Visitor Intelligence News - February 2002 ======= ============ ==== ======== ==== Welcome to the latest edition of Visitor Intelligence News, the electronic newsletter from Site Intelligence Ltd. In this issue we take a look at measuring the performance of a website: how do you assign a financial value to your online activities? Also we have three news items: - New research available: "Statistics or Intelligence?" - Site Intelligence releases VBIS version 2.0 - Website Analytics Conference, London, April 24th 2002 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - | This is Site Intelligence's electronic newsletter. | | Newsletter contents are copyright (c) 2002 Site Intelligence Ltd. | | You are receiving this email because you subscribed via our website:| | http://www.site-intelligence.co.uk/ | | To unsubscribe or to change your subscription details, contact us | | at: newsletter@site-intelligence.co.uk | - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - NEWS: NEW RESEARCH ON VISITOR INTELLIGENCE IN THE UK RETAIL SECTOR In September 2001 Site Intelligence commissioned a survey of major (FTSE 350) retail companies to determine how UK businesses are tracking and analysing website visitors. The research is now complete and the full report "Website Visitor Analysis - statistics or intelligence?" is available on request via our website www.site-intelligence.co.uk. Major findings include: - Many organisations (18%) still have no visitor analysis at all - The majority of businesses rely on simple tools which provide primarily technical information - Many e-business strategists do not appreciate the limitations of their current visitor analysis tools and so miss out on valuable marketing information NEWS: VBIS VERSION 2.0 RELEASED Site Intelligence is pleased to announce the availability of VBIS Version 2.0. This is a major update to our product range adding several important new features. For the full announcement, visit: http://www.site-intelligence.co.uk/v2 NEWS: WEB ANALYTICS CONFERENCE, LONDON, 24th APRIL 2002 You can meet Site Intelligence at the Web Analytics conference in London on April 24th. We will be presenting a recent case study on the use of VBIS by the Pertemps Group (the UK's largest privately-held recruitment company). The conference organisers are Henry Stewart Conference Studies. For full details, visit: http://www.henrystewart.co.uk/conferences/april2002/E02112/index.html or e-mail the organiser: kierono@henrystewart.co.uk. FEATURE ARTICLE: WEBSITE PERFORMANCE MEASUREMENT -Introduction- Your website is a valuable part of your business. But just *how* valuable? How do you measure and quantify the value of the site? For a site whose only function is e-commerce, sales revenues provide the primary measure of success. But few sites have e-commerce as their sole business purpose. Websites provide benefits in other ways, for example: 1. Revenues from online marketing leading to an offline sale - customers who use the Internet to browse and select products online but who transact offline, e.g. by telephone; 2. Cost savings by 'self service' transactions - e.g. providing after- sales support information online rather than via a contact centre; 3. Brand building by providing accessible marketing information to the online customer. Those are all important benefits for your business. But how might you make these benefits tangible? It is possible to obtain accurate measurements of most business benefits that a website delivers in hard-edged financial terms. The rest of this article will look in general terms at how this can be done. -Measuring self service transactions- It is typically much cheaper to deliver information online than via offline methods such as post, fax or telephone. So whenever someone uses your website to obtain information instead of calling or writing, there is a cost saving to your business. For simple, single information requests it is easy to measure this cost saving. For example, if your website provides an annual report in PDF format, each successful download of this annual report potentially saves your business the cost of printing and posting a printed copy. If the information that you provide online is split over many separate pages it may be harder to determine the cost saving. In this case you may need to make an approximation. For example, you might assume that any visitor who spends more than 10 minutes in the "corporate" area of your site and who accesses more than 5 distinct pages would normally have requested a company brochure. You can then count how many visitors each day meet this criterion and multiply by the cost of sending out a brochure to obtain an estimated cost saving. Another form of self-service transaction is answering product questions using the internal search engine on a site. If you measure the number of visitors making *successful* searches for this type of information, you can assume that most of these people would have called your helpline had the website not been available, and so calculate a cost saving. For example, if on average there are 150 successful information searches per day and it costs £2.60 to handle an average helpline request, this aspect of your website is saving around £12,000 per month. Note that *unsuccessful* information searches are likely to generate either an unhappy customer or a call to your helpline. Studying these unsuccessful searches and looking for ways to improve the site so that a higher number of them can be successfully dealt with online is a quick way to deliver extra cost savings. -Offline marketing benefits from the website- Some customers will use your website for research and then complete a transaction offline, for example by telephone. How can you measure the business benefit of the website in such cases? One way is to regard your online product catalogue as another form of "self service" information. It is much cheaper to provide up-to-date product information online than in a printed form. For example, suppose you have a product catalogue with, say, 1000 product lines, available both online and in a printed form. The online catalogue may replace a printed catalogue costing £5 or more per copy. But for an online catalogue occupying more than 1000 separate HTML pages, how do you put a value on its total usage? A good measure is to look at how many catalogue pages are viewed by an average online buyer prior to a purchase - keeping in mind that it may take several visits between first visit and eventual purchase. Dividing the total number of page views on your product catalogue by this average gives an approximate measure of how many printed catalogues you would have had to distribute to obtain the same exposure for your product range. For example, if the average buyer views 40 product pages prior to their first purchase, and you have a total of 4000 views per day on your product pages, then your website is providing the equivalent of about 100 printed catalogues per day. If each printed catalogue costs £5 to produce that is a cost saving of £15,000/month. An alternative way of measuring the offline benefit of online marketing is to survey your offline customers and ask whether the website formed a part of their decision to buy. Whilst this requires primary market research, only a relatively small sample is needed. If you compare the number of offline purchases influenced by the website with the number of visits to the product catalogue within a given period, you can obtain an accurate estimate of what fraction of online visitors go on to make offline purchases. You can then track this on an ongoing basis without the need for further primary research - perhaps repeating the customer survey periodically to ensure the calibration remains valid. So for example, if your survey finds that 10% of your offline customers used the website as an important part of their decision to buy during a two day period, and you had 20,000 visits to the product catalogue in that same time period, then each 100,000 new visits to the product catalogue are generating the equivalent of 1 day's offline sales. -Conclusions- This article is a short introduction to a complex subject. The key point is that most websites have substantial business benefits over and above sales revenues from online transactions, and that techniques exist to measure these additional benefits in financial terms. Armed with this more complete assessment of the business benefits of the site your business is in a better position to make decisions about website operations and strategy. NEXT ISSUE The next issue of Visitor Intelligence News will be in approximately six weeks' time. If you have any questions or comments about visitor intelligence issues which you would like us to address in future issues, please email the editor: newsletter@site-intelligence.co.uk. SUBSCRIPTIONS / BACK ISSUES To subscribe to Visitor Intelligence News or to access back issues, visit our website at: www.site-intelligence.co.uk/vin. To unsubscribe or to change your subscription details, email: newsletter@site-intelligence.co.uk.