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Data is Powerful

As we dive into this data-driven world, it’s important to understand what challenges lie before us. No longer do we find ourselves thirsting for real-time information. Instead, we quickly discover that we can easily be drowning in an overflowing stream of numbers (though hopefully not in this high-level  introduction to digital analytics). As the current grows and the flood ensues, it is easy to miss the lifeboat and find yourself swept downstream in data.

You might have a blog post take off via a site like Reddit and find yourself with tremendous traffic. Great! But does this move the business or social cause forward?

Fortunately, we have spent some time defining our Key Performance Indicators (KPIs) way back during the Strategy phase. This simple exercise of identifying what we believe to be important triggers (actions taken by users) that define the success of our online marketing suddenly becomes incredibly valuable.

Using web analytics, we can look beyond spikes in traffic (dramatic increases) and determine whether these tie back to the bottom line. If a referral source like Reddit leads to a spike but the users don’t convert (aka. take the actions we want them to, as defined by KPI’s), then we will want to focus our efforts on higher converting sources.

By doing the hard work of understanding what we are measuring in the experience and why we are doing it, we can start to have a north star to navigate by and answer questions like: Should we be on Facebook? Is our PR actually working? Which efforts are leading to the best results? The worst?

The Problem with “What”

With web analytics we can measure the clickstream as a historical or even real-time event. These digital fingerprints give us clues on what happened. However, this poses a paradox. You can look at historical events like the stock market crash of 1928 or the Cuban Missile Crisis and very quickly understand what happened.

However to understand why these events took place requires much more time to understand the variety of factors that led to their occurrence. This gets messy. You can’t understand the Cuban Missile Crisis outside the context of the Cold War. Which brings up the rise of the Soviet Union’s influence in Europe after World War II. Add on top of that the development of nuclear weapons and the sudden reality of mutually assured destruction. Now don’t forget about the Domino Theory and the fear of the spread of Communism. The Soviet’s launch of the satellite Sputnik and perceived technology prowess has to be accounted for in the Kennedy Administration’s calculations. Finally, make sure you consider the Cuban Revolution and Fidel Castro’s influence and his relationship to Soviet leader Nikita Khrushchev.

Suddenly, a seemingly simple event that happened, like the Cuban Missile Crisis, becomes an incredibly complex topic when the basic question is raised: Why did this happen?

In a digital experience, unwinding the “what happened” with the hard work of “why it happened” can be no different. To do this takes a quantitative and qualitative approach. The data of what happened (the numbers or quantitative results) and why it happened (observing users for clues or qualitative results)

Let’s Take a Closer Look

Tad: NEED SCREENSHOT DIMS AND EXCERPT

Here, we can see that 322 users came to a “dummy” website from Facebook. Notice the spike on November 22 (far left of the graph). The “what” is that 81 users (far above the average number) came from Facebook that day.

This begs the question: why?

Why did they click over from Facebook? Was it the topic? The photo we posted? The call to action? The shortened URL? What if we had posted the longer keyword-rich URL? How about the time of day we posted? What about global time zones?

We can hypothesize and come up with some good guesses but the true answer will probably elude us for this one instance (and the amount of work may not be worth getting at the reason). Here is where we have to pick our battles and constantly redirect to our “north star” KPIs to determine where to focus and when.

At the same time, we should not be afraid to set up and run little experiments based around different hypotheses. For example, why don’t we post at 1pm EST for two weeks and track if it earns us more shares on Facebook?

Understanding Website Traffic

The ability to anonymously measure a user’s interaction with a digital property like a website or app is what helps separate digital marketing from traditional marketing. In the past, approximations using tools like focus groups or statistical sampling were our best guess for how marketing campaigns might resonate with a target market.

For many companies such primary market research was simply too expensive to invest in. So, marketers would hope for the best with mass media buys and attempt to measure (unsuccessfully) which channels drove sales. Was it our print campaign? Our radio? Our TV spots? A combination of everything?

The feedback loop for this investment was long and leaky at best.

Not All Engagement Is Equal

To build on our discussion of Paid, Earned, and Owned media the topic of quantity is of great interest. It is human nature to view growth at a basic level and, as long as the trend on the chart is moving up and to the right over time, assume all is well.

Quick metrics like overall site traffic, Facebook likes or Twitter followers provide a quick and easy number but they can easily mask true engagement.

Let’s say it again: Remember, not all engagement is created equal.

If the digital marketer focuses exclusively on general metrics like overall traffic or followers, much can be missed.

