Banking as Retail

Recently, while working the audience at an online retail event where the company I work for was presenting, I came across an individual who was actually in the financial services space. After brief introductions, he spent the next 5 minutes telling me about how he had virtually no professional resources available to help him do his job better the way online retailers do. So, he decided to come to an online retail event and see what he could glean.

I was ecstatic that he was there because, in fact, the sales side of Financial Services IS retail! Retail banks and consumer products retailers face many of the same challenges online, and retail banks can learn much from looking at the successes (and failures!) of their compatriots in the products space. To be successful, retail banks will have to start thinking of themselves, at least partly, as retailers. And from my experience, most retail banks are along ways away from this.

One of the best ways to start learning from products retailers is to look at the web analytics reporting that successful retailers have armed themselves with. Many of these powerful reports are applicable directly to retail banks and other financial services outfits. Some that immediately come to mind are:

• Products reporting with revenue (yes, you can do this even if you don't transact money online!)
• Products attributed to campaigns (which campaigns yield the most applications? the most revenue? the most valuable traffic?)
• Cross sell reporting (how effective are you at getting applicants to add products to the "sale"?)
• Product affinity reporting (what products are likely to be purchased by the same customer?)
• Segmented conversion reporting (what types of visitors to your site are most likely to apply for specific types of products? to apply for multiple products over time?)
• Campaigns reporting (onsite and offsite; which are successful, which should be scrapped)

The above list focuses on the public side of retail bank websites - the truly retail side. Of course, there is also the authenticated side, which is part self-service and part retail. In many cases, it makes sense to incorporate transactions and product sales from the authenticated side into the products reporting described above.

Also, you may have noticed that I left out "scenario analysis" reports from the list above. It's not that I don't think they're important -- they are crucial -- but I've left them out because scenario analysis reports are best used as part of a program of application conversion improvement (i.e. figuring out why applicants drop out of the process and fixing the problems causing them to drop out). They're not well suited to provide overall products reporting, though many banks continue to focus their reporting efforts on scenario analysis. In doing so, they're missing the huge opportunities that become apparent when the right reports provide the right insight.

Over the next few posts, I'll be focusing on how each of the above types of reports can help retail banks be successful online. I'd like to hear about your experiences with web analytics, too, from either a retail or financial services perspective.

Defining KPI's - Update

I thought a little bit more about how I described the process for defining KPIs - and I came to this realization...

While it is true that you have to know what your business objectives are in order to tie your web measurements into group-, division-, or company-wide goals, often times it's easier to start at number 3, Describe desired visitor behaviors, and work your way up (toward connection to management objectives), and down (toward KPIs and contextual data) from there. The end result is still the same - the ability to illustrate to management how what's happening on the web site is directly connected to the larger goals that management cares about.

Here's what that looks like applied to the top down approach described by Schiff in his post on KPIs.

Optimization Tip - The order of states in an address form

Checkout Jared Spool's post on this topic in his Brain Sparks blog. This is the type of minute detail that you have to focus on when you're optimizing business performance on your web site. This is especially relevant to retail (billing and shipping addresses) and retail banking and financial services (account applications).

If you want to achieve the greatest possible return from your investment in doing business online, leave no stone unturned when it comes to performance optimization. Seemingly small changes can add up to millions of incremental dollars annually. I know. I've seen it happen.

Measuring the Right Things [part 2] - Defining your KPIs

I've been thinking about this post for a few days now, trying to figure out just the right way to approach it. What's got me thinking about it is that I'm getting ready to engage with a new client to help them define a Key Performance Indicator framework they can use to enforce a more disciplined approach to site management within the organization. Additionally, they want a framework with which they can document the business value of the site to executive management.

Conceptually, defining KPIs is extremely simple...

1) Understand your Root Goal or Overarching Business Objective
2) Document the efforts you'll undertake or approaches you'll use to try to achieve those goals
3) Document the desired visitor behavior to result from your efforts
4) Express the ratio or data-point that lends insight into the scrutinized visitor behavior (this is a KPI)
5) State the individual measures that create the ratio or provided needed context to understand the KPI

What end up on your scorecard or dashboard is nos. 4 and 5. Numbers 1 through 3 you use to provide the overall business context when you write up your analysis of overall website performance for management.

