Crystal Palace

Crystal Decisions web site is a rare gem. The companys online revenue has doubled since last year, and nearly 50 percent of its online sales come from software downloads.

The tidal wave of activity can be traced back to Digital River, a solutions provider that specializes in site development, Internet hosting and various e-commerce activities. In this case, Crystal Decisions—which changed its name from Seagate Software in March 2001—hosts and designs its main Web site, while Digital River hosts Crystals online storefront, oversees the storefronts design, and performs storefront analysis and tracking.

"Digital River has helped us meet all three of our business goals: maximizing our revenues, increasing our close ratios, and getting customers to start buying online," sums up Steve Ryujin, senior manager for Crystal Decisions inside sales and online store.

Upselling Online Crystal Decisions is a familiar name to most software developers. The 16-year-old companys big break came in 1993, when Microsoft standardized on its flagship product, Crystal Reports, as the reporting engine for the more than 1 million software developers using Visual Basic. Annual sales have since grown to $145 million.

Crystal Decisions has had a close working relationship with Digital River for about two-and-a-half years. Technical and merchandising pros from both companies hold strategic planning meetings on a quarterly and monthly basis, augmented by tactical "day-to-day" planning sessions once a week.

In the summer of 2000, Crystal Decisions collaborated with Digital River on a new storefront, with a simplified design. That storefront opened in August. "But we still werent there yet," Ryujin acknowledges.

The two companies then teamed up on another revision, which carries navigational improvements a few steps further.

Opened in March of 2001, Crystal Decisions latest storefront also adds new personalization technologies from Digital River that are meant to convert "clicks" into actual online sales.

Smart Move Along the way, Crystal Decisions decided to offer online software downloads as another buying option to customers. "The idea really came from several directions. Some of our users had been asking for software downloads, either through e-mail or over the phone," recalls Ryujin. "Digital River told us that some of their other customers were experiencing a lot of success with software downloads. At the same time, our own product teams had been noticing software downloads as an industry trend."

Crystal decided to send out a customer questionnaire by e-mail. "We asked customers about their preferred methods of buying software," says Ryujin. The survey results were then analyzed by Digital River.

"Software downloads are what customers want. If a developer is working on a project at 2 a.m., he can download your product right away, instead of waiting for a FedEx delivery," he says.

In December 2000, Seagate Software began offering the Developer Edition of Crystal Reports 8.0 as a software download. Follow-up surveys and focus groups showed that some customers, typically those with broadband Internet access, were happy with the new option. On the other hand, some users with slower access over "straight HTTP" expressed concerns over download times and dropped connections.

"So in mid-January, we began to give them a new choice. Users could now opt to get an e-bot, or download wizard," says Brant Pallazza, Digital Rivers executive director of marketing. The e-bot is aimed at improved connectivity. If a line drops during an HTTP connection, the user can automatically proceed with the download after reconnecting.

Meanwhile, Seagate Software and Digital River proceeded with further enhancements to Crystals storefront, timing the new site launch to coincide with the companys March 5 name change and the release of Crystal Reports 8.5.

Upselling Online Crystal Decisions quickly discovered that downloads offered other advantages. "A software download gives you a lower cost of sale. Its also easier to offer value-added bundles. Then, after customers have downloaded the software, you can go back to them to offer updates," Ryujin adds.

From the new online store, North American users can download version 8.5 of either the Developer, Professional or Standard edition of Crystal Reports, and can opt for the e-bot if they wish. The e-bot is turning out to be particularly useful to users of the Developer and Professional editions. In the 8.5 release of those two products, file sizes have mushroomed from 200MB to 580MB, due mainly to a move to bundle in a five-user edition of Crystal Enterprise, a Web-based infrastructure for managing reports.

Custom Content The new storefront uses "interstitial" pages generated on the fly to help spawn either "upsells" to other products from Crystal or "cross-sells" to manuals and user training. Used in conjunction with Digital Rivers personalization data, the interstitial pages provide suggestions for additional products and services from Crystal. "We tell the customer, Heres what we think will work well for you," says Sam Richter, Digital Rivers senior director of marketing.

Digital River has used other technologies to further bolster Crystals close ratios, which essentially express the relationship between click-throughs and completed online sales. Before the storefront opened in August, that ratio stood at 0.8. The ratio has since jumped to 2.9, well above the industry norm of about 1.65, Ryujin says.

On the current storefront, if the customer starts to exit without actually buying a product, the site generates an interstitial page with a questionnaire asking the customer why. For privacys sake, participation in the survey is completely voluntary.

Customer information captured along the way is used for e-mail marketing campaigns generated by Crystal Decisions. Users also get the choice, however, not to receive e-mails.

All in all, Crystal Decisions has seen an average monthly increase of 8 percent in online sales since January. Also, European and Far East users are flooding the company with download requests. In response, the company is working on a downloadable international edition of its reporting software, Ryujin says.

With an assist from Digital River, Crystal Decisions online storefront may make a big splash abroad, too.