technology leaders

Leveraging Web Analytics:

How to clarif y your goals, build winning metrics and measure your way to success By Andrew Edwards

featuring e5o: The 5 Necessary Steps to Web Optimization

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Table of Contents
Executive Summary A Quick Take on Web Analytics and its Promise. . . . . . . . . . . . . . . . . . . 2 Chapter 1: Knock Knock. Whos There? Understanding Our Prospects and Turning Them into Customers . . . . . . . . 4 Chapter 2: Its not Web Analyticsits Web ROI . . .and How That Changes Everything . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Chapter 3: We Cant Have Any Pudding if We Havent Eaten Our Meat The Five Necessary Steps to Web Optimization (e5o). . . . . . . . . . . . . . . . . 11 Chapter 4: Get em and Keep em Reaching, Engaging, Converting and Retaining Customers. . . . . . . . . . . . 21 Chapter 5: Conclusive Evidence The "How Do I make This Happen?" Part . . . . . . . . . . . . . . . . . . . . . . . . . 35 About Technology Leaders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 About the Author Andrew Edwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

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Executive Summary A Quick Take on Web Analytics and its Promise

As the web marketplace has matured, the need to derive tangible business benefits from the web has become an obvious challenge. In response to this, many of us have recognized the importance of web analytics in measuring and achieving ROIbut few of us are reaping enough benefit from web analytics technology. And just as the need to receive a measurable return from our web sites has increased, so has the simple recognition that, for most of us, there is no repeatable method by which to make this happen. For many of us, therefore, the web site is a cost center, when it is supposed to be just the opposite: a profit center or a measurable productivity enhancer. It is no longer enough to cite the traditional disconnects between marketing and technology. The time has come to identify a straightforward best-practice for acheiving web optimization and web ROI. A number of very powerful and very configurable web analytics tools and offerings are on the market today. Yet the tool often is configured incorrectly, or allowed to run in default mode. Worse, there is often no specific plan of action to adequately measure the right things, and then to do something about fixing the problems discovered through measurement. Therefore, measurement doesnt really spring to life. By performing two parallel actions, companies can begin to make headway in this important area:

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First, to recognize that there is a necessary class of professionals that must be dedicated to the cross-disciplinary (marketing/technology) task of achieving web ROI with web analytics tools. Second, that those professionals require a repeatable, practical method by which to operate. This method can briefly be described as a series of five steps* including: 1- Define Drivers (figure out what the on-line goals are) 2- Build Metrics (decide what to measure, and with what tool) 3- Plan Actions (decide what to do after reviewing metrics) 4- Create Changes (execute the actions that were planned) 5- Measure Success (measure again; see if goals were achieved) Only by implementing the five steps above, and by making it a part of every key web-based project, can an organization reasonably assure itself that it has performed measurable, repeatable web optimization. Quick Takeaway: Web analytics software can only be leveraged for success by dedicating specialized talent and expertise to the task; and by utilizing that talent within a repeatable web-optimization process. The above represents a high-level review of the value of web analytics. Well go much deeper into the process of putting web analytics to work in the following chapters-please read on.

*eBusiness 5-step Optimization (e5o)

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Chapter 1 Knock Knock. Whos There? Understanding our Prospects and Turning Them into Customers
Name a business transaction of any kindin banking, in manufacturing, even the simple organization of a meeting. Likely, therell be critical, measurable information that will serve to coordinate efforts and to determine the success of the effort itself. Now consider something that would be truly shocking: what if our bank had no way of telling us the value of our investments? Wed look at our account statement and the only things it would tell us would be, Well, it looks like you have some money in savings; also, you wrote more checks last month than the month before. And apparently you made some deposits. How quickly would we switch banks? Now lets think about our web site. Why do we have one? Is it one overriding reason? Or several reasons of somewhat equal importance? Ultimately, everyone wants something out of their web site. Like more money. Or, maybe the ability to save money. That may sound very, very obvious. But the next part isnt. If the site is important to us, we need to know how successful it is at doing what we

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want. And not just sort of generally, like the bad bank we just mentioned. We need to know much more exactly. Because if we dont know exactly whats going on with it, we cant know how to improve it. What makes this even more intriguing is that, of all the business channels at our disposal, there is only one that can unobtrusively yield constant, accurate, living data about our customers or other users. Heres news: its the web site. If this is true, it then seems to makes little business sense not to measure accurately and effectively. To accomplish this, well need to leverage a certain set of Not putting our site to tools and disciplines commonly known as work is like having a web analytics. Well want to implement some of the very capable tools on the titanium, thirtyspeed bicycle sitting market in order to get an accurate measure of what is really going on with our in the garagewhile web sitejust the way we would want to were squeaking track any other investment we had made. The Elements are in Place Today, we find ourselves with a wide choice in web analytics vendor packages. Many of these packages are capable of delivering highly sophisticated information about user activity. And, as we will demonstrate, we can also implement a real-world methodology for putting this class of measurement tools to work. It is possible today to combine these elements and achieve an important goal: that of finely-tuning our web site so that it functions as a unique and powerful business tool. In this light, not putting our site to work is like having a titanium, thirty-speed bicycle sitting in the garagewhile were squeaking around the neighborhood on a tricycle.

around the neighborhood on a tricycle.

