So do you have a static AND dynamic strategy for your digital existence?

Occam's Razor
by Avinash Kaushik

Six Visual Solutions To Complex Digital Marketing/Analytics Challenges

75 Comments | Print | PDF

Two things I love a lot:
1. Frameworks, because if I can teach someone a new mental model, a different way of thinking, they can be incredibly successful.
2. Visuals, because if I can paint a simple picture about something complex it means I understand it and in turn I can explain it to others.
This post is at the intersection of those two lovely things.
Each of the six visuals re-frames a unique facet of the digital opportunity/challenge, and shares how to optimally take advantage of the opportunity/challenge.
We'll start with digital at the highest strategic level, which leads us into content marketing, from there it is a quick hop over to the challenge of metrics and silos, followed by a recommendation to optimize for the global maxima, and we end with the last two visuals that cover social investment and social content strategy.
A vast expanse of our current existence.
All of the visuals are in the form of a venn diagram, though, as you'll see, I do take enormous liberties with the format. [As Orlando correctly points out in his comment, in taking liberties I've mostly created Euler diagrams. Venn diagrams are a subset of Euler diagrams, checkout the difference.]
Ready to learn, smile and cry (just a little)?
Let's do this!
#1: How to Win, Really Win, at Digital: One-Time PLUS Many-Time Relationships.
The most intense amount of effort companies put into their site happens at site launch or the yearly new product launch. Everyone gets excited, agencies are hired, content is scraped from product box-shots, prettiness is sprinkled everywhere and much happiness, represented by a gigantic sigh of relief, occurs.
All of that is good.
The challenge is that this annual, or semi-annual, update of the content or the website design, is a terrible way to win at digital.

All the stuff you've launched is great for showcasing your company and its products. It delivers conversions when I visit your site once and buy something. But beyond that engagement, that one-time relationship if you will, there is no reason for me to ever come back. Because you don't have anything updated on your website. If I remember everything you sell, I might come back the next time I need something from that everything. Or due to some incredible co-incidence if I bump into your brand when I'm thinking of buying something from your everything.
A secondary, under-appreciated, challenge is that search engines value freshness of content. Once you launch your site, it becomes stale in due course (from a organic search signal perspective). It impacts your organic rankings (even if there are tons and tons of factors that influence SEO results).
A final tertiary challenge is that in a world dominated by conversations and social, your static content rarely entices any new conversations. It is great that you've added a silly string of buttons to all your product pages, but there is hardly a reason for anyone to click on them. (Most of the time all they are is an ad for addthis or some other "free" provider of those buttons.)
If you want to truly rock digital, this is what your digital strategy should look like…

So do your periodic product launches/site refreshes. But almost all your content energy should be poured into fueling the creation of dynamic content! You should have an incredibly amazing blog for your company (more on this below). You should have a robust strategy to earn compelling product reviews. You should have a well defined strategy to create videos and how-to content (constantly updated with solutions to new pain points of customers). You should talk about how innovation works in your company. Your employees should tell their stories. And so on and so forth.
This constantly updated content provides me more reasons to visit your website and stay in touch with your brand. It is also immensely beneficial for search engine optimization (great content, delivered fresh, every day!). Finally it generates a constant stream of social amplification and social conversations!
So do you have a static AND dynamic strategy for your digital existence?
Patagonia is amazing at this. They have a fantastic website where I can buy fantastic stuff that I fantastically love. In addition to that they have amazing content like what you'll see at Patagonia Surfing, and they have a regularly updated awesome blog The Cleanest Line and so much more. As a result I have a one-time and a many-time relationship with the Patagonia brand.
Ditto for one of my favorite hotels in New York, The Standard. Great website for booking rooms and all that. But they also have a great blog/culture guide/all things cool and amazing sub-site called The Standard Culture. I have a time-to-time relationship with their brand (whenever I have to visit New York). I also have a many-time relationship with them because of all this amazing dynamic content – which ensures that I love the brand and that in turn always makes my hands type their url when I have to visit NYC! That is what you want.
I'll be remiss if I did not provide you with two examples of what magnificent product reviews look like.
I love the ones on Williams Sonoma, they are detailed and include a title, a rating, specification on cooking ability and length of ownership sections are my fave and an overall recommendation. They also have, for each review, social amplification buttons! I also love the reviews on Rent The Runway. Can't you just imagine how much value those 102 photos and huge number of reviews add? Not to mention how helpful they are to current or prospective customers!!
So what is your balance of static vs. dynamic? Is it as outsized as the second picture above? It should be.
It is the only way to win big.
#2: The Secret to Content Marketing Success.
Content marketing is all the rage these days. Everyone is contenting a lot of content about content marketing. There is even an institute about it.
On the surface it is hard to argue about the value of content. On paper, what could possibly go wrong with creating or curating content with an eye to driving sales or influencing current or future customers?
Nothing.
Except that most content deployed in the service of content marketing sucks. For two simple reasons: 1. It is actually really hard to create good content, you have to know a lot about the subject matter. 2. We simply can't help pimping ourselves/our products/our services.
When our current/potential customers encounter the fluff pieces which are glorified vehicles for our not so subtle pimping, they quickly see through both things leading to sub-optimal results. And depending on when you want to open your eyes and see reality, you end up realizing content marketing does not work.
Let me share with you my simple rule for creating content that markets itself.
When people ask me how I decide what I write about on this blog, my answer is that prior to launching this blog I'd decided a simple rule for myself. Only post content that is 1. incredible 2. of value to the audience and 3. sans pimping.

I've worked very hard to follow this rule every single time I post something. The content here – and you are the ultimate judge of this – represents what I consider to be something incredible that you will find to be of value. I have a lot of other incredible things to write, but if I believe you won't find them to be of value, it gets killed. (I wish you knew how many posts I've discarded because they did not meet that simple criteria!)
The rule impacts my work in other, big, ways. For example, if I did not have time to write something incredible of value, I've not written anything. The deadline comes and goes, if I have nothing, you get nothing. It is also the reason my posting schedule over the last five years has gone from twice a week to once a week to once every two weeks to once every three weeks. (Amazingly, the blog traffic has gone from 2k a month to 150k a month!)
Finally, I've never accepted ads on this blog. In the right nav you'll see two discreet sections with my books and my start up Market Motive. That could possibly be considered advertising. There are three posts out of 283 about my book, and just five that mention Market Motive. Very little pimping, because I respect your capability to see what I'm selling and buy it if you feel it is a fit for you. (And you have!)
I'm not unique in following the above visual. There are many, many others. People and companies. Waaaaay more successful than I can ever dream of becoming. If content marketing is their strategy, the common thread is always the same. Something incredible, of value, with the barest minimum pimping.
It is the only way to win big.
#3: Data, Data Everywhere and Yet We are an Abject Failure.
I work with many medium to large companies around the world. Every single one has an impressive array of tools, many of them even have an equally impressive array of analysts.
Yet a heartbreakingly huge number of them stink at a company level. By that I mean they might have some pockets of excellence, but overall their site stinks, their customer experience (end-to-end) is awful, and their digital strategy is, on the greatest possible day when every single star is aligned perfectly, adding 1/10th the value it should.
Why?
It is the simple combination of how each division/group of people inside, and sometimes outside (agencies, et. al.), the company are organized and incentivized (as in what metrics determine their bonus).

