I’ve found that a tremendous amount of material relating to web analytics tends to relate to the needs of billion dollar companies or is so rudimentary that it provides little value except to those just cutting their teeth on the topic. There is a missing middle ground here, particularly for the typical SMB, where there are opportunities to better use available data within their existing systems.
Many SMBs are advertising online (as Microsoft’s recent survey showed 41 percent of small businesses are using paid search marketing), be it with AdWords or some other channel. However, in my own personal experience I’m still surprised as to the amount of companies that throw money at online advertising initiatives and don’t do any tracking (or simply don’t leverage the data available to them). I won’t bemoan this subject, but if you’re advertising online or doing any form of search engine marketing, start using your data! It’s in your own best interest to make sure you’re getting a return on your investment. Whoever is running your campaign, whether they are internal or external, demand that they provide detailed reporting. Basics here include click through rate, quality of visit, goal conversion and return on ad spend.
Going past this foundation of tracking your online marketing effectiveness, I’ll take the next logical step that many companies seem to miss, and that’s integrating web analytics data with their CRM systems. Strangely, many companies take great strides to track every imaginable offline initiative, from direct mail, point of purchase displays, to trade shows, online marketing campaigns are often ignored, despite the wealth of actionable data they provide. Actionable, of course, is the key word here. Given the fluidity of online marketing, the ability to shut down or modify a campaign that begins to lag makes all the sense in the world. Looking at things more optimistically, by plugging this data into your CRM, it offers the ability to identify missed opportunities and shift your campaigns to take advantage of these opportunities.
First, let me explain the disconnect, as I often see this working from an agency perspective. The client comes to us with the need of “conversion”. Whether that’s online sales or leads doesn’t matter. We, the agency, have a defined goal of converting traffic into one of those two buckets. On their end, our customer must either fulfill the order and then manage that business opportunity going forward, or take that lead and convert it into a sale. Most often, the client will be happy if the agency is providing a steady stream of purchases, and can show that their services are providing a solid return on their investment. Who can argue when your vendor is making you money, right?
Things get a bit dicier when it comes to lead generation, as there is a much larger gray area between an online lead conversion and that lead eventually signing on as a customer. Obviously, the customer is going to want as many high qualified, quality leads as possible, but assigning accountability to closing the eventual sale can easily become a point of contention. However, much like in the aforementioned ecommerce scenario, the client will probably be happy if they appear to be getting a steady stream of leads and can see that some basic metric for online lead conversion is being met.
These two scenarios are very common, and countless vendors, clients, and companies that manage this process in house are completely satisfied with this scenario. I would argue that this is just the tip of the iceberg, and it’s the fault of each side that complacency is reached at this early step in terms of utilizing data. For clients, I would think they should be more demanding of the long term efficacy of these online initiatives, and truly squeezing every last cent of profitability out of their campaign(s). It’s not enough to simply be getting a return, what about maximizing that return?
From an agency perspective, while it must be handled with kid gloves, it serves both sides better to push the client to truly get the most out of your efforts. If they have additional systems that can assist you in performing your service better, why wouldn’t you do it? It’s not as if there aren’t an overwhelming number of companies out there chomping at the bit to replace you (and many of these are probably a fair bit cheaper, as well). So to justify your price point, and to prove your value to your clients, it would make sense to be as proactive as possible lest you get left behind once a savvy CMO shows up and starts asking why you’re not leveraging every possible piece of data available.
In the offline examples mentioned earlier, it’s a safe bet that most companies, particularly in a time of tightening marketing budgets, gauge the quality of leads obtained at trade show events or from different versions of direct mailers and the life time value of those customers. This, of course, is a sensible, accountable approach to marketing. Doing anything less than this with online marketing, which actually can be done much more simply and granularly, is a missed opportunity.
Breaking it down to the tactical level, it comes down to leveraging the cookie data from your campaigns to track the minutiae of your campaign, and understand the long term effects of these details on your broader business goals. Cookie data can provide information on originating source of the lead, such as the referring ad, specific search phrase, PPC campaign, ad text and more. Over time, it’s not enough to know how well you’re turning web leads into business. You will want to know the specifics of which leads provide the best opportunity conversion rates. Perhaps even more importantly, you can see which sources are providing the best lifetime customer value. With this in mind, you can appropriate your online spend in a way that maximizes overall return for your client (making you an even bigger hero than you already are).
As an example, let’s say an online sporting goods retailer sells a variety of baseball equipment. For our sake we will say they only carry three product lines and have a campaign going for each. The three campaigns they have going, one for clothing and apparel, one for baseball gloves, and the other for bats all show acceptable conversion rates and return on ad spend. In many situations, this is the end of the line, with the client happily patting the vendor on the back and cutting them a check for their work each month. But wouldn’t it make a lot of sense to know which of these campaigns was bringing in repeat business?
What if they passed along the cookie data showing which keywords were driving their most profitable long term customers into their CRM system? With that data, we might find that customers who click on the PPC ads for baseball gloves rarely ever purchase another product. But customers who buy bats, we find, tend to buy at least one new one each year, making them far more profitable! This is valuable information to know when allocating funds for a PPC budget.
Taking it a step further, we may find that specific brands of bats (people who searched for Easton as opposed to Louisville Slugger, for example) have a much greater propensity for repeat purchases. This begs the question, “Why?” Of course the next step would be to start some doing some additional research, like examining competitors. Perhaps the Easton prices are better than competitors’, while the Louisville Slugger prices are slightly above the competition. Through aggressive pricing, Easton customers become loyal repeat customers, while Louisville Slugger purchasers may be lost as they do more comparison shopping in the future. Perhaps that’s not the case, maybe Louisville Slugger bats are just a lot more durable, leading to less purchases over time. Either way, we have a solid basis to start asking the right questions and a starting point for doing some qualitative information gathering from past customers, as well as adding some in-site surveying tools.
Surprisingly, integrating these data points isn’t nearly as difficult as it may seem. Most analytics providers have a method worked out where you can pass along cookie data to your CRM system. As Google Analytics is such a popular option, it’s worth checking out the fine work done by the folks at EpikOne to lay out exactly what needs to be done from a coding standpoint to get the Google cookies integrated into your CRM.
It’s likely that ad budgets are going to lean increasingly toward digital in coming years (particularly paid search and SEO), which provides the opportunity to move first to use data as a competitive advantage, and build this type of infrastructure into your CRM reporting and overall marketing strategy. It makes sense to use every tool in the toolkit, and if you’re doing online marketing, this extra step can provide valuable information for making optimal marketing decisions as your campaign budgets continue to trend toward online initiatives.