Where most client-side analysts or site managers tend to fall down when deciding what to measure is failing to explicitly state and understand the Root Goal that 'efforts' and 'behaviors' are derivative of. Most of the time when I ask a client what their goals are they tell me about desired behaviors or eff0rts to affect behaviors, but they don't talk about the high-order objectives -- the Root Goal. As is true with any business, you need to understand your goals before you can understand your performance, or even what you need to measure to understand performance.

Here's an example of a fully defined KPI for a retail banking site:

1) Root Goal: Grow new account revenue 20%
2) Effort (or Approach or Method): Improve attach rate (cross sell performance)
3) Desired Visitor Behavior: Complete application with accessory products
4) KPI: % applications with accessory products
5) Contextual Data: # of applications, # of applications with accessories, AVG Revenue/Application (without attached accessory), AVG Revenue/Application (with attached accessory)

A colleague forwarded me this post from Craig Schiff while I was working on this post. In it, Craig does two things nicely (aside from being a smart guy): he provides a nice graphic illustrating the top-down definition of KPIs; and he clearly demonstrated to me how web analytics is just a little slice of BPM (Business Performance Management). We're working on exactly the same challenges, just on a different scale. The wording in his process is slightly different from mine, but they both get you to the same place.

Here's Craig's illustration:


One other note about Schiff's process -- I liked step 5 so much I included it in mine. I had not explicitly called out the needed contextual data separately. Instead, I was just including the contextual data as part of Step 4. It's much clearer when you call those out separately.

Blog ROI

Heidi Cohen on measuring blog ROI

Haven't had a lot of requests from clients to measure the impact of blogs, but it sure seems like a good idea. You can easily build a hard-dollar case for the value of a blog by treating it as another piece of online media. Include your blog (or blogs) in your campaign reports and correlate conversion metrics, such as product views, purchases and revenue to customer behavior on your blog.

Don't sell stuff? Correlate any conversion, like lead capture, and assign a dollar value to each conversion event. You don't need to sell online to understand the revenue impact of conversion and the media driving conversion.

Measuring the right things. [part 1]

The thing I get asked to do the most, and the thing the most people seem to have trouble with, is identifying the right things to measure. It's not surprising that clients have so much trouble - the possibilities are crazy. You can measure anything (well, anything that's measurable).

It's actually an age old marketing problem - if you provide too many choices, the customer gets option paralysis. They can't make up their mind. In the classic marketing sense, option paralysis leads to a slowed or lost sale (I can't pick which one I want - it's too difficult). In the case of web analytics, it leads to data bloat (I want everything, just in case I might need it). Problem is, there tends to be an inverse relationship between the amount of data available and value derived. While it's true that we consumers want choices, we don't function very well if we have too many of them.

So in these cases, it's my job to help clients identify the right data - the key data points they should surface to understand, at a strategic level, the business performance of their web site. You may have heard of these data points...they're your Key Performance Indicators (KPI's). Of course, you need more than KPI's to manage a site. But the right KPI's will make using the rest of your data easy. They're like a road map in an unfamiliar city. Without them, you're completely lost.

Actually, come to think of it, they're more like the Neverlost GPS you get in your Hertz car. Well thought out KPI's actually tell you where to go.

Now, in my mind, KPI has become over used and under utilized. Lots of people talk about tracking KPI's, but very few people are tracking what I would call truly key performance indicators. Further, we run the same risks with KPIs as we do with data in general. Too many, or poorly organized, KPI's become just more data.

Stay tuned. In another post I'll talk about how I help my clients arrive at the right KPI's for their business.

What are we?

What are we... Web Analysts? Customer Behavior Analysts? Site Optimizers? Design Analysts? Web Analytics Gurus? [fill in the blank] Experts? Online Business Analysts? If you take into account where we come from, how we got to be Web Analysts (or whatever), you could add Usability Engineers, Interaction Designers, Information Architects, User Experience Analysts & Designers, Interface Designers, and Direct Marketers to the list. We're quite a varied bunch.

I'm not sure what the best title for us is, and I'm not sure we know enough about what we do and where we're going to have the right title just yet. I suspect there may be some specialization in the field required before the titles start to settle in. I'd be interested to hear your thoughts on how the field will specialize (or is specializing already).

Whatever you call us or what we do, it appears that, according to Jason Burby, we have very satisfying jobs. I would have to concur.