Web Analytics

This is an abridged version of a conversation between web analytics guru Jim Sterne and Foviance director of analytical consulting Neil Mason.
Part 1 of the uncut video is now available for viewing as Foviance’s latest Customer Experience Podcast. This is the most recent in a series of regular interviews with senior figures from the world’s most respected businesses, focusing on the ways organisations manage the customer experience.

Jim, you’ve been working in consulting and internet marketing for 15 years and specifically web analytics for 10 years - what major shifts have you seen over that time?
The big shift happened early, which was going from nothing, to reporting. Reports told us how many people visited our pages, which was a valuable way of proving that the web was a viable way of reaching people and that people were interested enough to reach in and grab the information they wanted. To make their websites better, people then went from just reporting to benchmarking, and from that to optimisation, and then to market optimisation. We’re now starting to see companies using web data to run their businesses, using web data to determine what territories they should be shipping which products into, whether they should open up new stores, add new products to their lines, or add new features to their products. These are business decisions, and people are realising that the web is a tool they can use to inform those decisions.

So organisations are now using online intelligence to make offline business decisions?
Exactly, yes. I think it’s a natural progression; an evolution. In the beginning the marketing person says to the web guy, “What’s happening on the website?” And IT says, “Well what do you want to know?” Marketing says, “Well, what do you have?” IT says, “Well, what do you need?” Finally there is enough understanding between the two, that marketing is also saying, “Gee, this data could also be used for this, this, this and this…”

And is this something you’re seeing both sides of the Atlantic?
Companies in the US are very happy to jump in and are not so risk averse, while companies in Europe will sit back and say, “Go right ahead, let us know how it goes, if it works out great, we’ll follow.” That’s part of it; the cultural issue. The next part is scale. I like to quote Bruce Sterling who said: “The future is already here, it’s just not evenly distributed.” There are companies in the US, UK and Europe who are all doing amazing things - there are just more of them in the US.

What characteristics differentiate those companies who are more innovative and more adoptive?
All the elements related to change management. Support of senior management, a grass roots understanding of the value at the coal face, and the ability to move an organisation forward. We’re moving from the idea of measuring people and pages to an understanding of customer experience. What is the customer perception of the company? This is a philosophical change. What matters is what customers want and whether we are prepared to build it. So we have to have all kinds of ways of listening to those customers. What do they want, how do they feel, and what are they responding to? That is a philosophical switch, a corporate cultural issue, and the companies that ‘get’ customer centricity are the ones that are most able to take advantage of these tools.

And are you seeing a shift towards more organisations building success around a customer centric strategy?
I am, and the ones that are doing it first are the ones that have always been data intelligent. Some organisations know everything I buy, when I visit and how much I spend. That’s a huge amount of data which they can monetise. These companies understand that if they can use that data on behalf of their customers, instead of about their customers, in other words to help me buy more things that I want to buy rather than sell me what they want to sell me, then they will be more successful. They understand that web data is just another data stream. If they look at what we are all doing on their websites as well as what we are putting in our trolleys, they can make projections and take some actions from a marketing perspective, and absolutely measure the results. The companies that are adding the web data to what they already know about their customers end up being the winners.

Web data is notoriously messy and horrible, and there’s lots of it. What are the challenges in taming that particular beast?
Web data, relatively speaking is new. There are many different technologies to measure it, there are advancements all the time, and there are innovative ways of communicating online. I mean, who thought a year ago that tracking your Twitter data would be important? Well now it is. It’s also important to go out and listen to the blogosphere and find out what people are saying about you on their Facebook page. We’ve got to join that up with how they’re responding to surveys, how they behave on websites, and what their facial expression is as they use that web page. It’s messy, it’s a bit frightening, but it’s hugely valuable and an amazing competitive advantage when it can all be brought together.

What other obstacles do you think companies will need to overcome to become more customer-centric?
Philosophy is number one. They have to comprehend from the top that customer centricity is important. Next they must get a handle on data, which is a silo nightmare for so many reasons and in so many ways. Then there’s this funny middle management problem of change management. Senior management and the people actually doing the job understand, but the people in the middle are disinclined to use this data to analyse their success. They must have the confidence to turn decisions over to their customers. Customers own the brand. It is their perception that matters, and you can’t tell them what to think. They’re telling each other what they think. You’ve got to be able to listen to that. You must accept the customer as a member of the team. Data must be collated and connected so that it is meaningful, so that when a call goes into the call centre or an activity happens on the website or something happens at the till in the store, it triggers other marketing. That’s where this is all heading - automation of marketing for the benefit of the customer.

Interview with Jim Sterne of Target Marketing; producer of the Emetrics Summit and Chairman of the Web Analytics Association, conducted by Foviance’s Director of Analytical Consulting, Neil Mason.

