Optimisation

The left side of our brain tends to be associated with functions that are analytical, rational, logical, and objective. The right side of our brain tends to orientate to creativity, intuition, and flexibility. In analysts, the left-hand side of the brain will tend to dominate, whereas with creatives and designers, the right-hand side will be stronger.

Optimisation using testing and experimentation technologies (such as Adobe Test and Target, Webtrends Optimize, or Google Website Optimizer) is mainstream for a lot of organisations. Companies such as Dell have built teams and processes to drive testing and experimentation through the business. Those companies have learned – and others are painfully discovering – that successful testing and experimentation is not only about implementing one of the many available technologies. It’s also about the need to harness people, resources, and processes around technology.

It’s similar to web analytics a few years ago. Back then, organisations implemented a system thinking that it would solve their measurement problems but then realised they needed analysts. Likewise, organisations must build structures and processes around testing and experimentation technologies, otherwise the business will not extract the potential from the system.

Testing and experimentation involves a lot of moving parts. Tests must be designed, assets created, technologies configured, and results analysed. Successful testing and experimentation programs require strong project and program management capabilities. Larger organisations typically have dedicated resources for program management, whereas in smaller businesses it might be part of someone’s role. In either case, a central function must identify which tests are planned and then manage them through the system. Workflows must be created to ensure that the assets to be tested are created and deployed onto the system at the right time. Tests must be monitored to ensure that any variants that are adversely impacting the experience can be dealt with.

Two Places Where Right-Brained Creatives Can Assist With Testing

All of this is predominately “left-brain” activity, i.e., managing, coordinating, analysing, testing, and experimenting also needs “right-brain” input, a more qualitative approach incorporating a user experience perspective. This right-brain input is important into two areas:

• Test program development (what to test)
• Test design (how to test)

Test programs are often built on the basis of web analytics reports showing which parts of the site might have problems. An additional input into the test program can come from understanding what’s working and what’s not working from the user experience perspective. The main sources of insight are from voice-of-the-customer survey programs and user experience testing. Many organisations have ongoing survey programs and many elicit user feedback through open-ended questions such as “How else can we improve the site?” User feedback can be a rich source of insight, but it must be mined, contextualised, and interpreted. These are right-brain attributes. This qualitative input helps to define what are the important areas of the site to improve and where to direct testing.

Second, right-brain input is needed for test design. Once a test area has been decided, the next issue is to decide what different elements will be tested. In a test, there will always be a winner even if it’s the existing version. With testing and experimentation technologies, you can cycle through many different combinations until there’s a significant improvement. But the challenge is how do you know that the variants that you’ve decided to test are the best ones? How do you know that the winner is not the best of a mediocre bunch? Optimisation specialists may know that certain things tend to work from the body of tests they’ve seen, but other inputs such as user experience expertise help to improve the quality of testing.

Good testing and experimentation is a combination of art and science, rational approaches and intuitive perspectives, and left-brain and right-brain inputs. It’s time to take a whole-brain approach to testing and experimentation.

This article was originally published by ClickZ

This article, written by Neil Mason, was originally published on Clickz.com on 11/10/10 and is republished here with permission.

Fragmentation, optimisation and integration. Those were the themes that stood out for me at last week’s Emetrics Marketing Optimization Summit in Washington DC. First of all I was reminded that “web analytics” is not was it used to be, it’s an increasingly complex space. Secondly, I was shown some great evidence about what’s really required to be an optimisation orientated organisation and finally we’re beginning to see some case studies from organisations that have made the investment in multi-channel data and the benefits they’re accruing from that. Read more…

Marketing managers, web analysts and business intelligence experts have been meeting at the eMetrics Marketing Optimization Summit since 2002 to learn how to increase the return on online investments.

Foviance’s Neil Mason, Director of Analytical Consulting will attend again this year as a guest speaker.

 This article, written by Neil Mason, was originally published on Clickz.com and is republished here with permission.

I’m increasingly convinced that the issues that most businesses face around the successful deployment of analytics in their business are not to do with their technologies but to do with their businesses processes. That view was reinforced this week when I was running a workshop with a group of students studying on a Masters Programme in Internet Retailing. Read more…

Clients who think that their online forms are too long may consider putting 2 or more fields (e.g. text fields, dropdown menus) next to each other in one line. Is this a good idea? Read more…

This article, written by Neil Mason, was originally published on Clickz.com and is republished here with permission.

