Magnifying Glasses, Microscopes and Web Analytics.

We have been talking to and working with a lot of companies this year for web analytics, and an interesting trend has been emerging with the executives that we are dealing with. Most digital decision makers we talk to either want to have Napkyn deliver ‘magnifying glass’ focused consulting on a few critical business metrics every month, or they want us to pull out the microscopes and look for new revenue potential in the specifics of their data.

In understanding these two types of executives, their motivations and ultimate goals, we can quickly see what value a good web analyst can immediately bring to an organization.

Executives who are responsible for a digital channel tend to fall into one of two types:

Analytics for performance management (macro level analysis) : Macro executives view WA data as a set of health metrics that can be used to understand the digital business. Their ultimate goal is to have a small set of business critical metrics that they can monitor to assess their online success. An example of this would be Patrick Byrne at Overstock, who says that he continually monitors their net promoter score as an operational success metric.

Analytics use in the Internet Retailer 500: Interesting Findings

Like any fast growth company, we use cold calling at Napkyn as a way to start off long term relationships (and sometimes get hung up on). We take pains to follow the number one rule of cold calling: Never waste anyone’s time. The best way to follow this golden rule is to do some homework on a company before you call them.

Which leads to today’s blog post. After this recent article profiling the impact we have had at Scentiments (#384 on the IR 500) we have been signing up new customers across the IR 500 who want to better understand their data and grow their sales.

So we are reaching out companies with under $75 million revenue (#s 315 to 500) on the Internet Retailer 500. In the interest of making every sales call useful for us and the companies we’ll be calling I have been profiling analytics tools usage.

I was so intrigued with the results I did some rough analysis to share with readers of this blog. Feel free to ping me with agreement or hate-mail on my findings.

Napkyn Featured in Internet Retailer

It has been a crazy few months of growth, and today Napkyn was written up by Internet Retailer, the leader in eCommerce news.

One of our clients, Scentiments.com (number 384 on the IR500) was featured in a story where they discussed the revenue impact that ongoing analysis has for an eCommerce business.

Segmentation and Conversion: Closer to the Heart

In a previous post I referenced the importance of considering only ‘convert-able’ traffic when looking at a goal conversion rate, i.e. only look at US visitor data if you don’t ship or service outside the US.

The reason that you always look at conversion when analyzing web data is because it allows you to always answer the “So What?” questions you receive when talking about data.

Lets use a few made up 'boss conversations' to illustrate:

The best things in life are free....kinda.

One of the most interesting things about working at Napkyn is that every discussion with a prospect or new customer is a fascinating one. The reason is that every serious owner of a web presence, whether is it a store, lead gen site, non-profit, or even blog is running analytics. Because these analytics tools are only 2% utilized, each discussion we have tends to be informative (for both sides), and interesting, aligning different reports with different unique business requirements.

While every business we talk to has individual needs, there are definitely questions that are pretty standard. A few of them have been discussed in the last posts, but today's post deals with a biggie:

Should I use a free analytics tool, and which one should I pick?

This is a topic worth a book, not a blog post. In order to keep this interesting (and under 20,000 words, I am going to do two posts on the issue. This one will be on the biggest points to consider when examining free analytics tools, and the next will be a discussion and comparison of the ‘big two’ of Google and Yahoo’s analytics tools. (before I start getting emails with suggestions of other tools that should have made the list, finish reading the post....explanation to follow)

There are a few high level points that should be considered when thinking about free analytics tools:

Why bounce rates are important...and not important.

There’s nothing like a solidly contrary title to start off a web marketing blog. One of the most fascinating and frustrating things about web analysis is that every metrics is relevant in certain contexts, and irrelevant in others. Depending on your business and the segment of traffic we are examining, metrics like time on site, page depth of visit, even goal conversion are totally different in terms of importance.

The example this blog will be using is bounce rate.

According to the Web Analytics Associations standards document, bounce rate is the ratio calculated by dividing single page visits by entry pages. In plain english this means that a bounce occurs when someone has a single page session. They entered your site on a specific page, and then left the site without going any deeper.

Your overall bounce rate number is the percentage of people who had a one page visit to your website.

I have had discussions with multiple firms in the last few weeks who were concerned about their ‘bounce rate’ numbers, specifically the overall number.

Overall bounce rate numbers are at best a health metrics for your web business. On it’s own it doesn’t really mean anything, but it can be indicative of areas of interest that actually do mean something.

Example 1#: One of the firms I am working with asked me to examine bounce rate issues as they were well in excess of 50%. I put together two quick segments, one for their ‘true conversion’ segment (they only sell in North America) and one for ‘rest of world’. The bounce rate for their true conversion segment was much lower than rest of world.

So when you look at it, high bounce indicated success. They were able to relay information to non-prospects that allowed them to move on and not waste their time. They were also able to relay information to real prospects to let them know they should stick around and engage the site.

