Friday, May 7, 2010

Not all traffic is created equal – a guide to ecommerce

By Conrad Owens

While recently preparing a report on the annual traffic to a large corporate website, I had many opportunities to pause and reflect on the nature of Internet traffic and the difficult job businesses have in procuring this traffic, holding on to it, channelling it in the right ways, and turning browsing into the business that will help the company increase profits and improve its bottom line.

A successful online business transaction has so many variables — some technological, but most human, that make the process of conversion less than an exact science. Web metrics have gone some way towards providing answers for measurables like click-through rates, attrition rates, cost per acquisition and return-on-investment (ROI), but they tend to address the what of browsing behaviour, and not the why.

The understanding of real user behaviour on websites is often based on broad assumptions made from analytics and user feedback, or information from small usability testing groups that could never hope to replicate the nature and complexity of traffic coming to the site.

I often draw the analogy of trying to understand the myriad of ways that shoppers interact with a bricks and mortar shopping mall. Could one possibly track in which entrance they came, the paths they followed from store to store, where they window shopped, paused to interact with promotional material, looked at products they didn’t buy, the time they spent on each activity, money spent or frequency of return visits? It’s virtually impossible. The reality is that the number of permutations are endless, and this reality also applies to web shoppers in many instances.

We also need to understand that the more sophisticated and intangible your product and brand experience is, the more ways people will find to interact with it online. Fast moving consumer goods have simpler paths to conversion and higher conversion rates than products like training courses, retirement annuities or online legal advice. Your job as an online business architect is to understand the ways that your products, the interface and your audience work together most effectively, and optimise the entire experience to take advantage of that.

So what should you be thinking about when trying to understand your traffic and the way it converts online?

Measure with analytics

If you can’t measure it, you can’t manage it. Although many webmasters have analytics solutions in place, it’s often the reporting and interpretation of these analytics that don’t go far enough in adding any real business value. It is no longer enough to be looking at the number of visits, unique visitors, page impressions or form submissions.

With a little learning, Google Analytic’s (free) Advanced Segmentation tools allow you to dig deeper into user behaviour by segmenting user types based on diverse variables ranging from geographic location to entrance page. It’s easy to build up multiple segments and test these against your conversion events to see which user groups are your most profitable. Thinking about these groups allows you to take programmatic steps to recognise users from those groups when they enter your site, and direct them more swiftly to conversion scenarios.

Analytics can also tell you about bounce rates, page depth, time on the site and entrance and exit pages, all of which provide important clues to how users are engaging, or not engaging, with your content and products.

Another useful tool in Google Analytics is the Goals and Funnels feature. This allows you to configure up to ten pages in a defined conversion path through the site, as well as to assign a monetary value to the completion of each goal. The interface provides clear representations of attrition rates through page sequences and can assist greatly in optimising pages and also your calculations of cost per acquisition or ROI.

If you are running paid display or search campaigns, event and campaign tracking will give valuable insights into the performance of particular ads or creative executions and how they convert. You should be making retention decisions about these ads as your campaigns progress, but even if your team is not agile enough to juggle creative material quickly during shorter campaigns, the data can be analysed afterwards to optimise your next one.

Using and understanding analytics can be time consuming and resource intensive, but there is no doubt about the value these metrics can bring if they are used consistently in providing ongoing feedback into design and execution.[...]

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