Acquisition is everything we do to attract traffic. Behavior covers everything that happens after the person lands on our mobile or desktop site. Outcomes are what happen just before the visitor leaves our site (money to us, satisfaction to them).
Companies have an Email team and an SEO team and a PPC team and a Social Media team and a Display team and…. many teams for acquisition. They are often measured on impressions (or worse, "connections") and clicks. Then that is all they optimize for. They take zero responsibility for crappy landing pages, or even 404s on landing pages.
Then there is the "site team." Euphemism for we will do anything to keep the site up but really all we do is launch pages that someone will ask us for and we really don't know who is coming to the site or what is driving them there and we rarely speak to marketing or agency but the site is pretty cool, we think.
Finally, there is someone in IT responsible for running the cart and checkout process. It is unclear that what their bonus is based on, but it is rarely abandonment rates or task completion rates.
Depending on other variables, there might be someone who looks at conversion rates (usually sans a lot of other context).
Each might work on their own little circle, there is no incentive to look end-to-end, or even at the overlaps/hand-offs.
So fix that.
Make sure your executive dashboards obsess about acquisition, behavior and outcome metrics. Make sure that every single report you create has acquisition, behavior and outcome metrics (download this example: Page Efficiency Analysis Report).
Force each team to think end-to-end and you will incentivize the right behavior across your company.
It is the only way to win big.
[Bonus: Download nine additional custom reports, and a VP-level dashboard, I've created with ABO as a foundation, directly into your Google Analytics account: Occam's Razor Awesomeness ]
#4: Optimize for your Global Maxima: Obsess About Macro AND Micro Outcomes!
The average conversion rate for a typical top ecommerce site is around 2%. And sadly, we are not at the top, so we tend to do worse.
When we obsess only about conversion rates on our website, the problem is that that is an obsession with just 2% of the site outcomes. We end up looking at the world through a straw, and the best we can do is a lot less than the best we can actually accomplish.

This is not to say that you should not worry about conversion. You should. But when your strategy looks like the one above, powered by looking through a straw, you'll optimize for the local maxima.
That is not terrible. It is just not awesome. Your parents will always pat you on your head and say "Oh sweetie, you could have been something. Something so much more."
And who wants that? You want to live up to your fullest potential!
That means you'll have to care about your macro-outcome, the ecommerce conversion or your lead submitted conversion or donations made to your non-profit conversion. But you'll also have to care about your micro-outcomes!
Some of these micro-outcomes will directly lead to your macro-outcome. For example, people signing up for your email marketing list will convert in the near future. Or people who create wish lists, sign up for product alerts, watch product videos today etc. They are all signaling intent to convert.
But other micro-outcomes might not be directly related to a near future macro-outcome. For example, people who subscribe to your blog's RSS feed. Or people who follow you on social media or subscribe to your YouTube channel or sign-up to volunteer for your non-profit or download your utility marketing mobile app etc. All these outcomes bring people closer to your brand, an awesome outcome.

When you measure the success of your AdWords campaigns or your email blasts or your Facebook ads or any other acquisition initiative, make sure you report your macro-conversion rate. But don't stop there. Make sure you report your micro-conversion rate as well. Teach your company to optimize their digital strategy for a portfolio of outcomes, macro plus micro. And if you compute economic value of digital – the value of macro plus micro outcomes – your career will be on the fastest possible track to fame and happiness!
Best of all, this will mean you are optimizing for the global maxima.
It is the only way to win big.
[Bonus: Learn more about macro and micro conversions as they apply to a B2B company, Texas Instruments, and a technical support site .]
#5: Rent or Own? The Optimal Social Media Investment Strategy.
This is a new trend amongst companies. Swept up in the fervor of Google+, Facebook, YouTube and other social platforms, they are massively shifting their resources (people, time, dineros) into their presence on these new platforms.
That in of itself is not a bad thing. Everyone knows there are a quadrillion people on Facebook. It is absolutely a valuable audience.
The bad thing is that all this seems to come at the cost of investing resources on efforts related to the company's website. So many companies have irrelevant posts by expensive employees on Facebook all day long (more on this below), and don't spent the little bit of money to create a mobile website. #arrrrrhhhhh
Remember, when you create a presence on Facebook, Google+, Sina Weibo, Vkontakte, you are renting.

You don't own the domain, you don't own the customer data, you don't create/own the rules, you can't influence changes, you don't have a say in how many characters you can type or how long your video can be or how much creativity you can express. You play by their rules (after all you are just renting).
This does not make those platforms any less valuable. But it is astounding silly to have your rented presence come at the cost of a platform you own!
Build your own magnificent platform first. Where you create the rules, you control the evolution, you own the customer data, you have a direct relationship with your audience, you get to decide what happens next (or if ever!), and there are no limits to your experimentation with creativity!

Once you nail your own existence, move on to nailing your rent existence.
And going forward, always forever remember the balance between own and rent. Outsized investment in own and an appropriate, demonstrated by the best social media metrics, investment in rent.
It is the only way to win big.
#6: The World's Greatest Social Media Strategy.
Why does L'Oreal Paris USA, a multi-billion dollar corporation with a marketing budget of hundreds of millions of dollars, have fewer followers than I do on Twitter?
Why is the talking about this brand metric for Avis rent-a-car less than half of what it is for my brand page (and I have 50,000 fewer Likes than they do!)? Remember, Avis is a corporation with thousands of employees in tons of countries.
Why does TravelZoo have 224k fewer Followers on Google+ than I do?
All these companies are big and magnificent, and I'm very small and inconsequential. So, why?
The answer is simple: this is their social media strategy…

They wake up everyday and, on the world's greatest channels for conversations, they shout at people. Every single post they write, every single tweet they send, is simply another variation of BUY IT NOW!
The challenge is, as the See Think Do framework emphasizes, a tiny, tiny, minority of the audience is there to buy anything. (If you need more proof, just see how poorly advertising performs on these platforms.)
Just because you are good at shouting on TV/Radio/Print/Display does not imply that that is what you do on social media. Even if you somehow manage to get a bunch of Likes/Followers/+1s, your conversation rate, amplification rate and applause rate will be pathetic.
So stop that.
These channels are awesome (also see visual #5 above). Here's the strategy that works…

Pimp your stuff sometimes – say twice a week. And if you can be clever about it, like getting your customers to pimp for you, even better.
Ninety-five percent of the time create conversations and try to add value to your customers/likers/+1ers.
Write about topics both of you are interested in. If you sell smoothies, talk about food, how to develop a great palette, travel, evolution, agriculture, the future of the planet… the topics are endless.
Provide utility. Share tips on how to make my life better. Share tips on a healthy lifestyles, exercise, wellness of children, latest relevant mobile apps…. the topics are endless.
Your customers have given you permission to interrupt their day. Don't suck at it. Be respectful of their attention. Create a warm space in their heart for your brand. Contribute something incredible, of value.
That is the only way to win big.
That's it. Six simple visualizations, and solutions, for complex marketing, analytics and life challenges.
As always, it is your turn now.
Is there a venn diagram that resonates more with you than others? Which one least reflects reality? What does your company's digital balance between static and dynamic content look like? What percent of your social contributions is BUY IT NOW? Does your company execute for visual number one or two for outcomes? How incredible and of value is your content marketing content?
Please share your wisdom, stories, critique, and praise via comments.
Thank you.

