Category Archives: Analytics

Digital Marketing Metrics – How To Convert Customers

There is much talk in digital marketing about how to generate visits to your website but of course that is only half of the challenge.  If you run an ecommerce site you want people to buy from you.  To use the traditional terminology you might say the strategy for driving visitors to your site is your acquisition strategy and the strategy for getting them to buy from you is your conversion strategy.  Once visitors are on our site we need to maximise the conversion rate.

Having fun with funnels

Google analytics uses conversion funnels to enable you to track the movement of visitors through your website.  If you are selling products you clearly need to structure your site in a way that leads customers through a clear and logical process to a ‘goal URL’ which might for example be the Thank You page after check out.  You are likely to lose visitors at each stage in the process but it is the marketer’s job to minimise the ‘wastage’ at each stage.

How Conversion Funnels work

In the example above visitors to the site are shown at the top level.  We can track where visitors came from and which page they landed on.  As we move down the funnel visitors get nearer to your goal but visitors are lost at each stage.  Some may leave the site, others may visit another page and not follow the direction of your speficied goal.  Let’s take a look at some of the stages in the conversion process shown in the funnel:

  • Bounces – the bounce rate is the number of visitors who leave the site without visiting any other page.  High bounce rates might be a sign that your content is not engaging visitors or you may be driving visitors to a page that is not relevant for them (time to look at your SEO and inbound link strategy!).
  • Browsers – here visitors are moving around the site and may be visiting a few different product pages for example.  The site is engaging interest at some level.
  • Early Waverers – visitors at this stage may be looking at specific product specifications, prices or product guarantees for example.  They are deciding whether to go to check-out.
  • Late Waverers – these are visitors who actually go into the checkout process but abort before the payment stage.  Perhaps the checkout process is too slow, confusing or does not feel secure?
  • Conversions – visitors reaching this stage are the ultimate gauge of success for our marketing objectives.  They have moved through the whole buying process and purchased a product or service.

How to improve conversion rates

Conversion funnels show us the stages at which we lose customers but not why we are losing customers – so we need to experiment.  Say your check-out process goes Billing >Shipping > Payment > Review > Thank You.  If you discovered that you are losing 40% of click-throughs from the shipping page you could test different elements of the page.  For example, are shipping options confusing?  Is the next call to action clearly displayed?  Are shipping costs uncompetitive?

By changing significant aspects of ‘problem’ pages, one at a time, you can use customer behaviour to determine what is wrong and how to fix it.  Amazon, for example significantly increased conversion rates by introducing their ‘One Click’ option making the checkout process as simple as possible.

Don’t just analyse – act!

One of the great advantages of digital marketing is that we have a wealth of analytical tools available to us – many of them free.  However, information is no use unless we can act on what it tells us.  That’s why testing and experimentation is really what comes after web analytics and where the time honoured rules of direct marketing testing can be bought into the digital world.

Digital Marketing Metrics – The Fundamentals

If there is one thing that all successful online businesses share it is a real understanding of what works and what doesn’t when it comes to digital marketing.  A strong understanding of how marketing efforts are paying off is crucial to ensure you get the most from your online investment.  The great news is that there are a huge number of possibilities for measuring online marketing success, so many in fact that it pays to start by thinking about the basics.

Traditional vs Digital Metrics

Before direct marketing came along traditional advertising, particularly brand advertising was very difficult to measure in terms of ROI.  Direct Marketing was built on being clearly measurable.  You could calculate your ROI for all of your campaigns and use testing to adapt and improve future performance.  That is also the basis of measuring metrics online but we now have some big advantages including:

  1. More measurement options – you can derive a much greater array of information from online customers than you can for offline by tracking their behaviour.
  2. Speed – you can measure customer behaviour in real-time.  Try doing that with direct mail!
  3. Cost control – for example if you are spending money on PPC campaigns you can set daily and campaign limits for spending so there is no wasted budget.

Basic online metrics

The most popular method for reviewing digital metrics is google analytics.  You can generate well over a hundred different reports using this tool but first things first.  The most basic metrics you find on your google analytics ‘dashboard’ are:

  • Visits – total number of non-unique visits to your site
  • Page views – total number of page impressions i.e. number of times pages have been viewed
  • Pages per visit – an average number of pages viewed by each visitor e.g. 2.9
  • Bounce rate – the number of visitors leaving you site after viewing only one page
  • Average time on site – otherwise known as ‘stickiness’.  How well the site maintains visitors
  • % new visits – how many visitors have first timers on your site

These metrics serve a purpose but if you are selling something online you need to look deeper.  The first question to ask is ‘What is the goal of my website?’.  You may have a number of goals but if you are in business your main goal is likely to be to sell X amount of X product, generating X amount of revenue.

Start with Goal Setting

Google analytics enables you to set-up a number of goals and run reports specifically to check how well you are doing in achieving them.  Say your current goal is track how many visitors are reaching the checkout page on your site i.e. buying a product.  You can set up a goal called ‘Buy Product’ and define this as a ‘URL destination’ goal.  This will then enable you to report on how many times visitors reach the Confirmation of order page.

Different types of goal

Even the most hardened capitalist should be interested in more than just sales – you need to understand what leads to sales.  Digital marketing success needs to be measured in more holistic sense.  That’s why google analytics allows you to measure goals in 3 ways:

  • A URL destination goal – allows you to see how many times visitors have visited a certain part of your site.  For example, if they sign up for your email newsletter each time they do so a URL will be displayed.  Google Analytics will count how many times that URL is reached so you can measure how many users are signing up against your objectives.
  • Time on site goal – this is a useful metric because it helps to prove how engaging your content is which in turn helps to show how engaged customers are with your site.  Engagement increases your chances of making sales and building a loyal customer base.  In 2010 the average website visit was 5.2 minutes according to google analytics.
  • Pages per visit goal – this helps to show much navigation around your site the average visitor is doing.  Your goal might be to get visitors to visit at least 5 pages.  Your report would then show the percentage of visitors doing so.

So these are a few basic but useful ways to measure your marketing goals online.  When getting started for the first time the most important thing is to have a clear view of which pieces of information are most important for measuring success, your key performance indicators (KPIs) and to produce a number of structured reports for delivering that information.  In my next post I will look conversion funnels, another important measure of your digital marketing performance.