Example 2#: An eCommerce company I work with asked me to examine bounce rates as they were super high, in excess of 80%. As bounce rates are a combination of pageviews and first page of session data, a good place to start to see real numbers is under “Landing Page” reports (which is what Google Analytics calls this type of report).

Over half of all visits started on the homepage, and the bounce rate was much better than expected at around thirty percent. The other half of their traffic initiated visits on something like 27,000 other pages within the site...and all of them had bounce rates in the high nineties! It turns out that this site generates a ton of natural search traffic from visitors searching for very generic non-branded terms (think ‘jogging pants‘ instead of ‘Roots Yoga pants’), which implies a lack of buying intent in the visitor.

So in example one, bounce rates showed that the website was doing a good job at speaking to its primary stakeholders. In example two, bounce rates helped identify a significant underperforming segment of traffic in unbranded natural search visitors.

Moral of the story: Bounce rates are important as early warning signals that allow you to start asking questions of your analytics. Bounce rates are not important as a success metrics for your website.

Cheers,

Jim

This week’s takeaway: Look at your overall year to date bounce rate in your analytics tool. Make a list of the top three reasons you think you have this rate, and see if you can prove/disprove with data.

Your True Conversion Rate: A better way to look at goal conversion

If you ran a telemarketing company booking attendees for a conference, would your success rate depend on the people on your list, or every person in the world with a phone?

If you were a car dealership, would your close rate be based on people who came into the dealership, or everyone in town with a driver’s license?

Fairly easy answers. Let’s start applying the same principles to your web business.

When you open up your web analytics tool, one of the first number you look at (or should look at) is your conversion rate. Your site has a defined goal, regardless of whether you sell something direct; generate leads, names or donations.

This goal conversion number most likely is generated by answering this question:

What percentage of all the people that came to my website completed a defined objective.

This doesn’t take into consideration the fact that many of these visitors are unable to complete this objective at all…and frankly you don’t want them to.

Quick example: Let’s say that the car dealership mentioned above had a website, whose goal was to generate names and requests for contact from a sales person. This dealership really only wants to generate names in the defined geographic region in which they can sell cars. When then does their goal conversion rate include visitors from Asia? They won’t be buying a Passat in Texas any time soon.

eCommerce conversion numbers suffer from the same issue. If you don’t ship outside the continental United States, why does your conversion rate include every visitor in the world? Not only does this make your numbers inaccurate, in many cases it makes the goal conversion numbers lower than they should be.

I was doing some work last week for a new client whose primary goal is signing up for trials of their software online. While anyone can sign up, their exclusive sales focus is on the North American Market. After creating a quick custom segment in Google Analytics, it was easy to see how they were really performing at achieving this goal.

Once you know what the purpose of your online presence is, think about who you want to achieve it. The associated reports might surprise you, and delight your boss.

Cheers,

Jim

This week’s takeaway: Try building a filter in your analytics tool around your primary conversion segment. If you need some assistance, drop us a line.

Feelings – Nothing more than feelings…

Welcome to the Napkyn blog. It has been an exciting month, with new clients coming on board, a brand new website coming out within the week and fantastic feedback and results on our unique approach to understanding your digital business.

All the work we have been doing at Napkyn during this recent period has been executed alongside a clearly defined plan. To some extent, we know (give or take a little) where Napkyn is based on our 2-year plan, and what we need to be doing to meet and exceed our targets.

I know, that’s “business 101” stuff.

The reason I mention all this is because this level of planning, reporting and analysis is still sorely lacking for most companies at the digital level.

Every day I talk to business owners and executives who are still focusing on traffic generation and website uptime, and making all other decisions based on gut-checks and guesses.

One company I am in talks with is a fast growing pure play retailer in the apparel industry. They have had substantial year over year growth in sales because of their quality product and attention to customer service. However in a discussion a few weeks ago, their CEO asked me if I thought they should terminate the agreement with their search marketing company because he ‘felt’ that their results had been slipping.

From a seasoned executive who knows his inventory to the product and calls customers personally, this is a pretty odd question to ask. The reason was because they had no historical understanding of what this vendor had accomplished and no baselines set when they came on board. Is this simply because the economy is poor right now? Would you be in worse shape if this vendor hadn’t been driving qualified traffic? Are they a wasteful spend?

A holistic approach to digital analysis is vital for any business that spends more than a dollar a month online. Otherwise you don’t know where you came from, and you sure won’t know where you’re going. Thousands of dollars will continue to get spent on nothing more than feelings.

Cheers,

The Napkyn Team

This week’s takeaway: When you make a major change to your business, like adding a new vendor, establish some firm baselines for metrics they are supposed to influence. It will help you ‘feel’ a lot better once you have to start justifying the bills.