Alex Rojas Riva

Ninja Analytics, HiPPO's, Master in Digital Marketing Plan & Direction, Web & Social Analytics, Free Consultation, Mobile: +44 (0)755 2839713, Skype:janibalrojas.

I can't improve your Website by 1000% but I can improve 1000 things by 1%, if you execute my recommendation immediately or action to take care.

There are Data known known, there are Data we know we know. We also know there are Data known unknowns; that is to say we know there are some Data we do not know. But there are also Data unknown unknowns -- the ones we don't know we don't know. And if one looks throughout the web history, it is the latter category that tends to be the difficult ones.

Behavior

About Behavior

The Behavior section contains reports designed to help you improve the content on your site to meet the needs and expectations of your users.
The Site Content > Pages report shows how frequently each page on your site was viewed. Look for high bounce rates on the Landing Pages report to identify landing pages that need to be rewritten or redesigned to be more effective.
If you provide a search box on your site, use the Site Search reports to find out how successful your users are when they search your site.
If you incorporate Flash, Ajax, or other kinds of interactive elements on your site, you may want to know how your users engage with them. The Events reports provide a non-pageview based approach to tracking interactivity.

The Biggest Mistake Web Analysts Make… And How To Avoid It!

61 Comments | Print | PDF

The single biggest mistake web analysts make is working without purpose.
We work very hard. We torture SiteCatalyst. We send out a lot of data. Then we resend it again and again. And yet our work results in very little impact on the business in terms of action taken by company leaders.
Why this sad state? Almost always we dive into the ocean of data first. Sadder still, we don't ask questions later. We never ask questions.
No questions. No tie to what's important. No impact from the data.
Result? Our work lacks purpose. It is that simple.
My normal recommendation to address this supremely corrosive issue is to encourage each company to go through the process of creating a Digital Marketing and Measurement Model . It is a fantastic five step process that forces the engagement of key stake holders to produce a blueprint of why digital exists in a company, and what it is trying to accomplish.

No touching Google Analytics. No going to web analytics conferences. No tweeting for help.
Just doing the four things, in five steps above, will deliver what we lack… purpose.

1. Why should you come to work?

2. What should the focus of your work be?

3. What level of performance indicates success or failure?

4. What dimensions, if analyzed, will deliver juicy business insights?

Unfortunately a very tiny fraction of companies, or Analysts, want to put in this lifesaving effort up front.
If you fall in the "Analyst unwilling to do the hard work" category, I'm afraid I can't help you.
If you fall into the "Analyst really wanting to do the hard work but does not have the connection to Superiors, or other teams, and looking for any way out to identify business purpose" category. I have a very very simple approach for you to follow. You are going to love it.
But there are two prerequisites: 1. You are going to have to throw away the shackles, and think like a business owner. Even if you work in a multi-headed hydra called "global corporation." 2. Have the courage to move beyond the office politics/bickering, move from waiting for a savior to tell you what the purpose should be to investing some time in figuring it out yourself.
If you meet the prerequisites, and have a pinch of business savvy, we are together going to change the world!
My recommendation calls for you to take a structured approach and answer five questions. The insightful answers will help you create your own understanding of the purpose of the digital existence. You'll end up creating something very close to the DMMM above.
The result will be an astonishingly high level of focus for your digital analytics work (even on day one) and hyper-relevant insights to the business. That, in turn will simply blow people's mind (relevant insights always do), creating love for you. And love like that is hard to come by. (Conveniently that type of love also translates into a sweet raise. :)
Perhaps I've over-promised. But I'm just so excited about this process and its power to make our professional lives better.
Ready?
In my experience the best teaching happens with real world examples, rather than spouting theory. Hence, I'm going to use Credit Karma as an example to illustrate the process. I don't know anyone at Credit Karma. I'm not an expert in the credit score reporting business. So I'll be just as blind as you might be walking into any business and going through this exercise.
Here are the five questions (plus one special bonus in the end) I/you have to answer to get a very good sense of the business to bring astonishing relevancy to our data analysis:
#1. Why does the site exist?
This is the holy grail. But here's the trick: We are not looking for just the obvious answers. We want to identify as close to 100% of the purpose for which the site exists, how it makes money/gets leads/raises donations (as the case may be).
In the case of Credit Karma my first job is to identify what the Macro Conversion is. The single biggest reason for the site's existence.
Luckily except in the case of the most incompetent websites, this is easy to find. In our case it is right there staring us in the face on the home page: Free Daily Credit Card Monitoring!

Just to be sure, since I don't know them at all, I might poke around a few pages to make sure. But usually it is pretty clear.
And in this case the cool thing is that they give you one score, the TransUnion one, for free. No credit cards required to sign up! My favorite report is the Credit Report Card. Great visualizations and really great data. Sign up today! [Disclosure: I'm not affiliated with nor do I know anyone at Credit Karma.]
OK, back to being the business owner.
The next thing to answer this question, and ensure that I'm not a newbie Analyst who will only focus on 2% of the business success, I have to figure out the Micro Conversions.
To do this you'll go to the main sections of the website. You'll look for other calls to action. "Sign up for the mailing list." "Order our catalog." "Download the trial version." Et al.
After 10 minutes of browsing, I found all these valuable Micro Conversions:

Some are pretty straight-forward. Affiliate links (Take Offer, Compare Rates) that link to other sites from which Credit Karma makes commissions. Advertising on the site is a Micro Conversion (the SavvyMoney ad above with the link Manage Your Debt). The Write A Review call to action (the more reviews there are on credit cards, the more valuable the site is for comparison shoppers the more people will come and do business with them). In the same vein, completed Compare Credit Card offers is an important Micro Conversion (and a sign of deeper engagement with the site). Finally, the links to connection on social platforms are Micro Conversions as well.
Now you have a fantastic understanding of the business objective (make money via credit reporting) and the Goals (a combination of Macro + Micro Conversions).
And, I can't stress this enough, you are not just looking at 2% of business success, you are looking at 100%.
Bonus: Identifying Macro and Micro Conversions also gives you a list of Ecommerce Tracking to set up on the site, and Goals to set up in the Admin interface. You'll also note small things like outbound link tracking (using Events) to set up for social actions and ensuring all affiliate links are tagged with our company's tracking parameters.
Don't open Google Analytics or Yahoo Web Analytics yet! We have more work to do…
#2. What parts of the website should you focus on first?
One of the biggest problems we have with digital analytics is that we have waaaaaay too much data. And because the reports only show the top ten rows, we might not easily be able to see what matters.
Hence it is very important to figure out where to focus your analysis first. My method for doing that is to browse around the site and answer this question:

~ What content on the website is directly tied to driving Macro and Micro Conversions?
~ What sections of the website might be most valuable to the visitors?
~ What content areas seem very expensive to create (hence more important to measure if they are adding any value!)?
~ What cross-sells and up-sells do you see being pimped across the site?
~ What does the top nav and left/right nav groupings tell you about priorities?