There is a generally accepted view that an organisation’s multi-channel customers are its best customers. The theory is that if a customer buys from an organisation over more than one channel, for example in the store, from a catalogue and over the web, then they are more likely to be of higher value than if they just purchase through one or two channels. I can see there is a natural inclination to believe that if a customer does business with an organisation over more than one channel that it is probable that the customer has a higher degree of loyalty and hence value. However, the mathematics of the analysis state that a multi-channel customer is also more likely to be of higher value anyway by the simple virtue of having bought more than once rather than necessarily because they bought across different channels. So understanding the value of multi-channel strategies requires a bit more careful consideration than simply looking at the average customer value.

There is another dimension I think as well to evaluating the impact of multi-channels strategies. In the example above the focus is on the result and the channel in which the transaction occurred. From a customer perspective that is fine but to fully understand how multi-channel strategies are working (or not) it’s also important to understand the dynamics between the channel that the customer was acquired in and the channel in which the transaction takes place. This is particularly important for understanding the role of the online channel in driving offline transactions and there are two important ingredients to achieving this. The first important thing is to have the tracking mechanisms in place to be able see multi-channel behaviour. I admit this can be easier said than done. The second important thing is to understand why multi-channel behaviours are happening the way that they are and then to evaluate whether some of these behaviours are desirable or not.

The type of industry an organisation is in and the type of channels it uses to do business will determine the appropriate methods it can use to track multi-channel behaviour. For example, the use of a specific telephone number on the website for the call centre or using source codes or reference numbers to identify customers. Some of these methods will be more accurate and reliable than others but the initial solution to understanding the multi-channel puzzle is to have at least some mechanisms in place to track behaviours.

The next issue is then to understand the behaviours that are being tracked. It’s likely that first challenge will be to integrate the data from the different channels. Data may need to come from web analytics systems, call centre systems, customer databases and so on. Data will need to be cleaned, integrated and then analysed. This may require some different data analysis tools. The type of analysis you need to do will depend on the type of problem you are trying to solve. Let me give you an example based upon work we have done in the travel industry.

A company sells holidays to an older target market. The main channel historically has been telephone sales through a call centre though the web channel now makes up a significant proportion of their business. The website also allows visitors to download a brochure and it also gives the number for the call centre. Although web site traffic is growing steadily, the conversion rate was not increasing. Increased sales were a function of increased traffic.

The company wanted to increase the conversion rate to get more bookings transacted online as opposed to through the more costly call centre.

The website already had its own special number for the call centre so the number of calls that originated online could be tracked. The next stage was to understand how many of these calls turned into bookings. In this instance the call centre system didn’t allow bookings to be tracked against specific inbound numbers, so for a period of time call centre operatives receiving “web calls” were asked to track how many of them resulted in a sale. In this way a conversion rate could be calculated.

The other aspect was to understand what happened when people ordered a brochure from the website. The approach here was to match the names and addresses of people who had ordered the brochure online and to cross-reference them against bookings received in subsequent months and to look at what channel they had booked through. Although perhaps not perfect it seemed to be good enough. From this analysis we could determine how many of those people who had ordered a brochure online had subsequently booked and which channel they had used to make the booking (via the call centre or via the website).

This analysis allowed us to do two things. First of all we were able to estimate the total value being delivered to the organisation. This was not just the value of the online bookings but also the value of the bookings that came through to the call centre on the special website number and even those who had ordered a brochure from the website and had subsequently booked via the normal call centre number. In this case a significant proportion of the internet channel’s total value to the organisation came from its delivery of business into the offline channels and highlighted that the way that the organisation had been historically measuring the value had been underestimating the true Return on Investment.

The second thing that the analysis allowed us to do was to explore the dynamics of the interaction between the online and offline channels and to understand why some of these behaviours were happening. I’ll go into that in more detail next time. Till then…

This article, written by Neil Mason, was originally published on Clickz.com and is republished here with permission.

Here in the UK recent statistics have confirmed that the economy has stopped expanding and that it’s possible that we may head into recession. We have had continuous economic growth for the last 16 years or so and so for many people operating in a recessionary environment is going to be new. If it’s like the last recession we had in 1991/1992 then it could be tough. So, when it comes to marketing there’s probably two ways that organisations and businesses might react.