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The logic sounds fairly straightforward. We have a way to better understand our customers behavior: the web, properly measured and observed. We know too that if we understand how customers are interacting with our site, we can make improvements directly to the site and come closer to getting customers to do what we want on the web. It all seems so obvious and so simple. So, why isnt web analytics being leveraged successfully more often? Let us take a look at some of the challenges.

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Chapter 2 Its not Web Analyticsits Web ROI . . .and How That Changes Everything
There is no small amount of science in getting a web site to yield useful business data. First, there are tremendous amounts of raw information generated by web usage (such as log files and cookie data). Then, there are dozens of kinds of sophisticated products that take this raw data and turn it into "reports" of many different kinds. Finally, there are the reports themselves, and they tend to look like lots of other technical reportsbar charts, pie charts, charts and charts and more charts. It tends to be very geeky sort of stuff. It is the sort of stuff that the people who are responsible for running a businessthe senior executives in the business lines as well as the sales and the marketing executivestend to gaze at for a few moments and then place in a corner of their desk and wait for it to be covered up by something more important. Let us propose that the reason for this is that, typically, a hundred or more pages of charts and graphs do not help a busy executive make any decisions. Believe it or not, theres actually stuff missing from these reports. Theres no news. Theres no story. Nothing to be proactive about. So weve got this firehose of information coming out of the web site. And people are kind of running away from it. They seem like they are uncomfortable with it. Its techy, its geeky, and anyway they dont know what to do after theyve seen it.

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The Web Development Metaphor Theres a useful analogy to be made here about technology and results. Lets say we knew we needed to reach a certain audience, and we knew we could reach them with a targeted site. All the market research is done, all the merchandising is done, everything is in place. Except for the development". The technical part. And lets say that a certain marketing executive decided that the site wasnt going to go livebecause neither he/she nor anyone on his/her staff knew how to use web development toolkits. Theres a reason why this will never happen. That reason is, because the entire set of skills referred to as web development has been built around leveraging complex and configurable software tools to produce required results (eg. websites). But something like this might happen if the following were true: That there was no class of professionals who even knew how to skillfully use the software, in order to create the proper digital files for launch. In other words, no web developers. This, unfortunately, is the dynamic that inhibits the use of web analytics. Think of web analytics software/services as the equivalent of web development toolkits. Think of the process of web optimization as web development. Whats lacking in most companies is: A cross-disciplinary class of professionals who are able to use web analytics software in a carefully defined process to create valuable results. In the case of web analytics, the results are not beautiful web sites. The result is a web site that is optimized for maximum ROI.

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The Goal is Web ROI Now that weve discussed some of the barriers, it is relatively easy to see why the tools arent really being used to maximum advantage. And heres how we can begin to fix the problem. The first part comes from fixing how we think about it.

Lets stop talking about web analytics. Instead, lets start talking about web ROI.

Just as we dont think of catalog creation, printing and distribution as a collection of technologies (even though it employs them) and expertise (even though expertise is required), we shouldnt make the same mistake with this thing we are calling web analytics.

Simply put, let us therefore stop talking about web analytics. Lets start talking about web ROI. Because thats what this is all about. The implications of this are profound. It means that the whole endeavor is on a new footing. We are no longer concerned with getting data and deploying software. We are interested in achieving results. Measurable, repeatable results. Like more customers converted. Like more sales. Like more users directed to information more quickly. Like more dollars dropping to the bottom line as a measurable result of our efforts on the web. If these sound like marketing goals or like business goals, its because they are. If anyone tries to tell us there is some other goal to be served by web analytics, we must tell them to go away. Quickly. They are wasting our time. So weve identified that this is about marketing. And weve identified that there are missing pieces.

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We talked about a class of professionals as one of the (mostly) missing pieces. But we also talked about a carefully defined process. Lets take a look at the parts of that processthe parts that will help us in achieving better, measurable web ROI.