Episode title: An interview with Jim Sterne
Episode number: 2
Series: Expert Interviews
Duration: 3 parts, total 19 minutes

An abridged version of the conversation between web analytics guru Jim Sterne and Neil Mason can be read in our March Newsletter.

The interviews are in three parts below:

Part 1

Part 2

Part 3

Alternatively you can also read the Podcast transcript.

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

In my last article I looked at the measurement aspects of understanding multi-channel dynamics. This week I’m going to look at some of the analytical approaches. Having put in place the mechanisms to track cross-channel behaviour, it’s important to explore the observed dynamics of the interaction between the online and offline channels and to understand why some of these behaviours are happening and whether they are desirable or not.

A point of focus for an organisation might be to understand why a customer who starts a transaction online then ends up completing it offline. Many organisations would usually prefer those transaction to be completed online as its cheaper to process the transaction. The reasons why this channel shift occurs could be down to the way that an organisation does business, down to traits of consumer behaviour or because of the complexities of the product.

A while back we worked with a bank to map out the channel dynamics and to try and measure the channel shift from online to offline. This was complicated by the fact that the bank had installed internet terminals into its branches to allow prospective customers to fill in applications for some of the simpler products online but in the branch. The idea was that it would reduce the need for customers to wait until branch personnel were available and that one branch person could help many customers at the same time. Branch personnel would also be freed up to sell more complex and higher value products. However, what the bank found was that the branch personnel would often lure people away from the branch terminals to do the transaction on their own systems. The reason was simple and that was the branch personnel didn’t get commissioned on sales that were made on the terminals in their branches. In order to get the desired behaviour the bank needed to capture the IP addresses of the terminals in the branches, link them to the sales made on the terminals and then allocate those sales back to the branches. In that way the branch personnel were much happier about allowing people to “self serve” in the branch.

Last time I talked about a holiday company serving an older target market. Having set up the measurement tracking capability to look at cross channel behaviour, we set about analysing why channel shift as happening. We looked at the bookings that had been made on the website and compared them against bookings where someone started the process online and then had completed the process in the call centre. Across of the things that we looked at the gender of the person making the booking was the biggest factor. Men were more likely to do their research on the internet and book online. Even if they had ordered a brochure they were more likely to go back online to make the actual booking rather than call the call centre. Women on the other hand we4re far more likely to use the site for research only and to order the brochure but would then call the call centre to make the actual booking. Focus groups confirmed that this was the preferred apporach for women and so in this case channel shift was down to gender differences.

In some cases channel shift might be down to website issues. We conducted a similar piece of analysis for an insurance company looking at channel dynamics on their car insurance products. Once again we assembled the data to look at the bookings that were made online and compared them to those bookings that end up in the call centre. We looked at a number of different characteristics including the type of insurance cover, the car being insured as well as the demographics of the policy holder. In this instance given the breadth of the data we used Chaid analysis to identify those characteristics which were the most important in predicting channel shift. The results were somewhat surprising. Rather than demographics being the most influential factor as I had had suspected, it was actually whether someone had bought a particular optional extra on the policy. If they had, they were far more likely to have completed the transaction in the call centre. Armed with this information, the company went back and reviewed the site processes for buying this particular optional extra on the policy and could see where the process could be improved to help reduce the need for people to call the call centre.

Channel shift may be down to organisational issues or site issues. These issues can be addressed. Other factors may be more ingrained in the way that customers want to do business and so in these cases channel shifting should be embraced as long as it’s recognised accordingly.

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?

The goal for forward-thinking retailers is to re-organise their entire businesses around the customer. The tougher challenge is how to make this change whilst continuing to grow, servicing customers and gauging the extent and pace of change necessary to meet employee and customer expectations without damaging the brand.

Multi-channel retailing provides an answer to this dilemma. If implemented effectively it can prove a catalyst for change across your business, moving away from product-centric operations to a more customer-centric organisation, thereby developing a model that meets the expectations of future customers whilst delivering profitability and growth. The opportunity lies in understanding how to win and retain those customers of the future demanding to buy what they want, when they want and where they want.

To achieve this, multi-channel retailers must first understand who their customers really are and then segment them into groups which share common characteristics. Only then can retailers understand the lifestyle touch points, wants, needs and influencing factors that their brand can be associated with. In order to achieve this, insight ‘personas’ are a must.

- What are personas?
Personas are fictional, but realistic, character sketches based on a break-down of the target audience into groups of users that exhibit common characteristics. They are created using knowledge drawn from customer experience research (qualitative), web analytics and survey data (quantitative), as well as interviewing influential stakeholders of the website.