The dumb way to react will be to slash sales and marketing costs across the board, batten down the hatches and hope to ride out the storm. Marketing services costs like investments in measurement, analytics and research will be some of the first causalities as they are seen as “discretionary” costs and not core to the business operations. Also each channel or division will take a similar hit.

The smart way to react will also be to reduce sales and marketing costs. After all, if you are selling less, you have to react accordingly to maintain profitability. However, the smart organisation will look at how they can significantly increase the efficiency and effectiveness of their marketing expenditure and what are the important activities and tools they need to be able to do that.

In a recessionary environment it may be that the online channel is a winner. Smart organisations will look to see how they can acquire or service customers more cheaply through the e-channel than through other channels. Even with the digital channels, I believe the marketing emphasis is likely to shift with three possible trends:

• An increased focus on multi-channel acquisition optimisation
• Greater deployment of conversion optimisation tools and applications
• Development of more robust and sophisticated retention marketing programmes

As acquisition budgets come under pressure, digital marketers will need to focus on how they get more bang for their buck. Classic single channel optimisation techniques such as PPC bid optimisation will only work to a certain extent as all organisations will be looking to improve channel productivity. However single channel optimisation will essentially remain sub-optimal. Smart organisations will allow investment into the tools and analytics necessary to understand how to optimise budgets across digital acquisition channels such as display, affiliates and PPC. They will ensure that they have improved attribution models that enable them to understand how channels work alongside each other (or not) and which channels are delivering value. They will also ensure that they are able to reduce the costs of Cost Per Acquisition (CPA) programmes not only through better channel optimisation but also through correct attribution of sales or conversions to the correct channel. To do this, organisations will need to look at how they collect, manage and analyse their campaign related data. Joined up marketing is difficult to achieve without joined up data. They will also need to have the right tools and skills sets to allow them to analyse that data to understand that data. Improved effectiveness will come from improved analytics.

Having persuaded someone to visit the website, the trick is to get them to do something of value. Conversion optimisation has come of age in the past couple of years but is still a nascent practice in many organisations. To leverage the investments in acquisition, organisations will need to ensure that conversion rates increase. Site designs need to continue to improve and the customer experience enhanced. To do this will require a greater understanding of what’s working and what isn’t. Good site tracking will be vital not optional. Also testing and experimental tools as well as behavioural targeting platforms can be viewed as investments that have a measurable ROI. Therefore despite a potential squeeze on budgets these types of capabilities can pay for themselves inj a relatively short period of time if they are deployed correctly. Organisations should look to improve the effectiveness and efficiency of their processes and procedures around the tools to save money rather than reduce the investments in the tools themselves.

Finally, the other trend will be the development of more robust and accountable retention marketing programmes. I often think of the digital world as a “world of ones”. Most people who visit your website only ever visit it once. A lot of them only ever look at one page or stay for one minute. If they convert, they only do that once. Most of the challenge in digital marketing seems to be to get people to do something twice. Visit twice; make the second click; place the second order and so on.

The classic saying is that it’s far cheaper to retain a customer than to acquire a new one. In recessionary times it makes sense then to focus on extracting more value from the investments already make in customer acquisition and conversion than spending more on the same. For me the definition of retention marketing is the process of converting someone twice or more without paying the costs of acquisition and conversion twice. At the point of initial conversion there is usually an exchange of value. You sell them something; they tell you their name and address. They download something, you get their email address. You also know what they bought or downloaded and so that insight forms the basis of improving their propensity to transact with you again with relevant communication at the right time. Using tools and techniques such as segmentation and predictive analytics will help with both relevancy and timeliness.

If there are stormy waters ahead what are you going to do? Batten down the hatches and hope for the best? Or invest in the right navigation equipment, learn how to use it and plot the smoothest possible course to keep ahead of the pack?

This post originally appeared in Applied Insights’ events section. Foviance acquired Applied Insights in November 2008, with Neil Mason joining us as Director of Analytical Consulting. As part of this acquisition, we’ve incorporated Applied Insights’ events list into our own.

This year Neil was invited by Jim Sterne to be the conference chairman and a keynote speaker the Emetrics Marketing Optimisation Summit in London.

As well as fronting up the proceedings over the two days and trying to keep the conference (and its speakers) on track, Neil delivered a keynote presentation looking at the development of web analytics and marketing optimisation practices within organisations called: “To Marketing Optimisation and Beyond!”