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Chapter 3 We Cant Have Any Pudding if We Havent Eaten our Meat: Five Necessary Steps to Web Optimization (e5o)
In the previous chapter, we began by saying there was no small amount of science in web analytics. However, in obtaining results with web analytics software, there is probably more art than there is science. Once weve understood that our goal is driven by marketing concerns, we immediately begin to apprehend one fairly obvious fact: that there is no software for our on-line marketing that allows us to press the make-it-better button and then see wonderful results come tumbling out. Except for a very small number of cases, obtaining results will require two irreducible elements: a process of best practices; and skilled web analytics people in order to make the process yield results. Many companies fail to optimize their web marketing efforts because they lack one, or very often both, of these two critical components. This is neither to say that there arent very capable people in the marketing department; nor that there arent capable people in the IT world as well. There are, and they know exactly what they are doing. The problem is that measuring and optimizing web sites is a new thing for almost everyone. And the set of skills it calls upon bridge different departments within an organization.

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The class of professionals that specialize in this is only just now beginning to emerge: web optimization professionals. These folks may already be found within the organization. Or they may be represented by a new breed of service companies that are hybrids of marketing, technology and professional servicesand that work to bridge the gaps between marketing and IT and the software itself. This type of professional will focus on using web analytics tools as the most likely way of achieving measurable e-business ROI. To do this, they, or organizations that want to do this themselves, will have to engage in some very particular behavior. They will have to work themselves through five separate and very important steps. Each step is so important that we feel comfortable in calling the process "e5o" (eBusiness 5-step Optimization) and making the following statement: If a company has not followed each of the e5o steps, they have demonstrably not performed web optimization. e5o: Five Steps That Must Be Followed Here are the steps. Well go into detail a little further along. 1- Define Drivers (figure out what the on-line goals are) 2- Build Metrics (decide what to measure, and with what tool) 3- Plan Actions (decide what to do after reviewing metrics) 4- Create Changes (execute the actions that were planned) 5- Measure Success (measure again; see if goals were achieved) Lets talk about how each of these steps can work in a real world situation. 1-Define Drivers This part of the process is essentially a strategy and a discovery exercise. It will call upon people who have both very high-level requirements as well as more targeted, specific requirements of the site.

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Let us imagine a company that is holding a high-level web strategy meeting, and that one of the attendees is a senior executive in the company. This business-line executive might say I need to get more leads out of the site. After all the marketing discussions are over, and the muffins and jam have been cleared from the executive meetAfter all the marketing ing room, one thing emerges: lead generation is probably the main reason the meetings are over, one site exists.

Of course, there are tactics that derive from this. Well want, for instance, to develop a rich, nuanced understanding of the sites drivers in order to develop the best way to reach prospects; the best way to convert prospects to customers; and the best way to retain the customer after sale. Well get to those in a chapter to follow. But lets keep going down the list. 2-Build Metrics Heres where were able to really take advantage of the built-in tracking abilities of the web, as an advantage over traditional, off-line marketing intelligence techniques. Its in this phase where we employ some very particular tools that do a great deal of sophisticated parsing and reporting on the activity that takes place on the site. There are a number of capable tools on the market. They come from companies like Omniture, WebTrends ,Google, and CoreMetrics and are commonly known as web analytics tools". Many of us are already familiar with one or more of these toolkits. The level of complexity found in web analytics tools can vary greatly. However, all are designed to deliver reports based on site activity recorded by our web servers.

thing emerges: that getting leads is probably the main reason the site exists.

That company has just begun defining its drivers.

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The most common mistake in using web analytics is in thinking that simply having a canned (standard) report is tantamount to having done web analytics. Worse, many may believe that web analytics toolkits will deliver useful results after it is implemented and allowed to run in default mode. The fact is, allowing web analytics tools to run out of the box (e.g. without making it answer any business questions), is a profound mistake. It renders the software as near useless as it can get. Important point: there is nothing wrong with the tool. There is only a problem in how it is being used. To demonstrate how common this problem is, consider the following question: How often have reports arrived on peoples desks andas we indicated abovethey just sort of sit there? Our guess is, pretty often. And it isnt because people are too dumb to understand the report. Its because the report isnt reporting anything worth reporting. Page views? Hits? Total visitors? How does knowing that make money for us? Even for a well-versed web analytics expert, the basics mentioned above have little insight to offer these days. These days, we are concerned with much finer views into customer behavior. For instance: What activities define a valuable prospect? Lets look at (e.g. use web analytics tools to measure) the people who came to our site and accomplished what we wanted them to accomplish. People who we converted from prospects to customers. What did they commonly do before they got to the successful conversion?

