Companies are increasingly using analytics tools to track customers' online behavior and uncover problems and opportunities.
By Cynthia Clark, published 01/09/2012 in 1to1 Magazine
As consumers and B2B customers alike use online tools to research and purchase products, they leave a trail of valuable data in their wake. This goldmine of information on customers' online activity is prompting a keen interest in Web and social media analytics among companies that see an immense opportunity to better understand their customers and prospects. "The aim is to provide users with a more engaging and relevant experience that makes them browse more efficiently and therefore stay [on the company's website] longer," says SiteSpect CEO Eric Hansen.
Forrester analyst Joe Stanhope argues that the tempestuous financial climate is another reason companies are refocusing on analytics. "We're technically out of the recession, but it's been a slow recovery," he says. With tight budgets, companies want to make sure every dollar goes towards optimizing their marketing strategies. Cognizant that Web analytics can help identify problems and opportunities, companies are increasingly adopting tools to track customers' online and social behavior.
However, some organizations balk at the prospect of embarking on a complex Web analytics project that aims to compile data from across online touchpoints. Experts recommend starting with basic tools that provide a broader view, and then incrementally adding deeper analytics for more granular insight. Here are four common metrics companies can use to get started:
- Determine bounce rate: Simply getting a person to visit your website isn't enough. If customers are visiting a company's homepage and not exploring deeper, there's a problem. Gartner research analyst Bill Gassman says even basic tools like Google Analytics are a place to start when looking to determine bounce rate. He also recommends building funnel reports that give a visual of where customers are falling off, pointing to areas that require improvement. It's also important to ascertain which customers have business value, why they're on the website, and what they're doing. This will help determine which customers to focus on for retention efforts.
- Replay customers' online journey: The buying journey is not always straightforward. For example, customers might start off on a company's website, even choose items that they want to buy, but instead of making a purchase, abandon their cart and move on. It is crucial for a company to understand why this happened, and whether the customer encountered a hurdle at some point during the process that caused him to abandon his purchase. Quaero Director Of Analytics Roman Lenzen uses the example of a customer looking for a hotel room who goes back and forth from one hotel website to another. "Understanding behavior gives companies more insight into who the customer is, what he's looking for, and when's the best time to communicate with him," he says. Gassman says a good tool to determine the reasons that customers abandon a site before completing a purchase is an application that allow analysts to replay customers' sessions and understand any frustrations or stumbling blocks customers faced when using the website.
- Measure campaign attribution: Today's channel-hopping customer is a complex being who doesn't think twice about using different media for the same purpose, for example, using a laptop, smartphone, and tablet to browse the Internet and shop online. In some cases customers will use several channels for one purchase; perhaps researching a product on their smartphone, but completing the purchase using their laptop. Forrester's Stanhope says companies are trying to understand the entire digital footprint of their customers and prospects. "Marketers want to understand which channels actually make a difference and what combination of channels works." Attribution analytics are designed to help marketers understand which of their marketing efforts are working and which aren't. Web Metrics Guru founder Marshall Sponder says many companies are combining several different metrics, like bounce rate and open rates, to get a more holistic picture.
- Track social media impact: Using dashboards for measuring sentiment and mentions, as well as the impact of that social activity, are essential to tracking customers' online activity. According to SiteSpect's Hansen, the objective of social media metrics and monitoring is to understand how a brand is influencing users. However, influence is "murky" and difficult to measure, he warns. But "when done right, social media analytics is the holy grail," says Scott McCartney, eClerx's principal of sales and marketing services. Gassman of Gartner cites as an example a chocolate manufacturer that was at the receiving end of criticism over social channels and by using analytics determined that rather than harm the company, the negative comments were bringing in new business. "Hadn't they known that, they might have reacted in a different way and tried to squelch something that was working in their favor," he says.