- How are personas used?
Personas are used throughout a site review or re-design project. They help build a shared understanding of who will be affected by any site re-design, the relative importance of different groups to the site, and how different groups are motivated. In detailed design phases, personas can inform design decisions by allowing multi-channel retailers to explore a range of ideas, hypothesise the potential consequences on target audiences and select the best options.

I have worked with the largest and most successful retailers in the UK and globally over the past three years helping them achieve an enhanced online customer experience, and yet I often still take time to ask the question: “Who are your customers?” My clients know the answer to this based on research they have conducted and their perception of who they wish to target, however there is often a deeper requirement to understand more about the characteristics and buying behaviours of these customers.

How exactly does a retailer deliver the right online content for the core persona while satisfying the needs of secondary personas? The internet is the most measurable medium available and most organisations have rich data available to them in the form of web analytics, pre and post purchase online surveys and so on. This is a good starting point but further research must be done to truly develop an accurate persona, such as ethnographic research (this involves observing a customer or acquisition target in their natural environment), focus groups, usability testing and in a multi-channel environment, interviewing customers in-store.

Pulling all this data together is of course a skill in itself, as well as a core competence of Foviance.

I recently returned from a business trip with colleagues to attend and present at the Usability Professionals’ Association (UPA) International Conference 2008, held in Baltimore, Maryland during the third week of June.

The theme of this year’s conference was ‘Usability Through Holistic Practice‘. The UPA believes it’s important for people to understand just how broad a spectrum of professionals touch the user experience of a product or service and bring their own valuable perspective to the process, including marketing specialists, graphic designers, computer scientists, business analysts, psychologists, information architects, technical writers and others.

My colleague Catriona Campbell and I were fortunate enough to present an all-day tutorial around the subject, sharing our own approach to holistic usability and managing user experience.

Attending, and especially presenting at UPA08, gave me a fresh perspective that can be hard to gain when working nose-to-grindstone in the office. In the UK we’re sometimes guilty of thinking that we are somehow behind the curve compared to our American counterparts, when actually we are ahead in many ways, such as the manner in which we regard, measure and design customer experience. It’s not that innovation doesn’t exist in the US, it definitely does, but I believe our general attitude is more adoptive across the board.

Our workshop at the UPA followed the core principles of the Foviance approach to customer experience - combining qualitative and quantitative measurements, to fully understand the true user experience and what is to be done to enhance it.

We presented a broad array of elements and tools that could be employed to manage user experience, from more straightforward devices such as web analytics or satisfaction surveys, to more cutting edge approaches such as eye tracking and EEG stimulus. We also discussed emerging techniques such as benchmarking experience across competitor sites and products using remote usability testing with quantitative numbers of participants and appropriate tools, such as WebEffective from Keynote Systems. Once identified as the right elements or tools needed to achieve a particular project’s aims, any or all of these then needs to be combined in order to deliver a holistic view of customer experience.

Some of the attendees, who ranged from independent usability people to owners of customer experience at large corporations, admitted past experience of having the right tools but encountering problems bringing them all together. As the conference progressed, people searched us out to let us know they had been able to grasp this bigger picture.

For those that attended our workshop, the conference clearly demonstrated that we have the tools and technologies to manage and measure the whole user experience from end to end. Not only that, but we are able to prove categorically the business case for investment in user and customer experience - something that is going to be increasingly important in the ‘credit crunch’.

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

In this series I have been looking at some of the basics of setting up a web analytics programme. Often when organisations come unstuck with getting their web analytics programme working effectively it’s because of issues around planning and processes rather than the technology itself. Last time I looked at campaign tracking and this week it’s the turn of understanding content consumption.

Typically when web analytics systems are deployed “out of the box” the reporting of what content is being looked at is at the page level. We are all familiar with reports such as the “Top Pages” report which shows which were the most popular pages on the website, but the problem with these types of reports is that they rarely change and from looking at these reports it’s difficult to understand overall patterns of content consumption. The data is too granular. Often it’s more useful to know what types of content are being consumed the most (or the least) rather than which individual pages.

The solution to this problem is to assign pages into “Content Groups”. A content group will represent pages that have something in common. For example, all news items might belong to a content group called “News” and there may also be sub-groups or a hierarchy such as “News: Domestic, News: International” for example. Once all the pages are assigned to the various content groups, it’s possible to take a look at how many people looked at a group of content, how long they looked at it, where they came from to reach that content and where they went to afterwards. For sites that are content reach and maybe don’t have much transactional activity, this is more useful and more important.

Content grouping is fine in theory but how does it work in practice? Different web analytics systems tackle content grouping in different ways and some have more flexibility than others. If you are looking at different systems, this might be relevant to your decision making. Content grouping in some systems is dependent on the URL and folder structure and is usually fixed in the reporting interface. Google Analytics has an example of this approach where it is possible to use the Content Drilldown report to look at content consumption at each level in the folder structure. This approach can work well for sites where the content is organised with a neat folder structure but for many sites this isn’t the case and a different approach is required.

