Analytics! Why I love Web Marketing

December 7, 2010

Over the last week I’ve been reading Avinash Kaushik ‘s book, Web Analytics 2.0Web Analytics 2.0.  Avinash’s personality, which carries through his writing, actually makes the subject of analytics engaging.   I first met Avinash about 5 years ago, when he and I were on an expert panel together at a Frost and Sullivan Conference.  At the time, he was working for Intuit.  Since then, he has gone on to become the “Analytics Evangelist” for Google, and has built quite a following, (and well deserved!).

Before the Internet, I was always reluctant to recommend massive investments in off-line advertising.  The question was always “Do people really read that?”, “How will we know if this ad was a good investment?”.  While there were always measurement tools and services, such as Nielsen, there was always a shortage of data, and the statistical projections were never complete.

Today, with Internet marketing, the challenge is not that we don’t have data, but rather how to find meaning in tremendous amounts of data.  The web enables us to track clickstream in precise detail, and there are enough free and inexpensive tools to cut and chop the data any way you wish. With all the data available, there are no longer any good excuses for bad marketing decisions.  We must find a meaningful way to get out from under the data to an understanding of what site visitors are doing, and then making the right decisions to win at your business.

Avinash makes an interesting point in his book, which I wholeheartedly support.  He suggests following a 10/90 rule.  With all the free or inexpensive tools out there, don’t spend a lot of money on tools, maybe 10% at most.  Spend the 90% of your analysis budget on smart people who can see beyond the data, and develop insights that can turn into action.

I don’t pretend that I can summarize the 475 pages (plus a CD) of techniques that are presented in the book, but I’ll point out my five key insights that I believe are key to using analytics for successful web marketing:

1:  Experiment!  Take risks with crazy ideas!  The beauty of the Internet is that you can change things every day, instantaneously, to try something new.  Not only that, you can actually measure what works, performing A/B tests with free tools such as Google Website Optimizer. I don’t usually quote Rupert Murdoch, but I agree with his point when he said “Big will not beat small anymore. It will be fast beating slow”.

2:  If you have limited time, focus on your bounce rate.  This is your most important measurement.  If people are leaving your site without even clicking past the home page, you’ve got a problem (which could be on the site, or could be in your keywords that drive visitors to you).  That’s the first thing you need to fix.  If you can’t keep them, you’ve lost the battle before you’ve begun.

3:  Learn to use Google Analytics!  Create custom reports.  Drill down to what’s interesting. Track to your goals.  And remember, even if you are selling product, you may have more than one goal.  In an ecommerce site, it’s just as valuable to have a visitor go to your store locator, as it is for them to buy a product.

4.  Figure out how to integrate data from outside the clickstream to get a full picture.  Include your social media results and even your off-line results if you can.  The data’s not perfect, but the trends should be apparent.

5.  Overall, don’t get analysis paralysis.  With a robust site, you’ve got more information than you will ever need.    Find insights, use alerts, and always come back up for air!  If you do, you should be rewarded everyday with a slight improvement and movement of the needle.  Don’t worry about industry benchmarks; instead focus on ensuring that you are improving results on your site every day.  It’s a competitive world out there, so enjoy success in the numbers, but remember that the endgame is not what the numbers say, but rather what you learn from them.

Good luck, and keep experimenting!

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3 Comments | e-Commerce, Ecommerce, internet marketing, Uncategorized, Web Analytics | Tagged: , , | Permalink
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Are you a “Situational” or “Sustainable” Marketer?

November 17, 2010


As I see it, there are two divergent strategies to drive business growth:  “situational”  solution sales, or “sustainable” solution sales.  Short term volume, or long terms quality.  I quote Dov Seidman, the author of “How: Why How We Do Anything Means Everything…in Business (and in Life)”, who explains the difference:

Leaders, companies or individuals guided by situational values do whatever the situation will allow, no matter the wider interests of their communities. A banker who writes a mortgage for someone he knows can’t make the payments over time is acting on situational values, saying: “I’ll be gone when the bill comes due”.

People inspired by sustainable values act just the opposite, saying: “I will never be gone. I will always be here. Therefore, I must behave in ways that sustain — my employees, my customers, my suppliers, my environment, my country and my future generations.”

Steve Martin A Wild and Crazy Guy

Ok… now a dive into the archives … Years ago, before Steve Martin began a national tour playing banjo, before his success as a serious actor  (ie. It’s Complicated), or a hilarious comedy actor (ie. The Jerk), he put out of couple of very funny albums of his standup comedy routines (along with some great  banjo playing).   One of my favorite routines on his 1978 album” A Wild & Crazy Guy” was his analysis of the revenue model for his performances.  I paraphrase:

“If I could fill up a 3000 seat hall at $3.00 a ticket, I’d make $9,000.
If I could fill up the hall at $7.50 a ticket, I’d make $22,500.
but if I could fill it at $800.00 a ticket, I’d make $2,400,000…This is what I’m shooting for – one show, goodbye!”

So do we get the most satisfaction by providing our customers with situational or sustainable solutions?

The answer, of course is never quite that black and white.  If you sell a commodity, and the cost of customer acquisition is low, a situational sale may be fine for you. That’s the basis behind the auction industry, to get a quick sale for whatever today’s situational value is for your product.   But the customer probably won’t come back to see you a second time, unless you have the best situational deal for them again.  Therefore, you survive by responding to the market forces.  But for most products and services, we all know that the cost of obtaining a new customer is much more than the cost of keeping a current customer coming back for more.   Too many businesses who must invest to find customers still focus only on that quick “situational” sale, and too many customers buy the situational product, assuming that the best price is the best value.

Sustainable business is good long term business.  Most sellers of situational solutions never go through the analysis to realize that it’s usually much more profitable (and satisfying) to have 1000 happy sustainable customers, than 10,000 churning customers who are only as good as the next great situational deal.  With a sustainable business model, you manage the market, rather than the market managing you.  To use Steve Martin’s scenario of his big show, if you’re good at what you do, your market will demand that you do it again.  Would Steve Martin really quit performing if he made $2.4 million on one show?  No… he’d do it again, and rake in $4.8 million.

A great illustration of the positive effect of a quality sustainable service was my experience working with Keyword Connects.  Keyword connects generates leads for home improvement contractors.   But not just any leads, high quality leads.  While many online lead generation firms market on the quantity of leads they can produce, Keyword sells ONLY qualified quality leads, turning away more potential clients than they accept.  What a concept!  The clients that “get it” love them. These clients have done the analysis of what a qualified lead really costs them, and have the insight to realize that there is value in quality.   The result? Good profitability for Keyword Connects, Good profitability for the client, and a sustainable business relationship.   And the bonus for Keyword Connects and their loyal clients?  The ability to focus investment on enhancing their service, rather than expanding their sales force to handle client churn.    The net result is a sustainable business for Keyword, their employees, clients, and community.

Steve Martin So did Steve Martin make his $2.4 million?  Yes, he discovered movie acting, and did quite well.   But what’s he doing now?  He’s back doing what he loves best.  Entertaining fans one at a time, playing banjo… And playing it so well, that his fans will be back to see him again, and again, sustained by a quality performance that sells out every show at a fair price that satisfies him, his fans, the venue, and the community.

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Prioritizing Between Clicks and Brand-Building

January 3, 2010

There actually was a brief time in the early days of the Web when all you had to do was be there, you could buy a URL like “store.com”, and you would be found.  This made marketing decisions very easy, and resulted in both a great brand and tons of business. Those days are long gone. Unlike Kevin Costner in “Field of Dreams” we’ve all learned that the old adage “if you build it, they will come” just doesn’t work anymore for ecommerce.  In the bricks and mortar world, we can often leverage location, in addition to both offline and online efforts to drive people into our stores.  On the web, location, in the traditional sense doesn’t matter. Location in the search engines and media does, but there are too many search engines and media outlets to know which one counts.  So how do we drive customers and business to the site?

Brand vs. ClicksI like to view marketing and advertising efforts in a continuum between brand building investments and click generation initiatives.  It is interesting how they reinforce each other, but don’t be fooled into thinking that they are the same.   A known brand makes it easier to drive clicks, by providing credibility (or Whuffie!), thus making your lead gen ads much more likely to be clicked on, and conversely, clicks drive brand recognition.  Click generation is the priority for the short term, and should always be your core goal.  Over time though, investment in your brand makes it easier and cheaper to drive clicks.  The good news is that, if you’re just starting out, you can “borrow” a brand, by advertising a known product that you sell on your site, or a celebrity brand endorsement (Tiger Woods—NOT).  This may not get you the sale, since these popular brands will most likely be also promoted by your competitors, but will at least get you the credibility to encourage someone to click on your ads.  From there it’s up to you to convert the visitor to a buyer.

You can spend a fortune experimenting for results. So the challenge becomes, how do you find the time and expertise to effectively run and manage an online campaign to be in the right place at the right time?  What’s the mix between banners, contextual ads, Facebook, social media, paid placement on Google, Yahoo and other search engines, and how do you drive towards that elusive goal of organic optimization.  (And even more so, does your marketing organization understand all these terms?) The good news is that, unlike the offline world, we can measure our efforts, pay for performance, and, if we use our analytics well, maximize our return on our advertising and marketing efforts on the fly.

If you have the expertise, and the time to experiment, you can do this yourself, discovering your own keywords, managing a Google Adsense program, and tracking and optimizing around word choice, time, date, and competitive pressure.  You can also manage your own social network campaign, as long as you have the time to Tweet, Digg, and Blog.  Unfortunately, this effort requires constant attention for cost-effective results. You also need to keep a pulse on the latest trends for your particular audience:  Gen X’ers and older still search on Google, while many Gen Y’s find what they need through Facebook and Youtube.  Unless you can dedicate yourself or a knowledgeable staff to constant optimization, you probably are best off with external help to start.

Help comes in many forms.  You could hire a traditional ad agency.  Most of these firms can manage a web effort. But be careful!  Traditional agencies are modeled around brand building, not lead generation.  They also tend to bill based on time, not results.  Hopefully, you will eventually get to the point of needed their brand building expertise, but I don’t believe that’s the place to start.  The best way to drive traffic is with a firm that focuses strictly on lead generation and SEO optimization.  A firm such as Overdrive Interactive, who provides this service for a fee, is a viable option.  Ideally, you should consider a firm that that has already learned the competitive landscape in your niche, and provides lead generation service on a full pay-for-performance basis.   This may be a double-edge sword, as anyone who is already successful in your market runs the risk of competing with themselves to drive advertising costs up.  But if you can “steal” this service from your competitor, it minimizes your risk, and gives you a partner who is fully committed to the same goals as you:  If they can’t drive business they don’t get paid.  With aligned goals, and focused energy, your risk is minimized, and you are certain of successful growth.

Happy New YearBest wishes to all of my readers for a happy, healthy, and optimized 2010!

1 Comment | Brand Building, Click Generation, e-Commerce, Ecommerce, internet marketing, Lead Generation, shopping cart, Social Media Marketing | Tagged: , , , , , | Permalink
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