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If we knew that, we would be able to predict, via observable behavior, a valuable prospect: someone who was acting like they were about to do something valuable (buy something, contact us, download our demo). We might then have a couple of options. We could tailor their experience based on their perceived valuea special offer? Or, what if lots of them got nearly through the process we wanted them to followand then left consistently on a certain page? We might be able to review that loser page and fix it. In order to gain this insight, we have to configure our web analytics to measure it. In the above example, we will want to carefully construct campaign definitions based upon the combination of an entry page and its referrer; gather related pages into content groups; focus path analysis on critical pages within the site; and create custom reports aligned with our business objectives. Depending upon the site and our goals, pre- or post-processing may be required to deliver the needed information. Also, we will want to have established a persistent cookie protocol (which helps identify a return visitor) in order to separate particular groups of users from the general run of traffic. Of course, we will also want to have used some of the filters available within the software to keep from measuring such things as intra-company traffic, web-spiders and the like. There are many other ways to leverage the tools. In our review, weve only included one example. Weve now completed two of the five steps in the process: we figured out what we wanted people to do. And weve measured how close theyre getting to doing it.

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The next part takes us out of the realm of toolkits and into the what do we do now? part of the process. 3-Plan Actions Weve already configured the toolkit and have gotten reports back. Now well dig deeper into the statistics to analyze the data, perform some meaningful calculations and make recommendations. This is the part where toolkit alone cant take us. Only a certain level of knowledge about both marketing goals and technology will get us through this part. Its the part where, even when theres a richly detailed report lying around, nothing else happens.

The frame of reference used by IT professionals is different from that used by marketers. Therefore, marketers have to learn the language of web analytics.

One of the barriers here is that, often enough, companies have a communications problem between the issuers of the report and the recipients of the report. Typically, the issuers are in the IT departmentbecause they knew something about how to configure the tool to deliver the report. But the recipients are oftenor should bein the marketing department or the business-lines. Simply put, the frame of reference used by a capable IT person is different (not to say nearly unrecognizable) to a capable marketing or line-of-business person. Both are critical to the organization. But if the report arrives on the desk of the marketing person, but it is designed to address the rather technical frame of reference of an IT professional, the report is virtually useless. Unfortunately, the reports are not going to somehow turn into a form of advice. Someone inside or outside the organization has to do this.

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Marketers and other business professionals, specifically, have to learn the language of web analytics reports to drive their own action plans. It might take time; it might be annoying. But there is almost no way around it. Of course, there is one way around it. There are companies that specialize in taking an organization through some or all five of these steps and as part of that, are prepared to turn the report into useful action plans. Whichever way is right for the organization, the same activity has to take place: Look at the data. Interpret the data. Target problem areas with decisive action. We may notice, for instance, that a goodly percentage of our best prospectsthe ones that, way back in define drivers, we wanted to contact usare getting pretty far through the process of actually contacting us. But they are stopping short. Where? Well, we might observe that theres a page on which we ask users a list of questions. And lots of folks are not getting past it. Too many questions? Maybe. The wrong questions? Perhaps. Another example: we notice lots of users dropping off on a key conversion page. And well take a look at that page and see theres an offer being made, and a contact us button. But the offer is perhaps not that clear. And the button is not that visible. The physical space between the offer and the contact button iswell, lets just say you cant see them both at the same time. Clearly, we should invest some time and effort into identifying some new ways of presenting that page and its contents.

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Were now creating actions plans. At this point, weve clearly stated what we really wanted users to do. And we configured our analytics tool to know where to look for trouble. We think weve found the problem. And weve made some plans to fix it. Of course, we wont really know if weve fixed it until later, when we measure again. But well get to that. The next thing that happens is, someone has to actually make the changes. 4-Create Changes This part, of all the steps in the process, is the most obvious and easy to understandbut is also the one that can cause the most headaches. There are many ways to get changes done. Most organizations know who will be making the changes before they begin the process at all. But the nature of the changes is rather important, and it dictates some guidelines in choosing who should be making the changes and how they should be managed. The changes might be on the content side (for instance, a different offer), the design side (a page thats easier to understand), a technology side (the page needs to load quicker), or an information architecture side (the important page needs to be easier to find). Most organizations will know where to find the capable folks to do this kind of work. It is important, however, to be economical in the types of changes that need to be made. The effective changes might be very simple. They might take an hour. Of course, they might take much longer. But they might just take an hour. The implication is: Be careful that the group involved in recommending changes has nothing to gain by making lots of them.

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Now weve defined our drivers, configured our toolkit to measure relevant activity, identified and planned to fix a problem, and executed the action plan. How do we know it was worth the effort? Soon, well know. Well know because we will measure whether it was worth the effort. Now we have to go back to our web analytics platform and put it to work once again. 5-Measure Success Using the same criteria that we used to discover a potential problem area, we now run fresh reports. That means: the same criteria, over the same elapsed period of time. We may need to re-instrument the pages now that they have changed. But the measurement criteria must stay the same, or the measurement will be rendered statistically meaningless. If things have worked out well, well see a jump in the percentage of prospects that were converted to customers. In our hypothetical case, that means: more of the people we wanted to contact us, are contacting us. If weve placed a value on each of those contacts, each percentage point gain can mean significant dollar gains for the organization. Often a gain of just a few points can mean the difference between the site being a contributor to the bottom line, and an expense. Lets assume that were reasonably happy with the result of our exercise. Weve been able to define what we want from the site. Maybe weve even given a dollar value to each contact made through the site, enabling us to understand exactly how much each percentage point gain might mean to us. Then, weve followed all the steps and ended up with a 3% improvement in contacts made. Can we do better? Probably, we can. In that case, we can go ahead and try to plan additional actions to drive even better results.