An alterative approach to content grouping is to assign pages to groups in the data collection tag. This approach is more flexible. Content groups can be defined independently from the folder structure of the website and in some cases a different hierarchy can be developed as well. Pages can then be assigned to content groups by customising the page tag. But flexibility comes at a cost and that cost is in development and maintenance.

First of all at the point of implementation, a plan is needed of what the content group structure is going to look like and how it is going to be implemented. For a large site with lots of content, this can be quite a significant exercise and require a good deal of planning. It’s also something that needs to be considered for site refreshes or rebuilds. The implementation approach will depend on the technology behind the site such as the content management system being used but ideally there will be some rules based approach which will help with the ease of implementation. At the end of the day there may be trade offs that need to be made between what the content groupings might look like in an ideal world and those that can be achieved in practice.

After implementation there is also the matter of maintenance. Most sites are dynamic in the sense that content is regularly being updated and changed. Pages are added, changed or deleted. In order to maintain the integrity of the data processes will need to be put in place to ensure that as pages or sections of content are added that the content grouping is managed at the same time. So, it needs to be worked out who is going to own the process, who’s going to manage it and who’s going to be responsible for doing it.

As with campaign tracking (which I looked at last time) the success of measuring content consumption on the website is not just down to what technology you’ve got but also down the planning skills and the maintenance resources that you put behind it.

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

In my last column I outlined how organisations can come unstuck with their web analytics if they don’t pay sufficient attention in general to the integrity of the data they are reporting. It can seriously impact on the decisions that the organisation is making. One of the areas in particular that I have seen organisations struggle with using their web analytics tools is campaign tracking and once again it’s often the processes and not the technologies that are the root cause of the problem.

The ability to track marketing campaigns is now a standard component of any web analytics tool. We don’t need to worry anymore about having to set up specific landing pages and tracking referrals to the page. Most web analytics tools now use the same principle of campaign tracking. This involves of adding a tracking parameter to the end of the landing page URL to identify the piece of marketing activity. The web analytics tool is then configured to recognise the tracking parameter at the end of the landing page URL as a visit generated by a campaign and then populate the database and reports as appropriate. Simple enough in theory but often trickier in practice.

Some of the common pitfalls that lead to poor quality campaign tracking data are:

• Campaign data is not properly structured
• Campaigns are not consistently tagged
• Campaigns are not consistently tagged consistently

The first of these pitfalls is a planning issue. The second two are process issues.

Most web analytics tools have a framework or structure for campaign reporting. This is where a specific piece of activity is identified by a series of attributes. These attributes are then used to provide different levels of reporting. If we take Google Analytics purely as an example, then a piece of activity can be described using up to five different attributes (Source, Medium, Term, Content and Name). Part of the campaign tracking implementation process is to determine what these attributes mean for your own campaigns and how detailed you want to be. It’s important to think ahead about what activity you might want to run in the future as well and how that might fit into the framework. For example, you might be running only one type of email newsletter at the moment but if you develop your email marketing strategy to include different types of more targeted emails, will your campaign tracking approach allow you to identify how each of the different types of emails are working?

Whilst the underlying principle of campaign tracking is generally the same across most web analytics tools, the framework for reporting does differ from system to system. Some tools are more flexible in their approach than others. Whatever the tool though, proper planning is required to ensure that the right kind of reports come out the other end.

After planning comes process. Having decided how you want to structure and report on your campaigns, the campaign landing page URLs need to have tracking parameters attached to them. Sometimes this is an automated process but more often than not there is a degree of manual intervention and that’s where the problems usually start.

First of all, all campaigns need to be tagged to be tracked. This might seem like a statement of the obvious but it is surprising how often in the heat of the moment to get a campaign live, the tracking parameters are forgotten. I know that this doesn’t happen in your organisation but it does in others? Once the campaign has gone live without the correct tracking parameters attached you can’t go back and recover the data. It just doesn’t exist. And the time that you really want to know how a campaign is performing is when it goes live. So, you need to have management processes in place to ensure that all campaign landing page URLs have tracking parameters.

You also need to ensure that the landing page parameters have the right tracking parameters in place as well. For example, if you have an attribute which is “email” to identify all visits coming from emails, then it needs to be used consistently as “email” as opposed to “Email” or “e-mail” or “E-mail”. Lack of consistency in tagging resulting is poor data integrity in reporting. Again, this may seem obvious but the challenge comes when you may have different people or agencies responsible for management different types of campaign. They all need to tag the campaigns in the same way and a degree of process and control is required. This can be helped by having a centralised approach or using campaign management technologies.

So, planning and process are the watchwords for campaign tracking success.