You can quickly see how those simple questions help you understand what data might be the object of your analytical horsepower.
Another 10 or 15 minutes of exploring various links and pages yields the answers I'm looking for.

For me, as a lay person and not a credit score industry veteran, the most important section would be /learning. The more the website visitors are aware of how important credit scores are, the more likely they are to sign up.
This was a bit hidden but the second most important piece of content would be the Credit Simulator (/preview/simulator). I can go play with the simulation and be informed (scared, actually) of the implications of taking credit and become a more qualified lead for Credit Karma.
The other sections I found valuable, using the framework outlined in the questions above, were: /help/howitworks (no one would sign up without looking at this page, we have to A/B and MVT test this to the max), /tools (this creates a great affinity for the brand, even if people don't sign up) and of course /creditcards (if they don't sign up, let's at least get an affiliate click :).
You can quickly see how you've got a short list of things to do in the Content section of Google Analytics. The filters to apply to those reports, to understand which KPIs would be most important as you value this content.
Rather than letting the data take you somewhere randomly, let this approach put you in the drivers seat and then you take data for a ride to a specific destination. That is what being successful is all about.
Awesome, right?
#3. How smart is their digital marketing strategy?
If you are a regular reader of this blog you know how deeply fond I am of the Acquisition, Behavior, Outcomes framework. We covered Outcomes with the first question and behavior with the second. Now it's time for acquisition.
What I try to probe, without talking to anyone at the company, is how savvy the company is in digital marketing. I'm also trying to figure out all the places they might be doing advertising. I want to know if they have even a simplistic understanding of how to rock social media.

Here's my process for doing that…

~ Visit www.google.com (or Baidu in China, Yandex in Russia etc). Run a bunch of search queries with the intent of looking for the company's products and services. I'll do at least five or so brand-related queries ("credit karma reviews"), and at least ten to fifteen non-brand/long tail queries ("free credit scores," "best credit score website," "credit score reporting scams," etc.).
I make a note of: 1. Organic search rankings (rank, page titles, snippets). 2. Paid search ads (title, creatives, urls shown). 3. Competition (who comes up first consistently, ppc and organic). 4. Search Plus Your World results.
~ Visit sites like (in this specific case) Yahoo! News/Finance to see if I get display ads when I read articles or stories about credit cards, credit scores etc. Do the same with some of the top sites I can think of related to the industry (brokerage sites, financially savvy consumer sites, etc). Finally, checkout at least a couple of blogs relevant to the topic.
I'm trying to see if I bump into my company's ads (display, text, any other type). It will be a great reflection of how well thought out their acquisition strategy is, or how sub-optimal it is.
~ No business, B2C or B2B or here2there, can exist without a robust YouTube strategy. So off to YouTube to do some relevant searches to see what videos show up.
Do I see any promoted videos in the results (to control the message)? Do I discover a brand channel by the company (to create a deeper connection with customers)? How lame or awesome are their videos (you want to teach and pimp both at the same time)?
~ Social is all the rage these days and I do believe that every business of every type should have a social presence that is the epitome of conversational marketing. So visiting their Twitter/Facebook/Google+ pages is critical.
Do they have a social presence? How many followers/likes do they have in comparison to their competitors? Do they reply to questions, or just shout? Do they pimp offers or try to make people's lives better? Is there any consistency in their contribution?
One special thing I'm also checking is if they have the +1 button on their website. Search Plus Your World and the social graph has become quite important. People search now, see their friends/social graph liking/endorsing brands and pages. Those often catch the eye of the searcher more easily, sometimes, than paid or organic results.

All this goes into creating starting points for what I'll do when I get into the web analytics tool. Will I analyze Search first or Campaigns? Will I focus more on referring sources or social traffic first? Will I measure the value of YouTube first or Display ads?
Additionally the above investigation also gives me a set of insights I can deliver to my CxOs. Channels where they should exist but don't. Things they might be doing badly in Social or YouTube or wherever. Missed opportunities in Organic search or SPYW (Search Plus Your World). Things like that. And these recommendations will come from my own digital marketing sophistication (earning respect from my Senior Leaders).
Bonus: In the digital marketing savvy section I've also started to pull out my Samsung Galaxy Tab and Nexus S to preview the mobile and tablet experience of the company. If it stinks that tells me a lot (remember the year of mobile was 2010!). I'll also run a couple of quick searches on Google or Yandex or Baidu to see how the landing pages look on my mobile phone and tablet.
Super Bonus: Only for the most passionate amongst you… run a quick query in the iTunes App Store and the Android Market to see if the business exists there in the form of an application. If yes, download it. Play with it. Download some competitor offerings.
Most companies that are on the bleeding edge of digital marketing savvy are leveraging Google, Yahoo!, Email Marketing, Blog ads, Social channels AND mobile experiences AND mobile applications. The analysis above, will bring remarkable brilliance when you dive into the data. You'll take your company from bad to good in terms of acquisition-savvy, or from good to great.
#4. How well are they doing in context of their competition?
It is almost criminal to dive into doing any analysis of a company's website data without first getting a little bit of context about their competitive performance. Context after all is king .
Here one simple example of how it can be helpful. You log into CoreMetrics and you see a line traffic going up or down. Is that good or bad? You don't know. No one at the company will talk to you. Why not jump on to a free competitive intelligence tool and figure out the answer for yourself?
I'll usually start with looking at the company's data in www.compete.com (if they are US-based with primarily US-based traffic) or Google Trends for Websites . And in five seconds I'll end up with a graph that looks like this:

The above data is from Compete. I've included not just the data for Credit Karma, but also for two relevant competitors, freescore.com and myfico.com.
Initially I was wow-ed by the spike in the blue line (Credit Karma), that is quite spectacular. But then I see that it might be an industry thing, as the competitor spiked as well. Good context.
While at Compete I can also dig into a whole bunch of metrics like Visits, PageViews, udience segmentation, and so much more.
Now, I better understand visitor acquisition.
Time to understand a bit more about the visitors themselves. My BFF? Google/DoubleClick AdPlanner , perhaps the largest source of demographic and psychographic data out there.

