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THIS ISSUE:
In the next issue
Measuring the immeasurable:
Woolly measurements and why you should knit them
into your e-business strategy
In Brief
The self-study language learning group, Linguaphone
(www.linguaphone.co.uk)
has appointed Site Intelligence to provide website
visitor intelligence.
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Getting the complete picture |
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The
combination of website activity data and information
from a customer database is an extremely powerful
marketing mix. At the moment, most companies are
failing to exploit this combination.
Those trailblazing companies that are among the
first to see a complete picture of their customers
are using the information to find new ways of making
their website marketing more effective and getting
on an edge over their competitors. Are you one
of them?
Websites are unique among marketing channels in
providing information about people who browse but
don't transact - and who usually account for the
vast majority of traffic. These people would normally
leave no trace in a company database. By analysing
online window shoppers, companies can find out what
turns a browser into a buyer and begin to look at
their patterns of interest.
Once a visitor completes an online transaction,
by registering or making a purchase, a richer picture
emerges. If you can link this more detailed customer
data to online browsing behaviour, some extremely
valuable insights can be obtained.
Let's look at an example. Here are a selection of
measurements taken from a monthly management report
for a typical e-commerce site. The site sells books,
electronic items and other small consumer durables.
Take a moment to consider what these numbers tell
you.
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e-commerce activity in August 2002 |
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| Number
of visits by registered users |
174403 |
| Average
value of each purchase |
£20.86 |
| Fraction
of visits leading to a purchase |
2.4% |
| AveAverage
spend per visit |
£0.50 |
Amongst other things, the figures show that just
2.4% - around one in 40 - of visits to the site
result in a purchase. (This conversion rate is typical
for an e-commerce site.) The numbers in the table
are certainly interesting but they don't really
provide much increased understanding of the site's
customer base. If you were the marketing manager
of this site, it's unlikely that they would help
you to improve its performance.
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Now let's see how additional customer information
can be used to provide a richer picture. For this
site, users are asked for some personal information
during the registration process. In particular,
information about the user's age is gathered and
stored in the registration database.
If we take the previous report and break down the
measurements by age range, we get a much more informative
picture. Again, take a few moments to review these
numbers and see what they tell you:
| e-commerce
activity in August 2002 |
| Age
group |
Number
of visits by registered users in this age
range |
Average
value of each purchase |
Fraction
of visits leading to a purchase |
Average
spend per visit |
| <25 |
58271 |
£13.45 |
3.5% |
£0.47 |
| 25-45 |
37300 |
£20.97 |
2.0% |
£0.42 |
| 45-65 |
73473 |
£32.47 |
1.8% |
£0.58 |
| 65+ |
5359 |
£17.56 |
1.4% |
£0.25 |
| TOTALS |
174403 |
£20.86 |
2.4% |
£0.50 |
The only difference between these two reports is
that the second is broken down by age category.
But this simple change has provided a lot of valuable
information. For example:
a) The 'under 25' age group are much more likely
to complete a purchase online during a visit to
the site (the conversion ratio for this group is
3.5% versus the 2.4% average). However, their purchases
are typically of lower value than the average (£13
rather than £21 - 36% less).
b) The '45-65' age group spend significantly more
in an average purchase than other groups (£32 versus
£21 - 56% more).
Is this extra information useful? Absolutely! With
these insights you can make immediate improvements
to your marketing strategies.
For example: the 'under 25' group are more likely
to buy but their purchases are of low value. So
target them with an email promotion designed to
increase the total order value - for instance, a
package deal offering a discount for 3 or more items.
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The '45-65' group, on the other hand, are less likely
to purchase but spend much more when they do. So
you might want to carry out some promotions specifically
targeted at acquiring new customers in this age
group - for example, print advertising in magazines
aimed at this group. Acquiring new customers in
this '45-65' age group will be far more lucrative
for you than acquiring new customers in the '65+'
group.
This is just one example of what is possible by
using website browsing data and customer information
together. The insights from this type of analysis
can enable big improvements in marketing effectiveness.
Given that the technique is so powerful, why don't
more organisations use it?
One reason is that technically it is more complex
to analyse data in this way rather than to look
at website activity alone. So it is beyond the capabilities
of most off-the-shelf website reporting tools. But
affordable software tools now exist that take it
in their stride to link browsing data and customer
databases, making the results easily available to
marketing teams. So the technical barrier can easily
be overcome.
Your website is an important marketing tool. A website
reporting system which links browsing behaviour
to customer data will give you unprecedented insights
- and, more significantly, enable you to make dramatic
improvements in the performance of your business.
Visit www.site-intelligence.co.uk
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Getting to know you – Wellbeing.com
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Boots
the Chemist's online presence - Wellbeing.com -
is to undergo a revamp, in order to gain a better
understanding of its customer base and improve its
communications strategy.
Site Intelligence has been appointed to analyse
the effectiveness of the website and its appeal
among its key customers, as well tracking the success
of Wellbeing's email marketing campaigns amongst
potential and existing customers.
The Wellbeing site was established in early 2001. According to Chief operating officer Mark Dearnley, the link with Site Intelligence is the next logical step in the development of the website. "We want to understand the journeys people make on the website as a collective, not as individuals. We intend to have a better knowledge of journey management, to inform our future investment strategy," he says.
To enable Wellbeing to achieve this, Site Intelligence has installed its Visitor Behaviour Information System (VBIS) software. The software integrates seamlessly with Wellbeing's existing content management system and customer database, giving additional customer information.
