branches in favor of the digital world of online stores and branches. While making this switch, they have no idea what the user is experiencing from their brand, because a store is a brand, and what the quality of that experience is. In other words, they don't really have answers to the question of what happens on their home websites. That is true for both content websites like "Globes" and ecommerce websites like Nike," says Clicktale CEO Tuval Chomut, who became CEO shortly after the company completed the above-mentioned financing round. Chomut was COO at AND solutions for a short time, and picked up most of his experience as VP global development at Israeli-US company ITG, a leader in development of financial technology that went from having 10 employees to achieving a $1 billion company value.

Infinite market

11 years after being founded, Clicktale has 250 customers, 25,000 websites that it has improved, and 350 billion surfing behaviors that it has analyzed. The company's market is in effect infinite, because a new website is born almost every moment. There are 3.7 trillion daily interactions between a user and a website (in the entire standard), three billion viewings of webpages per customer of the company on a monthly basis, and 500,000 requests for Clicktales' servers per second.

The company's customers include major firms like Walmart, Adidas, Tommy Hilfiger, Microsoft, Office Depot, Lufthansa, Samsung, Royal Bank of Scotland, the MetLife insurance company, communications giant Sky, and the Virgin media company. "In a world in which loyalty to a brand is waning, the user experience is becoming more and more significant. It's actually the only currency," Chomut declares.

He goes on to explain the significance of the user experience in the digital world, and the importance of Clicktale's solution. "Let's assume that you go into a clothing store. As the salesperson in the store, I can look at you and realize whether you have time or you're in a hurry, and whether you came in with your spouse - whether he is fed up with following you around, and so forth. In the digital world, all of this body language is lost.

"What Clicktale's software does is to look at the user's body language, in other words, the movements of his mouse, how he moves his smartphone and his finger on his smartphone's screen, and so on. It creates a digital body language, or to use the technical term, digital behavior language."

How does Clicktale's solution help a customer engaging in ecommerce?

Chomut: "Home Depot, for example, recently told us that it had saved tens of millions of dollars with our software, because it had helped the company detect problems on its website, thereby avoiding the loss of users and improving the proportion of conversion into a deal. Its website is super-dynamic; it constantly changes, because there are different products on sale almost every day, and there are many verticals of products and many people in the company managing the various shelves on the website. For a company like Home Depot and others, the price of losing a customer is prohibitive, and it's almost always difficult to bring back a disappointed customer."

Chomut adds that Clicktale's software, which begins operating the moment the user enters the customer's website, collects 1,000 samples a second, "so we are able to reconstruct everything that the user did on the website."

Does this mean that you collect personal information about the users?

"No. We don't know who the user is, and we don't collect personal information about him. We want to be clean in our analysis of his digital body language, and to avoid violating his privacy."

Clicktale divides the information that it collects about surfing behaviors into mindset categories, including confused ("like in a case in which you move up and down quickly on the website and move the mouse quickly"), researching ("you move the mouse slowly"), recognize and know ("you go directly to the place you need on the website"), and focused ("you know what you're looking for").

The company presents its conclusions to its customers together with advice, such as moving a link down or up. "We tell our customer how user-friendly his website is," Chomut says, referring to the purpose for which Clicktale was founded. According to him, the average value of the user fee for the software of the company, which operates on an software as a service model, is $270,000 a year.

Who is Clicktale's biggest competitor?

"Adobe (a software company listed on Nasdaq at a $74 billion market cap, T.T.), for example, is not exactly our competitor; it's more like a partner. You could say that in our niche, called web analytics, we are the leader, and there are a few companies in the UK and the US similar to us, but the volume of their activity is only a tenth of ours."

Do you translate the customer's problems on his website into economic value, in other words, how much revenue he lost or is liable to lose?

Yes, we can do it, among other things on the basis of the average value of the user's basic consumption basket on the customer's website, multiplied by the number of users who abandoned the website because of problems."

Are you planning to add new features?

"Next year, we want to be capable of understanding and analyzing in real time what the user is trying to do. I'll give you an example from the physical world: I recently entered a store in Los Angeles, selected some shorts, and went to the cash register to pay. The checkout person asked me whether I wanted to join the customer club, and I said no. Then he told me, 'I see you want to leave here as quickly as possible.' I answered, 'You read my thoughts,' and that can't be done right now in the digital world. We plan to launch this feature in the first quarter of 2018. From an engine generating recommendations, we'll become an engine generating far more operative signals, and that's actually the Holy Grail for our customers, who want to know in real time what the user wants to do on their website."

Wait a minute. Don't you have a chat window for that?

"Yes, but this window usually irritates the user, and he closes it. Our solution will try to keep disturbance and manipulation to a minimum. Our software is based not only on big data and machine learning, but also on Internet user psychology, and if it reaches the wrong decision to jump to a chat, we'll tell that to the customer, because we'll realize that the user has shifted from one mood to another. This third element of user psychology is unique to us."

Is the user of your software constant, or just one time?

"Constant. A website is a dynamic thing that changes constantly, and the experience of the person using it must therefore be constantly monitored."

What is the company's revenue target for the near future?

"$100 million in two years, and that means an average annual growth rate of 40-50%. As of now, we aren't making a profit or breaking even. This isn't the time to save; it's time to step hard on the gas in order to create a product that will take the market by storm."

Published by Globes [online], Israel Business News - - on August 22, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Tuval Chomut Photo: PR
Tuval Chomut Photo: PR
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