The above data is for freescore.com. I can also quickly run queries for Credit Karma (and others) and compare and contrast the demographic profiles of people who visit the website. Are our competitors particularly stronger in some Educational categories or Incomes compared to us? What are our areas of strength?
While in AdPlanner I also highly recommend looking at "Sites also visited," a fantastic way to understand who a site's real competitors are. What are the clusters of options when people consider a credit report? This is also a great place to get ideas for websites you can show ads on, exchange links, etc.
The last stop of my journey is Google Insights for Search , your direct source for all Google organic search data from across the world. Here I particularly like to look at a metric I call "share of search." How often are people looking for the generic query for the industry, for me (/my company) and for my direct competitors?
Think of it as unaided brand recall …

Just look at that massive spike in queries for Credit Karma at the end of Dec! What the heck happened there? Great question. What where the related keywords people searched for? Check the Google Analytics reports. Was this traffic any good? Check the Google Analytics metrics. Are we going to dominate the world and crush our competitors? Time will tell!
The purpose of competitive intelligence analysis is to understand your place in the world, to highlight from an industry/ecosystem perspective what your strengths and areas of opportunity are, and to collect a list of questions like the ones immediately above for analysis in your web analytics tools.
Is that not simply orgasmic?
#5. What is the fastest possible way I can have a impact on the business?
One final thing.
I look for a low hanging fruit to fix/analyze. Something I can quickly analyze, find insights for and get fixed to show the value of data (and my employment at the company).
Here are some examples of things I consciously look for:

~ Any obviously important links that might be broken (404) or misdirected.
~ Horribly constructed landing pages for the top organic/paid keywords.
~ Something absolutely important missing from the site's information architecture.
~ A missed opportunity for promoting a micro conversion more prominently. (Why is the Credit Score Emulator so hidden, and not on the home page of Credit Karma?)
~ Overpimping of social icons when there has never been a social post (or all posts are sub-optimal).
~ No "related items" after a product is added to cart. (Aw, come on! Has Amazon taught us nothing?)
~ 17 display ads on every single page on the website. (Why, oh why must we inflict torture?)

And other such things. Depending on the website you are analyzing, and your web-savvy/UX expertise, you might find other things. But the criteria to apply is that you are looking for big, obvious broken things that can mostly likely be fixed quickly and for which the impact can be quickly measured.
You are trying to find something with a clear purpose to show the power of actions taken through data.
One of my most beloved low hanging fruit for lead gen/ecommerce websites is to identify and improve the checkout abandonment rate .
That would be measuring the efficiency of this process for Credit Karma:

For a lead gen/ecommerce website there is no faster way to improve the bottom line. The potential customer has already discovered us. They've survived our website. They've gone from consideration to purchase. Now, all that remains for us to make money is to get them through these three simple pages. Let's make sure we do that! 100% of the time! (I love being aggressive in this case.)
This is directly tied to business purpose. It is absolutely focused on something important (getting the macro conversion). It is small (3 pages), and it is very well defined. And it is easily measureable (hello my dear funnel analysis, I've missed you!).
That is how an Analyst achieves glory. Through data. Powered by a clear purpose.
So five simple questions that help you focus on the end-to-end view of the business (Acquisition, Behavior, Outcome) without ever touching the data (except CI) and help you create your own Digital Marketing Measurement Model.
What I love more than anything else is that it forces you to become the Marketer for the couple hours you'll spend on it. It forces you to think like a business owner for that time. It forces you to pull out any UI/UX chops you have.
It is rare that Analysts get to flex those muscles. It is important, though because I don't know of a single Digital Analyst who has become great without flexing those muscles.
And now, my dear, you are ready to log into your web analytics tool!
But before you do that, I have one last parting gift for you…
Special Bonus: #6. Any technical notes I can make for the future (analytics or coding)?
As I'm clicking around I also like to make note of these things:

~ Randomly view source to see if the javascript tag for the web analytics tool is there. You just want to spot check if the tool is there (for GA just do View Page Source and Ctrl F and ga.js).
I do not encourage you to do to this until much, much later, but you can use a web analytics site audit tool for more thorough checking. But don't do it now. Don't get sucked into technical implementation hell just yet.
~ Things that might hinder SEO.
For example: Link text – is it descriptive? URL structures – are they clean (as on Credit Karma) or a jumble of technical gibberish (as on www.aeropostale.com )? Exit links – are they wrapped in javascript (can't be read by search bots) or clean? How clean is the link structure? These and other such small things are both a task list and a sign of how savvy the company is when it comes to SEO.
~ When I click on various external ads (search, display, YouTube), I also take a quick peek at the URL window to check for campaign tracking parameters. So important to have them.
~ Make note of windows that pop up. If they are links to the company's blog or their ecommerce/travel reservation/lead gen platform, is it on the same domain or a different domain?
Latter means tracking challenges, technical nightmares.
~ If they have an internal site search engine, and in this day and age it is criminal not to, then I do a quick search and see if my query shows up in the url stem. For example, on this blog it would look like this: http://www.kaushik.net/avinash/?s=segmentation
This would be awesome. The "s." It means we can configure it in Analytics in two seconds (no IT begging involved) and start doing amazing internal site search analysis .
If the parameter does not exist… well, then IT begging will be mandatory. :)

Remember. You are not a technical implementer or a javascript tagger – two valuable roles. You are an Analyst. Your primary objective should be data analysis and finding insights. So the first five questions and the answers you'll find are your focus area. The sixth is a gift you can give the javascript tagger/technical implementer in your company.
That's it. My humble attempt at sharing with you everything I know about avoiding the single biggest mistake Digital Analysts/Marketers make: Execute their jobs without a clear business purpose.
If any of the above makes you feel that I hold data secondary and understanding what data is in service of first then I've succeed in my mission with this post.
As always, it's your turn now.
What are the approaches you use to identify business purpose? Do you dive into the data first, and still find insights without doing the above mentioned five investigations? Is there a strategy outlined above that you feel works better than others? What are your favorite low hanging fruits to fix for a digital business?
Please share your recommendations, war stories from the front lines, and feedback via comments.
Thank you.

Like this post? Share

Digital Marketing and Measurement Model

There is one difference between winners and losers when it comes to web analytics. Winners, well before they think data or tool, have a well structured Digital Marketing & Measurement Model. Losers don't.
This article guides you in understanding the value of the Digital Marketing & Measurement Model (notice the repeated emphasis on Marketing, not just Measurement), and how to create one for yourself. At the end you'll also find some additional examples to inspire you.
Let's go…
The root cause of failure in most digital marketing campaigns is not the lack of creativity in the banner ad or TV spot or the sexiness of the website. It is not even (often) the people involved. It is quite simply the lack of structured thinking about what the real purpose of the campaign is and a lack of an objective set of measures with which to identify success or failure.
I've developed the Digital Marketing & Measurement Model as a simple, structured, five step process to infuse this much needed thinking. Here is what each step in the process helps accomplish:

Step one is to force us to identify the business objectives upfront and set the broadest parameters for the work we are doing. Sr. Executives play a key role in this step.  Step two is to identify crisp goals for each business objective. Executives lead the discussion, you’ll play a contributing role.
Step three is to write down the key performance indicators. You’ll lead the work in this step, in partnership with a “data person” if you have one.
Step four is to set the parameters for success upfront by identifying targets for each KPI. Organization leaders play a key role here, with input from Marketing and Finance.
Step five, finally, is to identify the segments of people / behavior / outcomes that we’ll analyze to understand why we succeed or failed.