"The integration of VBIS with Wellbeing's existing systems means that we can track which of our content areas and 12,000 products are gaining most interest online, by linking the information the software collects with our existing product catalogue identification numbers on a daily basis, " Dearnley explains.
The results of the analysis are easy to read and interpret, using the unique VBIS SiteViewer, which is included in VBIS version 2.0.
The VBIS SiteViewer provides a graphical map of visitor activity and navigation around a website. You can clearly see where the most valuable visitors are coming from and identify any bottlenecks in the navigation process. It also illustrates any level of detail, from a general overview of the whole site, to an in-depth view of individual areas - even down to the level of a single product page.
John Woods, chief executive of Site Intelligence, says: "Wellbeing.com has seen the benefits of the easy and flexible database integration capabilities of VBIS, which means that website activity can be linked to product and customer databases, to provide a complete picture of marketing and sales activities."
Visit
www.site-intelligence.co.uk
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A chance to learn from the experts! |
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Site Intelligence, the UK specialist in the collection,
measurement and analysis of visitor behaviour information,
is a pioneer in the fast-moving field of website
visitor intelligence.
What is it and how can it transform your e-business
activities? In order to introduce visitor intelligence
and its real business benefits to senior decision-makers,
we are holding a series of Executive Briefings throughout
the UK.
A very successful event was held in Edinburgh on
25 September at the Institute of Directors.
Our next Briefing will take place in London on 29
October. Thiss event - originally scheduled for
2 October but postponed due to the coming Tube strike
- will be held at the Institute of Directors in
Pall Mall.
If you would like to attend, please click below
for more details and to register free of charge.
Look out in future issues of Visitor Intelligence
News for information on further Site Intelligence
events.
London: morning of 29 October at the Institute of
Directors, Pall Mall
::
REGISTER
Visit www.site-intelligence.co.uk
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Hurol Inan is an Australia-based e-business expert
with a background in management and technology consultancy.
This book, his first, seeks to provide a comprehensive
introduction to website measurement. It is targeted
at the non-technical reader and concentrates primarily
on business, rather than technical, aspects of web
measurement.
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“Measuring
the Success of your Website”
by Hurol Inan
Published June 2002 by Prentice Hall
Buy from Amazon |
The book opens with a discussion of why website
measurement is important and a warning about how
relying on basic metrics - such as hits and page
views - is dangerous. Inan defines a customer-centric
framework for website measurement. This framework
is built around four stages of the customer engagement
process: reach (getting the customer's attention),
acquisition (persuading them to visit the website),
conversion (persuading some of those customers to
purchase, register or whatever) and retention (obtaining
repeat business from loyal customers).
In the second section of the book, Inan introduces
and defines a wide range of business metrics for
a website and relates each metric to the four-stage
framework: for example, cost per acquisition (CPA)
is an important measurement for the "acquisition"
stage. This section provides a comprehensive, clear
and thorough definition of a wide set of metrics.
A subtle danger in website measurement is that different
experts, and different software packages, use the
same jargon term to refer to different metrics.
Inan provides a valuable reference to avoid that
type of ambiguity.
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The third section of the book shifts focus to consider
some of the technical details of website measurement.
In particular, he explains how to collect data from
the website and highlights 'data cleansing' issues
(for instance, the need to filter out search engine
robot activity from most measurements). Technical
specialists may find this section somewhat superficial,
but it covers the material in sufficient depth for
most marketers and non-technical managers.
A final section looks briefly at some 'softer' aspects
of web measurement, for instance the skills and
competencies that are required for staff involved
in web measurement projects. A nice touch is that
there is also an accompanying website - www.hurolinan.com
- which provides additional information resources
to complement the book.
Inan's writing style is precise and unemotional.
Whereas Jim Sterne's book 'Web Metrics' (see last
month's VIN) is ebullient, sometime rabble-rousing
in tone, Inan introduces and explains website measurement
with quiet logic.
The book suffers somewhat from a lack of in-depth
case study material. Whilst there are some real-life
examples, most of Inan's case studies are based
on hypothetical companies and serve to illustrate
general points rather than providing concrete 'success
stories'. The business case for website measurement
is compelling for most organisations, but Inan's
book lacks hard-edged financial examples to hammer
this home.
Managers and marketing staff looking for a down-to-earth
introduction to the practicalities of website measurement
will benefit from Inan's book: it is concise (just
over 200 pages), reasonably comprehensive and written
primarily from a business management perspective.
Practitioners and technical specialists in website
measurement will certainly find some value in it.
In particular, the customer-centric framework is
a helpful way to ensure that technical measurements
are clearly related to business goals and commercial
issues, and the encyclopaedic definitions of metrics
in section two are useful reference material. Specialist
readers will want other titles on their bookshelves
in addition to this one to provide more in-depth
information.
Visit
www.site-intelligence.co.uk
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Boots the Chemists' move to upgrade its website
presence, Wellbeing.com has hit the industry headlines
this month.
Both Retail Week ('Boots analyses Wellbeing') and
Precision Marketing ('Boots revamps Wellbeing in
customer appeal revamp') covered the story, the
latter in some depth, including Site Intelligence's
part in helping the high street retailer gain a
better understanding of its customer base and improve
its communications strategy.
A feature in Computer Weekly ('Customer-targeting
IT turns round Boots Wellbeing site) focused on
the technology supporting the changes. .
Visit www.site-intelligence.co.uk
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