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Repeated rounds of measurement and change will lead to enhanced results. Now weve completed a full cycle of web optimization. Weve defined our objectives; measured activity; planned and executed actions; and proven the result by measuring our success.

As contribution to the bottom line becomes necessary, web analytics becomes a way of doing business.

Taking Ownership of Web Optimization Now that weve improved the site, it might be comforting to think that weve reached the finish line and can now end our web optimization project. Wrong.

Rather, as contribution to the bottom line becomes necessary; and as the ability to report accurately about contribution becomes absolutely essential, leveraged web analytics becomes a way of doing business. To lead the way in web optimization, we want to go through the above process early and often. We should always be looking out for ways to improve the site. Constantly trying to get a better sense of our customer. Continually aligning our site to respond to the evolving needs of our clientsand the always-changing competitive environment. Not as an I did that already exercise. But as a way of continually breathing new life into both the site and the organization. Simply, by treating the web as the critical marketing tool that it is. There are more dimensions of web analytics for us to explore. Within each step there are a number of critical factors that will drive real-world decisions about the site. The next chapter begins to discuss these in more detail.

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Chapter 4 Get em and Keep em: Understanding How to Reach, Engage, Convert and Retain Customers
Imagine for a moment the five steps we talked about as a stack of building blocks, and were looking at them head on. Below, youll see they look like boxes with their names lined up next to them (figure 1). This shows us a topto-bottom progression of things to do in order to achieve optimization. We are now going to add an extra dimension to our stack of building blocks by talking about how each of the four items in the title: Reach, Engage, Convert and Retain, fits within each of the five steps. These four items: Reach, Engage, Convert and Retain, form a customer-centric conversion cycle, and proper understanding of how each one works will enable us to maximize our ability to sell to and retain clients (figure 2).

Define Drivers

Build Metrics

Plan Actions

Create Changes

Measure Success

Figure 1: The Five Necessary Steps

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In other words, we have to perform each of the five optimization steps so that we can better Reach our prospects, Engage them in interactive relationships, Convert them to clients, and Retain them for valuable repeat business. To visualize this, add four stacks of blocks, each five blocks tall.

Customer Cycle Reach Steps Define Drivers Engage Convert Retain

Build Metrics

Plan Actions

Create Changes

Measure Success

Figure 2:

with Customer Cycle

Go ahead and cross-reference this for a minute. For instance, we are going to be looking at the intersections of two concepts like Define Drivers and Engage. Meaning, we will talk about what we want to engage our users to do. Or, we might talk about Plan Actions and Retain. Here well want to understand what we can plan to do on the site to retain users better than they are currently being retained. Definitions First, lets agree on what the terms mean. A number of these concepts already have pretty wide currency in off-line marketing. Were here to

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define what they mean on the web. Reach This is how we get them to arrive at our web site. It might be by putting a big billboard on the highway with our URL. It might be by purchasing a link on Google. It might be a button on another web site that is owned by our organization. Doesnt matter. Reach is how we get them to show up in the first place. Engage Our visitors are of little or no use to us if they arent engaged. Are we happy if they get to our home page, see our companys name, and leave? Of course not. Thats almost worse than if they hadnt come at all. If theyve done that, they have definitely not been engaged. But, what about if they clicked on one more pageand then left? Still not so good. Okay, how about if they went to four pages; then came back the next week and went to five pages; and then clicked on an about our product page. Twice. Thats an engaged prospect. We want to treat them differently than the fellow who moused over a couple of jpegs on the home page and then went to another companys site(see Plan Actions, above). Convert While the definition of engaged can be a little gray, the definition of converted ought not be vague at all. Convert links right back to the original, strategic driver that may have been defined at our hypothetical meetingthe one where it was decided that the site needed to refer contacts to the sales force. A prospect is only converted once they have performed the desired action.

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In our hypothetical case, that would be when they have in some way contacted (or asked to be contacted by) the company. At this point, the web site has done its most important job. Not its only job. But its most important. It got someone to do what we wanted him or her to do: to buy, to call, to stick around, to get information quickly. Any of these would qualify as true conversion, depending on the type of site we have. Retain The cost of keeping a customer is much, much less than going out and acquiring new ones. So well want to pay special attention to folks who already bought from us, or who have already contacted us. In other words, well want to retain customers who have been converted from prospects. The site needs to be constructed in such a way as to accommodate these customers. Discounts, targeted offers, customized, cookie-driven content all play their roles. Usually, well know weve retained a customer when weve succeeded in getting them to repeat or upgrade their prior conversion. But along the way, well want to be able to tell if their usership is falling off, or if they have once again gotten into a buying pattern and then abandoned it. Well want to examine that and see what can be changed to fix thatand to keep those folks engaged until their next purchase. The Four Types of Sites Now weve got a series of actions that we can take; and we have spoken about the way we want to pull potential customers through the conversion and retention process. But before we can begin any of the careful planning that gets web optimization accomplished, we will want to understand and agree upon what type of site we have. Because the goals of our site will be determined by which type of site it is. We will propose that for our purposes, there are really only four types of

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siteswhile recognizing that some sites combine certain of these elements. In our list, we have named the type of site, and in bold, the result we expect from that type of site. The Four Types of Sites Commerce: sales Lead-generation: contacts Content (and sometimes Branding): long, trackable visits Self-Service: quick, valuable visits Once weve agreed on one of these types of sitesand we contend there are few if any sites that are not one of thesewe can begin the process of optimization. We begin by deciding what we want out of our siteand the customer-centric approaches we need to take in order to drive results. Lets visualize this as it relates to the table that weve created. Weve got five sequential steps to perform in order to improve our ability to Reach, Engage, Convert and Retain customers. But depending on the type of site we have, our considerations and our deliverables will be different. For instance, if we are planning our actions for improving the engagement process for a content site, that is going to be a different task than if we were doing the same for a self-service site. Now well take the table and make it three-dimensional by adding the types of sites. This gives us a 3D cube that happens to illustrate for us how we can structure our thinking through the entire process, no matter what type of site we have. Lets take a look (figure 3):

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Web Optimization Cube

Five Optimization Steps

Define Drivers Build Metrics Plan Actions Create Changes Measure Success Content E-Commerce Lead Generation Self-Service Reach Retain Convert Engage

Site Type

Customer Cycle

leveraging web analytics

Technology Leaders, LLC (www.technologyleaders.com) 230 Park Avenue, New York, NY 10169 (212) 808-3058 analytics@technologyleaders.com

Figure 3: Web Optimization Cube (Copyright 2008 Technology Leaders)

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We now have a structure where we can collect and retain ways we want to approach each part of the web optimization process. And, we can ask important questions by looking at different instances of the cube, for instance: How do we Define the ways in which we want to Engage users in a Lead Generation site? Or: How do we Build Metrics to measure how we Retain people in an ECommerce site? Rather than try to fit all our words into cubes, lets allow the illustration to be a theoretical guide; and give ourselves some space to lay out the plans. In order to facilitate moving ourselves through this process, lets take a look at a sort of working guide that gives us a way to track the tasks necessary in each part of the job. Turn to the next page to find the detailed working guide.

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Working the Process For each of the five steps to web optimization. . . Define Drivers Build Metrics Plan Actions Create Changes Measure Success . . .we have included detailed tasks that comprise each step. These tasks are associated with the four customer-centric, relationship-building disciplines that are necessary to drive web success: Reaching Prospects Engaging Prospects Converting Prospects to Customers Retaining Customers We also know that our tasks will be different depending on what kind of site we are: Content E-commerce Lead Generation Self-Service The Five Necessary e5o Steps: Detail 1. Define Drivers This strategic part of the process really asks only one question: what do I want visitors to do? So while other parts of the customer-cycle are important, this part focuses rather tightly on the Convert part of the cube. Weve included a number of questions, below, that will help inform the strategic discussion. Please use them as guidelines to keep the project headed in the right direction.

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Generally, as a part of defining drivers, we will want to have: Identified stakeholders within the organization Discovered the specific needs they have from the site Socialized the concept of Web Optimization and Web Analytics by discussing its importance and presenting industry examples The goal here is to obtain sufficient buy-in so that the team will stay with you as you lead them through the rest of this process. Lets begin to define what we want to achieve (e.g. define drivers) inside each part of our customer cycle. Reach Here we are asking Who do we want to reach, and how do we want to reach them? Well want to: Identify techniques already in place to reach prospects and get them to the site Define the characteristics, categories, and sizes of target audiences Identify the offers we are currently making to attract prospects to the site Engage Now were asking What defines engagement for us? In order to clarify this, pursue the following exercises: Identify visitors likely goals upon arriving at the site (map to offers, above) Identify the first steps we want visitors to take in order to lead them to conversion Build a visual map of this critical path. Establish relative importance of pages and what criteria would determine a successful visit to a particular page (time spent, clickthrough, etc.)

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Convert Here, as we define what conversion means for us, we are deciding on the whole reason we have built this magnificent information engine known as a web site. Its all about funneling prospects to perform this (or this series of) action(s). We will want to: Narrowly define what activities constitute conversion o Recognizing that in some cases conversion may occur off-line Establish a monetary value for each conversion Decide if there are different levels of conversion, and what the relative importance of each one is (e.g. a phone call to a sales person is better than an email to an info@). Make sure we are focused on one true conversion goal, as opposed to numerous soft goals. Retain Here we are determining how important repeat visitors are to us; how important upsell and cross-sell is; and how we will determine what constitutes having retained a customer. We will: Decide upon whom we want to retain as a customer Accept the cost at which we will attempt to retain them Specify behavior that will satisfy our criteria for retention Understand how much that behavior is worth. It should be a number derived from: Profit on items sold Cost savings related to infrastructure (for example) webusage v. phone center usage Amount saved on new-customer acquisition Cost of retention efforts When we have finished the key task of defining what we want in each of these phases, we can begin to build the measurement program.

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Build Metrics Here, we need to select, design and configure a metrics program that maps to the four stages of our customer-centric lifecycle. Weve provided some broad examples below. Reach An example of the types of things well want to do to establish measurement programs include: Identify how well track ad campaigns and e-mail campaigns Identify how well measure the success of affiliate marketing Set up measurement for such things as key referring pages Build a method to track search-engine effectiveness Identify the number of people reached by each technique employed; and what percentage of the target audience has been reached Engage Identify new as well as returning visitors Measure number of engaged visitors by reach technique Review freshness factor (e.g. ratio of content freshness to visits) Identify and measure behaviors of browsers v. shoppers Review ratio of engaged visitors to total visitors Measure profile of typical buyer-paths; identify percentage of fall-off of visitors at different pages along the way to conversion Convert Measure number of conversions for each reach technique Measure conversions of various types of visitors Measure scenario completion rates (e.g. how many overall visitors finally converted to customers?) Measure ratio of conversions as a percentage of engaged visitors; finalize locations where visitors are dropping off Identify visitor paths most associated with conversion

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Determine the average number of visits necessary to convert Measure how many average visits were required to achieve conversion Retain Measure duration of visit Determine frequency of return visits for converted customers Review how recent are the typical conversions of return visitors Review the rate at which converted customers do not return Review the rate at which customers who nearly got converted, do not return Plan Actions As part of this process, we will analyze the collected metrics, perform new measurements based on emerging data (sometimes with multiple variables); and we will try to integrate measurements into a unified visitor behavior model. We will also plan actions that help us optimize the effectiveness of our customer-centric cycle. It is important to note that at this point in the process, our tasks will have become very specific and we should be able to enumerate a high number of specific tasks within the Create Changes and Measure Success parts of the worksheet. These phases will naturally have fewer theoretical tasks, thereby shortening them in comparison to some of the earlier sections in this chapter. Reach Adjust marketing efforts, affiliate programs and offers to reflect findings in measurement phase Optimize search engine techniques Maximize inbound-link campaigns Review and adjust digital ad and email campaigns Engage Adjust landing pages Adjust critical path pages Adjust content focus

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Review creative; may result in redesign or re-think of creative approach (with metrics built-in to new creative) Refine personalization process Convert Shorten the path to conversion page Optimize conversion page based on user behavior measurements Adjust "offer" to reduce amount of visits it may take to successfully convert Retain Develop strategies to entice return visits Follow-up campaigns Value-based offers Seek user opinion Locate efficiency engines within the site; attract users to return to them Create Changes This part of the process is focused on getting concrete changes made. Consequently, the actions here are entirely dependent on the previous three steps and will differ in each application. Now it is simply a matter of executing the plans. Naturally, each stage. . . Reach Engage Convert Retain . . .of the customer-centric cycle will have specific production deliverables. The overall objective, apart from the specific changes required, is to make certain that metrics are built into the site from this point forward. The site will generate more useful information this way, rather than retro-fitting an existing site.

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Measure Success Using the same drivers that we defined at the beginning, and the same measurements, we will measure again to determine the effectiveness of the changes we made for each of the four customer-centric stages of. . . Reach Engage Convert Retain . . .while recognizing that improvement is a constant goal, not a final goal. In that light, the Plan-Create-Measure phases of the process should be considered iterative. Since web optimization is not a do it once and walk away operation, its important to understand that we will want to work again and again to continue to improve upon what was already improved.

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Chapter 5: Conclusive Evidence: The "How Do I Make This Happen?" Part

The organization that wants to achieve successful web optimization needs to take a few critical steps that will pave the way for success. Weve already discussed the five-step process, the four site types and the customer life-cycle. But what about the ways in which an organization prepares itself to perform web optimization? Here are some considerations: Organizational Steps Recognize The first thing to do is to recognizeas an organizationthat leveraging web analytics is the key to success. There really is no substitute for decisions made using quantitative knowledge. In many companies, theres likely to be a considerable amount of selling through of the concept before it is fully embraced. It is natural that some folks may be sensitive about being judged on the performance of the site. Or, therell be people who are likely to say dont measure yetwait until I fix it. These are understandable responses. But for the organization, they may not be the best course of action. The best option is to get the facts about whats going on with the site and plan actions around improving performance.

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Therefore, for those who contemplate putting off the decision to measure: The best way to avoid being judged by web analytics is to embrace it nowand achieve web optimization!

There really is no substitute for making decisions based on quantitative data.

Align Too often, theres a schism in organizations between the IT folks who run the web architecture (and usually the web analytics tool) and the business-line folks. Web analytics is often seen as an activity lying wholly within the domain of the IT department. True enough, the robust technologies that support web disciplines are properly placed inside IT. But the value of web analytics is relevant only partly to IT (e.g. errors, speed, etc.). The major portion of the value is relevant to the business side: to Marketing, to Sales, to Customer Service. When the IT group gets together with customer-oriented groups within the company and they coordinate their efforts, good things start to happen. They are able to achieve results with web analytics that are much superior to those that result when one group or the other tries to proceed alone. The best way to structure this type of cooperation is: Marketing folks need to understand the discipline well enough to ask the right questions; and the IT department needs to configure the web analytics tools to provide answers to those questions. Embrace The Five Step Process is indispensable to web optimization. Simply put, an incomplete process will not gain the desired result. Remember, the object here is to show a measurable improvement on specific goals. It can only be achieved by following the program from beginning to end.

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Design the web analytics program and stick with it. Deciding halfway through the optimization project (for instance) that what we really wanted was to take a gamble on providing on-line billing statements, negates the effort. Do the measurementand then listen to what it says. It may turn out to be that the above-mentioned on-line billing is not worth the effortbut measurement may indicate that moving the buy page three places forward in the architecture of the site will generate a measurable return. Report If a web site is improved in the forest, nobody can hear the cheering. Or something like that. Just as most marketing efforts are tracked and reported with some thoroughness, web analytics needs to be treated with the same rigor and importance. Therefore, report the improvements, and how we got them. But dont forget to report progress along the way. That way, well build a constituency of support for web analytics. To build this constituency, formulate web analytics data into targeted reportsa different report for each important group within the company. Make sure the reports are action-oriented, with data provided as supporting documentation. Keep the focus on news and to-dosand away from presentation of statistics by themselves. Paired with web analytics software, the web site is a torrent of information about our customers. Irrigate the company with this unique and critical intelligenceand the crops will grow greener. The web represents a conundrum of sorts: it is the only business tool that automatically generates its own effectiveness data (via web analytics soft-

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ware). But it is also the only business tool that has almost no other way to evaluate it except for this data. Leveraging web analytics is therefore both very valuable and quite unavoidable for those who want to maximize the effectiveness of their sites. Wraps Weve identified a process to optimize any type of site. Weve identified the drivers we should expect in each of four possible site types. Weve also identified the customer life-cycle on the web. We hope that these concepts will help your organization deliver on the promise and the power of web analytics. If you have any questions about this guide or about web analytics, please feel free to contact Technology Leaders at the locations provided on the following pages.

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About Technology Leaders: Technology Leaders is the world's most experienced web analytics consulting company. Founded in 2002, the firm is expert in the deployment and customization of all major vendor offerings in the current web analytics space. It uses web analytics tools to measure user activity in a way that is meaningful to the organization. TL's consultants then draw upon market expertise to make sense of what was measured. Finally, TL helps customers take action by improving, optimizing, and measuring again to prove effectiveness. Organizations can now rely on one company to deliver a complete package of implementation, analysis and the ability to measure improvement for web sites. Technology Leaders Contact Information:

Technology Leaders, LLC 230 Park Avenue New York, NY 10169 (212) 808-3058 info@technologyleaders.com www.technologyleaders.com

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About the Author: Andrew Edwards, the founder and Managing Partner at Technology Leaders, is a recognized e-business expert and pioneer with significant credits in on-line marketing, web architecture, project development, and web analytics. In the 90s he founded an award-winning interactive design agency servicing Fortune 50 customers and launched several brands on line. Expert in identifying and capitalizing on market opportunities, he is also an accomplished interactive designer and technology professional. He co-founded the Web Analytics Association in 2004, and is the chief architect of the web analytics approach developed by Technology Leaders.

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