Simple, right? It is harder than you might think, “soft” work always is. Before we go into each step in detail I want to share something extremely critical. The scope/breadth the model has to cover.
A complete, and competent, Digital Marketing & Measurement Model will focus on three key areas of your marketing, and in each answer the cluster of questions provided:

1. Acquisition.
How are you anticipating acquiring traffic for your website / YT video / whatever else you are creating? Did you cover all three components of successful acquisition: Earned, Owned, Paid media? How would you prioritize each? Where are you spending most of your efforts?
2. Behavior.

What is the behavior you are expecting when people arrive? What pages should they see? What videos should they watch? Should they visit repeatedly? Are there certain actions they should take? What is unique about your effort that ties to an optimal experience for a customer?
3. Outcomes.

What outcomes signify value delivered to the business bottom-line? A download? A phone call to your call center? A qualified online lead? Signing up for email promotions? People buying your product / services ? A 95% task completion rate? A 10 point lift in brand perception? Simply put: Why are we undertaking this digital initiative?
My sincerest hope is that these questions will seed your discussions as you go through the five steps below. If your Digital Marketing & Measurement Model does not cover all three areas of your digital effort, then it is not complete. Please consider revisiting it. Don’t accept a mediocre model.
With that macro thought out of the way, let’s get going and look at a real example of the five step process to solidify this concept.
The business we are doing this for is a real estate company. I’ve picked a tough one because the main outcome is offline success. If they can create a good model then your job is much much easier!
Step 1: Identify the Business Objectives.
Ask this question: Why does your website/campaign exist? (Think of acquisition, behavior and outcomes.)
This is a difficult question to answer because it requires more thinking that you might anticipate. If you do it right at the end of step one you’ll have something that looks like this:

Identifying the business objectives mandates a discussion, multiple discussions, with the senior-most leaders in your company and working with them / sweet-talking their egos and hearts with gentle encouragement, to identify why the site / campaign / digital marketing invitiative exists.
Based on those discussions, in our case, we’ve identified three objectives: Create awareness, generate leads for the builders and highlight community events.
Here’s a great test. Your objectives should be DUMB:

Doable.
Understandable.
Manageable.
Beneficial.
If they are too out there, you'll never get anywhere. If they are too vague, nothing will get done. If they are too lame, they'll inspire no one. Go for real world, clear, executable and those that deliver value to the company (short term and long).
Are your objectives dumb?
Pro Tip: One way to ensure success is to forget that you are creating a set of videos or that you are building a site to host downloads of pdfs or that you are trying to mimic a campaign from Europe. Really, really, really think hard about why you are doing what you are doing. Get the answer from your executive/client.
Step 2: Identify Goals for each Objective.
Drilling down to identify website/campaign Goals requires critical thinking from both the Management, Marketers, and the Analysts – with Management in the leadership role.
My definition: Goals are specific strategies you'll leverage to accomplish the business objectives.
After going through some of the acquisition, behavior questions with stakeholders, here’s our model:

Clean. Has a clear direct line between Goal and each objective. Provides immense clarity.
To deliver on "Create Awareness," in this case, the site needs to support all the offline efforts along with having a relevant online traffic acquisition strategy.
"Generating Leads" comprises the twin goals of providing all kinds of information that will help potential home buyers to make their decision and to collect e-newsletter registrations as well as e-requests for an onsite tour of the model home by the builder.
Finally, "Highlight Events" is for prospective home buyers (visitors to our site). By making them happy with delightful events, at the construction site hopefully in model homes for sale, they can be converted into Net Promoters (to others) and Buyers (themselves).
These goals provide clarity, but they also contain large chunks of specific marching orders for what the Marketers and Analysts need to get done.
Pro Tip: This is super key: Macro + Micro Conversions! If the goals identified don’t cover all the jobs the site/campaign is doing then you might need to revisit your work.
Step 3: Identify the Key Performance Indicators.
Finally we get to deal with data!! I know you’ve been dying to get here. You’ll be the ideas leader here.
My definition: A key performance indicator (KPI) is a metric that helps you understand how you are doing against your objectives.
For each goal, sweat, and find the most hyper relevant KPI. This is what it will look like:

So amazing right?
I am sure your head is buzzing with all the possibilities for custom reports and things to report on, and how much clearer it is what you are supposed to do! Awesome, but hold your horses. We have two more steps to complete. Stay with me.
Pro Tip: Try to look for smart KPIs? Here’s specific guidance to help you…

Pick super awesome key performance indicators that truly reveal success or failure.
Step 4: Identify the Targets.
It is heartbreaking how few people complete this step. It is absolutely critical, in so many ways.
My definition: Targets are numerical values you’ve pre-determined as indicators of success or failure.
Why do you need targets? Consider this: You had an amazing campaign on YouTube. You got 1.2 million views. Is that great or awful? How do you decide? That is why you need targets!
Ok, so you also need them to plan your site / campaign / marketing initiative better. If you were responsible for getting 5 million visits in a month would you execute your campaign differently than if that number was 500k? Or if you were supposed to reach 1,000 CMO’s would you remember not to use Social Media as your primary acquisition strategy? That’s also why you need targets.
Targets can come from historical performance (how you did last time you / someone did something similar). They can come from other efforts (if my one hour long boring video can get 30k views in a week, should your two min peppy video get 1.2 million views?).
Seek people who are accountable (client, management, Finance), they will help you identify targets for each KPI.
Your Digital Marketing & Measurement Model will now look like this…

Now everyone knows what the company is shooting for. When you crack open Google Analytics, or other tools you’re using, you'll immediately jump with joy or weep when you see the KPI. You'll instantly know what is good and what is bad.
Pro Tip: If you have no targets then make something up. Use a number that if reached won’t embarrass you / your management / me. :) That is a good start; you can revise the number next month after you get the first blush of data. What’s important is that you never measure without having some sense of what good or bad performance looks like. The more experience you have, the better you’ll get at setting targets. Good targets.
Step 5: Identify valuable Segments for analysis.
This last part is one that is particularly meaningful to me because of its incredible value.
My definition: A group of people, their sources, onsite behavior, and outcomes.
When you log into Google Analytics or any other data source you are deluged by data and you could go in a million different directions.
Remember: We not only wanted focus, we wanted hyper-focus.
Take 10 more minutes from the key executives. Have a discussion with them about what the most important segments to focus on are for each goal.
Identify the sources of traffic, types of people desirable, their attributes, their behavior, business outcomes that they care about the most. And what customers to the site might want to accomplish. Balance for the company and the customers.
You’ll provide leadership here and if you did a great job then your DMMM will look something like this:

What groups of visitors were important? What visitor behavior is desirable? What a traffic source was Marketing focused on? Who are we trying to attract? What on our site is important – at least according to us? And more such questions are important to answer to get to the optimal segments.
Pro Tip: How to Identify Analytics Segments. Read. Act. Enough said.
Hallelujah, praise the lord you are done!
This was a lot of work, but I assure you that at this point you will thank God and your Cat that you worked this hard. You now have a structure that will guide your measurement efforts. The insights you derive will be of value because they are grounded in what’s important to the business and the leadership. And when you make recommendations based on data… guess what… action will be taken. Worth it, right?
Here's the sexiness: You now know what's important and where to start and what to focus on. Your boss/client knows what success or failure looks like and how to connect her/his business objectives to your data. Prioritized business focus for relevant data analysis!
You have the basis of a solid contract. Get the DMMM signed (preferably in blood!) so that all parties are clear on what everyone is supposed to be solving for.
Punch-line: Always, always, always work with the above "Marketing & Measurement contract" in hand.
Two Bonus Items.
Some of you might have noticed that I’d eliminated the Tour Conversions KPI in step five. That was simply to make the image in step five looks prettier. But worry not, with that KPI included our Digital Marketing & Measurement Model will have this beautiful final form…

Can we run the most fantastically actionable web analytics program in any company now? Yes we can!
One last gift for you.
When you create your own Digital Marketing & Measurement Model you don't have to use the format I've used above, you can add to it as you see fit.
I wanted to share with you a different format, and example. Below is the model for a retail e-commerce website with an online and offline presence:

 FY= Fiscal Year.

ABC= Authenticity, Benefits, Communication.

I hope that the two examples in this blog post will help inspire you to use the Digital Marketing & Measurement Model as the foundation of your web analytics efforts.
I believe, with every fiber of my being, that this is will empower magnificent success.
Good luck.

Occam's Razor
by Avinash Kaushik

Three Amazing Web Data Analyses Techniques For Analysis Ninjas

29 Comments | Print | PDF

Day in and day out we stare at standard tables and rows and convert them into smaller or scarier tables and rows and through analysis we try and move the really heavy beast called the "organization" into action.
It is hard.
This blog post has three ideas I've learned from other smart people, ideas that help surprise the "organization" with something non-normal and get it to take action. Each idea is wonderfully simple, and yet in its own sweet way makes us, Analysis Ninjas, think harder and deliver insights better.
Let's go.
Compute Actual Cost Per Acquisition Post-Facto Including Micro-Conversions.
I know that is confusing. Stay with me.
This idea, 100% of it, comes via my friend David Hughes. [He passed away recently and I miss his friendship, and our collaborations, tremendously.] From this post: Improve Search Marketing Conversion Rates through Email Registration. I'm going to redo the tables, just to make them fit the width of this blog.
David's idea is simple and genius.
Today when we measure our Cost Per Acquisition (CPA) for our campaigns (Search, Email, Affiliate, whatever), we just think of the macro-conversion and, perhaps worse, we think only of that session / visit.
Let's assume we are running www.macys.com and we got 1,000 Visitors to come to our site via a display advertising campaign. As dutiful Reporting Folks we will send this table out to reflect performance of that campaign.

$16.7 CPA might sound huge (or not depending on your margin), but on the surface it seems a lot. The flaw in this report of course is in assuming that all 1,000 visits were in play (wanted to convert / buy something). This is rarely the case.
I have repeatedly evangelized identifying all the jobs the site is trying to do (macro AND micro conversions) and then quantifying their economic value to the business. On the Macy's website of the 970 non-converting visitors, some might have signed up for a free account, some for email alerts or coupons, some opened a wedding registry etc.
If some of those 970 Visitors completed some micro-conversions, then shouldn't the CPA be on that basis rather than just the 30 orders above?
Simplifying the scenario a bit. if some of those 970 submitted an email address / signed up for price alerts and converted later then shouldn't the cost-per-acquisition include those future sales?
Say some of the Visitors did just that. What was the acquisition cost of each sign-up?

Nothing. Nice.
What will Macy's do next? Send the 100 folks the price alert they signed up for!
And what will come of it? Sales, of course.
This is a reasonable picture that will emerge.

So we got 30 orders from the original visits, and another 20 by re-targeting users via permission-based email.
What does the CPA of our original affiliate marketing campaign look like now?

A more respectable $10 compared to the original $16.7.
An immediate implication is that if at a CPA of $16.7 you were profitable, then you can communicate to your Senior Leaders that you were actually even more profitable since the final CPA is now only $10. And if you find yourself in a aggressive marketing siutation then you could even increase the bids on your display campaigns to get even more Visitors. Thanks to your clever micro-conversion and re-targeting strategy!
Lessons:

1. It is important to think in terms of micro-conversions, beyond your main objective. For the 98% of people who won't convert on your site, do you have a way of engaging them again in the future?
2. It is critical to have a robust re-targeting strategy (as in our case above). Hopefully it will be intelligent, relevant to the customers and non-torturous.
3. If you do #1 and #2 then be a dear and ensure you compute the "final CPA" of your original campaign (search or email or affiliate or social or whatever).
4. You can't do the above analysis inside Google Analytics (or even Site Catalyst or the base versions of WebTrends or CoreMetrics). You'll use Excel or a simple database (or possibly the data warehouse versions of Omniture, CoreMetrics, WebTrends).

<sidebar> Some of you might be excitedly yelling "Attribution!" at the screen. For now, just immerse yourself in the simplicity of the analysis above. I won't cover attribution here but if you have Web Analytics 2.0 jump to page 358 for my thoughts. Also remember in this case at least it was deliberate re-targeting of the initial pool of people.
</sidebar>
Command Attention, Valuable Action, By Stating Raw Numbers.
This idea comes via Kaiser Fung, from this post: Further thoughts on the Facebook business model.
In a blog post with thoughts about a graph from WebTrends, that shows click-through rates (CTRs) and cost per clicks (CPCs) on Facebook. Kaiser made this simple insight:

"What does a 0.01% CTR mean? Yes, that's 100 clicks per 1 million ads shown to Facebook users."

Let me restate that astonishing number. If your ad shows 1,000,000 times, you get 100 clicks!
And of course that's clicks, not conversions.
It caused my eyes to open wide.
That is astonishingly low.
Somehow when someone tells you "Facebook's ads CTR is 0.01%" you don't quite get it. I mean, it does not feel pathetically minuscule, as it should.
I have championed the contextual use of raw numbers to deliver insights, especially when using Averages, Percentages and Ratios. [See: Actively Avoid Insights: 4 Useful KPI Measurement Techniques]
Yet the 0.01% number did not make the impact on me it should have. And that is exactly the problem when you present conversion rates (also pathetically low on every single website on the planet) and other such metrics.
So make sure you show raw numbers.

