Tuesday, August 7, 2012

Web Analytics Revolution: from Quantity to Quality

Are you struggling with which web analytics software you should use to measure your new website? Forget about it. They are all the same. As a marketer, what you really should think about is what to measure and how to best take actions from those measures. As a graduate student in the Northwestern Medill IMC program, we have studied web analytics and how they can be used to improve your business. And we have some tips to help you turn data into qualitative information.

                                        Picture Source: http://www.gabblet.com/web-analytics-service.aspx

Ron Person, Director of Analytics for Sitecore, said in his great great article Why Engagement Analytics Trump All Others that “we should be measuring marketing quality.”So far, most web analytics are measuring marketing quantity such as visits and clicks. However, to predict consumer behaviors and determine the gaps, marketers should focus more on marketing quality rather than quantity. The quality here refers to engagement, which is mainly measured by conversion rate right now. However, conversion rate may not be a good indicator of engagement since different behaviors require different levels of engagement. For example, an email address and a complete registration certainly require different levels of commitment from consumers. Even if they share the same conversion rate, they would not have the same level of engagement.

Ron introduced a simple method to measure engagement. He assigns different engagement values to different transaction points based on the communication, trust, and commitment required. The values will be accumulated. For example, clicking on a web page has a value of 5; e-mail signing up is 10; registration is 25. Then if a person clicks and signs up, he will have an engagement value of 15. In this way, marketers will be able to calculate the value of each visit rather than only the number of visits. More importantly, they can even compare the value to their other marketing efforts across different platforms and even with competitors. With this simple method, marketers will be able to avoid wasting their marketing budget on those ineffective marketing events.

The method above sounds simple and effective. However, to actually measure engagement, here are a few steps you need to go through.
  1. Map out the customer purchase funnel. Purchase funnels vary from business to business. To map out the specific funnel for your specific business, you need to observe what your customers are doing on your website. You can simply use a website monitoring tool to help you track each movement your customers make. Carefully analyze those movements. Find out all the turning points where the traffic decreases significantly. Each turning point will become each stage in your funnel.
  2. Categorize funnel stages. Although traditional Awareness-Interest-Desire-Action (AIDA) model may no longer accurately reflect how consumers actually behave, it is still a good indicator for determining engagement levels. Categorizing each funnel stage into AIDA will help you easily assign engagement values later. For example, browsing the website belongs to Awareness while requesting for more information goes to Interest.
  3. Assign engagement values. After categorizing the stages, You now only need to evaluate the engagement levels of the four categories and assign each category an engagement value rather than assigning every funnel stage. In this way, you do not have to re-assign engagement values for different purchase funnels. The engagement values can be determined once and for all.
  4. Measure the quality of each visit. After you assign engagement values, you will be able to add up the value of each funnel stage a customer goes through. A higher value stands for a better visit quality. This is a much more effective way to measure the effectiveness of your marketing campaign than merely monitoring the traffic. Additionally, you will be able to compare the effectiveness of one market event with your other marketing events.

Simply follow the above steps; you will be able to measure quality and make a huge difference. The earlier you take action, the more money you will save on your marketing campaign.

Yiqiong "Jessica" Xu is a graduate student at Northwestern University's Medill School. She studies Integrated Marketing Communication and concentrates in Direct & Interactive Marketing and Marketing Analytics. Follow her on Twitter(@xuyiqiong) and LinkedIn(Yiqiong Xu).

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