Instead, we must dig deeper and see what people are doing. How are they interacting with our digital property via their clickstreams? We’ll dive into that in a second but first…

What’s a clickstream?

This term refers to the “digital fingerprints” that users leave behind when they interact with a website. Each click (or finger tap) on things like a button or navigational element is able to be recorded using some sophisticated technology behind the scenes on a website or app.

A clickstream is the recording of the parts of the screen a computer user clicks on while web browsing or using another software application. As the user clicks anywhere in the webpage or application, the action is logged on a client or inside the web server, as well as possibly the web browser, router, proxy server or ad server. (Source)

Clickstream data analysis allows us to get deep insights into how users are interacting with the digital experience. This feedback loop provides the foundation for evaluating all our digital marketing efforts. Whether we are using paid media for buying ads on Facebook to hyper-target our users or leveraging owned media and seeking to rank on Long Tail keywords, analytics gives us the tools to measure the quality of these sources and compare them to our Key Performance Indicators (KPIs).

In this section, we will split our Measurement focus into two areas: Quantitative (measuring the hard numbers) and Qualitative (measuring the people).

As with most topics in this text, we are merely scratching the surface of some fairly complicated subjects. This is especially true for web analytics. Our goal is not to necessarily make you an analytics expert but rather to give you an introductory overview. We would always encourage you to dig deeper on particular subject areas and this website covers digital marketing fundamentals.

How to Think About Website Retention

Our last bucket for managing customers after they have completed a desired action is called Retention. At this point, the holy grail has been attained and the customer has converted per our major KPIs.

Again, this is highly dependent on the business model but for many companies a major conversion is usually purchasing a product, downloading an app, or requesting more information. This signals the customer is ready to buy, has purchased already, or is willing to engage beyond a casual visit.

This is indeed a major milestone for marketing but our work is far from over.

As marketers we are constantly tasked with growth. Which usually translates into gaining more customers. This of course has a cost associated with it – our infamous CPA. So, we put our heads down and work feverishly on developing new ways to earn attention and drop CPA.

Sadly, those that have passed through the funnel and are now on the other side as customers or users are quickly forgotten. They do not receive any attention for recognition for taking a chance on us.

Now this scenario may reek with a bit of hyperbole but for many companies it is a reality. Out with the old and in with the new. If a business is highly dependent on growth, such as in the case of venture capital backed startups, current users or customers are old news. The question becomes, “Yeah but how many new users signed up today?”.

However, a wealth of insights and data are at our fingertips with current customers. First of all, we know they bought or opted-in from us once. If the experience was superb and the brand stands behind all its promises, we will likely have a good shot of earning a repeat purchase or engagement. Over time the Customer Lifetime Value (CLV) can be extended and as we saw way back with our online shoe company, the CPA will continue to fall with repeat purchases or usage.

Here is where the digital marketer must go the extra mile to guarantee this scenario happens. Retaining current customers is all about listening, rewarding and where appropriate promoting. Not all customers want this type of attention but those that do have to be treated differently.

A quick checklist for ongoing Retention:

1. Do current customers receive ongoing special treatment? This doesn’t have to be discounts or coupons. It can simply be a dedicated email campaign with exclusive insider tips and copy that explains why they are receiving this as an expression of gratitude for buying from you. Make sure you deliver true value here or they will feel like they received a digital white elephant gift.
2. What are you doing for those that love you? Invite your “evangelists” – those that sing your praises – into your product development mix. Ask them why they love you and focus exclusively on what you can be doing better to build better products or experiences. Build these relationships and you’ll eventually have a volunteer sales force spreading the word on your behalf.
3. Do they get insider access? Exclusivity is a powerful motivator. We all want to feel part on some level as part of the cool kids club. Pre-releasing or giving insider access makes these current customers feel vested in your company’s success. They’ll stick up and defend you online in forums. On blogs. On social media. They want to see you succeed because they are part of the club. When the chips are down they come to your aide.
4. Why did you leave? Strive to get in touch with those who have dropped off or have quit purchasing. Offer a simple gift card in exchange for their time to collect their feedback. This can sting a bit but sometimes the truth hurts. If you are bleeding customers at a growing rate, you must get to the root cause on why Retention is failing.

Key takeaway: In your quest to produce growth, don’t neglect those that are already on board. Brainstorm ways you can make them feel special and prove how much you appreciate their attention or business. Focusing on Retention can be one of the most economical and yet powerful ways to grow positive word of mouth and build brand momentum.

Nurture

Knowing that the vast majority of visitors are not ready to convert means we have to approach this marketing problem like that of a gardener. A visitor might opt-in for a newsletter or Like us on Facebook. They’ve given us their permission (a truly sacred thing) for us to reach out and communicate.

We have planted seeds and now we must water them and be patient for them to sprout.

The responsibility at this point is to return value. Again, if you’ve been following along with this text this comes at no surprise.

If we lose sight of the awesome responsibility of attention being the true currency online, we’ll slowly cannibalize all our work to date. Pushing sales in an overtly way will land us in the spam bucket and slowly eat away at our list of people willing to engage with us. Remember everybody loves to buy but nobody likes to be sold.

Instead, we must bring our new friends along in a consistent way that respects where they are in the buying process. For B2B companies this might take months or even years depending on the purchase decisions. Here our outreach efforts help with top of mind awareness. We might share a customer story of how they solved a particularly difficult problem or an interview with an industry leader sharing insights and tips on how they solved a relevant problem.

What tools exist for nurturing online marketing?

1. Email marketing – by far one of the most effective ways to reach consumers despite being around forever. KPIs like open rates (how many of your opt-in list are opening your email) and click-thru rates (how many are clicking the links in the email itself) show you engagement at a high level. Various platforms exist for making this a turn-key exercise.
2. RSS feeds – This technology allows a website to push updates out whenever a site has fresh content usually coming from a blog. For tablet apps like Flipboard or Google Current, readers automatically have fresh content without visiting your site directly. KPIs like the number of subscribers to your feed show a rough level of engagement.
3. Social media – Reference your Social Technographics and User Persona to make sure you pick the right tool. However, tools like Facebook, Twitter, Instagram, Pinterest, and Foursquare allow you to interact directly and almost instantly with your users.

Key Takeaway: Not all our acquisitions will be ready to convert. A solid nurturing program through tools like email marketing and social media help us earn the chance to be considered for a conversion at the right time. Our responsibility is to not take this permission lightly and reward their attention with a helpful or entertaining experience.

Managing Website Traffic

At this point, we have traffic flowing into our digital property from Owned, Earned, or maybe even Paid sources. We’ve survived a technology build and are in the thick of executing against our KPIs.

What to do with all these website visitors?

Watch Conversions

Engagement on a digital property usually has a purpose as it relates back to the business objectives. Digital marketers usually call this a “conversion”, as it notes the user has converted over to completing a desired action. Examples of this might include signing up for an email newsletter, completing a purchase of a product, or downloading a whitepaper. These should be ideally tied to the KPIs defined in the Strategy exercise as they can be measured with analytics – we’ll cover this more in the next section on Measurement.

However, not everyone that comes to our property will be ready to complete an action. In fact, the vast majority of our visitors will probably not convert. Current stats show most properties can convert anywhere from .05 – 10%.

A recent study shows a rough breakdown by industry:

Also, don’t forget conversions can also be defined along a variety of metrics. Sometimes divided into macro and micro conversions. To the uninitiated, these can be “vanity” metrics like a conversion counting users clicking on the Twitter follow button. This does not mean the user will follow the company off the Twitter page. It takes guts to honestly define KPIs and the conversions that follow.

The reason? A host of factors influence conversion: traffic sources, the business model, and where that visitor might be in the buying cycle as it relates to the price point at which we’re selling. Not to mention how they found the website to begin with. A strong word of mouth recommendation with a link within an email will likely convert much higher than a banner ad.

Let’s explore how conversions might relate to a business model beyond a typical ecommerce business.

For example, visitors to a media website may be coming simply for the content on that day and nothing more. The property is most likely seeking to monetize this engagement through advertising. So, a very basic KPI might be watching pages per visit and the number of unique visitors week over week using analytics. These traffic sources could come from Paid but most likely will originate via Owned on a social platform, search, or perhaps an email marketing campaign. The Earned traffic could come from a guest-blogging or mention from influencer across the web via their blog or a tweet.

So, we have traffic – now what?

Consider the following frameworks to help:

Traffic originates in the following ways:

1. Owned
2. Earned
3. Paid

Engagement can be organized in the following ways:

1. Acquisition
2. Nurture
3. Retention

So, each of our traffic originators of Owned, Earned and Paid will help us acquire users. Next, we will focus on nurturing them along in the buying process. Following a successful purchase (depending on what that might be defined as), we will focus on retaining them to earn their repeat business or engagement.

Key Takeaway: Knowing our KPIs from our strategy, we can work to define various conversion actions on our digital property and measure these against Owned, Earned and Paid. We can then organize the engagement around Acquisition, Nurture and Retention as it relates to the business model or buying cycle.