The first number might not get your management team to take any action; it just does not evoke any feeling.
The second set of numbers might get someone to scream: WTH!
They might ask:

1. Are we showing the wrong ads on Facebook?
2. Are we using any intelligent ad targeting strategy or just randomly showing ads?
3. If we double our budget to 2,000,000 impressions is there even relevant inventory (desired demographic / users) on Facebook for us?
4. Would it be worth it?
5. Why do we suck so much? Is it us? Is it Facebook?

All really great questions — ones that you have to find answers to as a Marketer and an Analysis Ninja. Answers that will help your company improve your Facebook advertising strategy, or quit.
Lessons:

1. Big numbers are not your enemy, especially if they lead to tiny numbers.
2. Resist the urge to turn everything into an average, percentage, ratio or a compound metric.
3. At least one person will tell you that 1,000,000 impressions is great branding. Tell them that branding is measurable and you can prove them right or wrong so you don't have to take their word for it. [See: Brand Measurement: Analytics & Metrics for Branding Campaigns]

Makes sense? If not please share your thoughts using the comment box below.
Either way, remember that your job is to divert people from becoming lulled into a false sense of everything's okay. Scare them into paying attention and asking you tough questions.
Face Reality By Computing "Convert-able Audience" & "Real Conversion Rates."
This idea comes via Thomas Baekdal, from this post: Converting Traffic to Subscribers.
In it, Thomas postulates that even if you have 1,000,000 Absolute Unique Visitors to the website, that does not mean that your possibly "convert-able" audience is a million.
Some people will visit once and never again. That was not an audience that would have converted, ever. For example, the link above is to Baekdal Plus. I pay $49 per year to access that premium content because it is so good. Many of you may not want to pay for content on the web. So for Thomas, not all the Visitors from the above link are actually in play for conversion. [Though I wish they were.]
So it is imprudent to count those folks; better to only count returning Visitors.
Then, some content attracts traffic, other content actually is "valuable and will convert people into subscribers." Thomas's guidance is to only count the latter in the in play for conversion bucket.
Now you can calculate the "convert-able" audience. In Thomas's example here's how his picture looks:

(1,000,000 less the 63% one-time Visitors) less the 20% valuable traffic = 74,000.
Possible convert-able audience = 74,000.
Real audience you even have a remote chance of converting: 74k.
So small, right? After starting with a million.
I rarely see Web Analysts doing this simple exercise and educating their Senior Leadership of this harsh truth. We assume every single person who will visit www.tesco.com is there to convert. Every single person who visits www.etsy.com is there to buy. Our conversion rate calculation, Orders/Visits (bad version) or Orders/Visitors (better version), reflects that, sub optimal, mental model.
We show our leaders that we suck more than we actually do by computing conversion on the basis of All Visits (bad version) or All Visitors (better version).
If Thomas has 3,700 conversions in a month, we would normally report that as 0.37% conversion rate. [(3700/1000000)*100]
Of course, the reality is that the conversion rate was 5%. [(3700/74000)*100]
Not that 5% is orgasmically higher. But it is more reflective of the truth than 0.37%.
You would take one set of actions with 5% and a completely different set with 0.37%.
Compute your "convert-able audience." Please.
Use whatever common-sense approaches you can find.
In a post written in Nov 2006, I presented a similar thought (though in a different context than Thomas). [See: Excellent Analytics Tip #8: Measure the Real Conversion Rate & "Opportunity Pie"]
My graphics were a lot less sexy in comparison to Thomas's.

The idea was to get you to identify your "Real Conversion Rate", by identifying your "Opportunity Pie."
My recommendations were:
Throw out everyone who bounced, just for now, and also if you use log files (ohh those were the days!), then throw out "visits" by robots / junk. That gives you a rough idea of your "Opportunity Pie" (convert-able audience).
Or
If you have a qualitative survey deployed (with the three greatest survey questions ever), then throw out the percentage of Visitors who do not state their Primary Purpose as visiting your website to "buy" or "research products and services" (I generously assume we can convince the latter bucket to buy through amazing marketing on the site). So now you know just the people for sure in play and possibly in play.
This second path will also give you a great rough idea of your "Opportunity Pie" (connect-able audience).
My recommendations were different from the ones Thomas is using. But both reach for the same goal: To get you to understand that not every single Visitor will convert, and you should know, even roughly, how many are in play / convert-able.
Perhaps you'll come up with your own rules. You might throw out everyone who was there to check Order Status. Or those that logged into their account to update settings. Or those that only visited the /blog/ directory. Or the Social Media of course they will never every buy but eat our bandwidth daily digging diggers!
As long as they pass the common-sense filter, go for it. You'll be earning your Analysis Ninja chops, and delivering something extremely valuable to your management team (even if they perceive it to be a cold bucket of water on their faces, the first time).
Lessons:

1. Don't scam your Senior Management by lulling them into believing every Visitor is convert-able.
2. Ignore the standard Conversion Rate definition in Google Analytics, Omniture, WebTrends, CoreMetrics, whatever else you are using. Focus on People. (Unless your business model is that everyone must convert, and does convert, on every Visit.)
3. You might get resistance when you first present the "real conversion rate" or "convert-able audience" metrics. Worry not. Charge forward. Good will come.

After the initial shock, your Management team, if they are smart, which I am sure they are, will ask you this: "So what can we do with the majority of the traffic on our website that is not convert-able?"
Preen proud as a peacock; this is your moment of greatness. Tell them why having thoughtful micro-conversions is so important on the site. Tell them you are going to compute the micro-conversion rate for the non convert-able audience. Tell them that with some of the non convert-able audience you'll hence establish a longer term relationship: with some you'll just hope to create delight and make them your recommenders, and with others still you'll do re-targeting and use David's method (all the way up top of this post) to reduce cost-per-acquisition.
All really great business outcomes.
In a nutshell. the goal is not to abandon a majority of your traffic. The goal is not to just ignore all the bouncers (fix that, tips here: Six Tips For Improving High Bounce / Low Conversion Web Pages). The goal is not to be depressing. The goal is to face reality, give it a hug and then figure out how to kick things up several notches.
Are you Ninja enough to accept that challenge?
Of course you are. You read this blog! : )
Know that I'm rooting for you.
Okay, now it's your turn.
Does your company do re-targeting to captured email addresses? If not, why not? If yes, then do you compute real CPA? Have you computed your "convert-able audience?" Is it 100% of your website Visitors? When was the last time you used raw numbers to shove a dose of reality in front of your Senior Leaders? Are there other techniques you've used that worked?
Please share your Analysis Ninja tips with the rest of us Ninjas-in-training using the comment box below.
Thanks.

Like this post? Share it: