After my last post, I was thinking some more about the power of event-based analytics, as opposed to "path based" analytics. In the previous post I wrote about the value of event-driven measurement being in the ability to correlate events (things people do, like "look at a product, or apply for a product") with other events. It's all true, but I left out something even more important: event reporting opens the door to pulling your web analytics data into customer or business intelligence systems, giving you the power of true "customer behavior" analysis, not just "web site visitor behavior" analysis. Pretty powerful stuff.
Tuesday, April 11, 2006
Many of the banks I've worked with come to web analytics with the assumption that the value of web analytics is in tracking visit paths all over their site. While pathing is a powerful tool in the right circumstances, it isn't the most powerful thing web analytics can do for you as a bank. Instead of thinking about "seeing how people move around", which is what path analysis reports give you, think a little bit more abstractly...think about understanding what "things people do".
- Respond to a campaign I'm running? Which one?
- View financial tools and calculators?
- Read detailed product information? Which product(s)?
- Log in to Online Banking?
- Begin a product application?
- Make on online payment?
- Ask to be contacted?
- Complete a product application? Which product?
- Close on an approved application?
- Respond to a cross-sell offer?
- Save an application to complete later?
- Come back and complete a saved application?
You could certainly ascertain if your visitors did these things and more by relying on path analysis, but gaining any level of aggregate understanding of visitor behavior would be practically impossible. The level of sheer 'noise' in the data would be astounding, and actionability near zero.
If, instead, you focus on collecting data about the things people do as they do them (events), you'll find that you've armed yourself with a stream of customer data that is extremely powerful and highly actionable. The power of tracking events lies in the fact that events can be correlated with other events to answer questions like:
- Which campaigns drove the most application submits?
- Which products are benefiting most from my campaign efforts? Which campaign efforts?
- Which products had the most successful cross-sells?
- Do financial tools and calculators have a measurable impact on a visitors propensity to complete an application?
- Which products sell best with existing customers?
- Which prospect segments need a little extra catering to in order to make a sale?
- Who are my most valuable customers, and how can I target them for additional sales?
These are the kinds of questions you need to be able to answer with web analytics, and they're not questions that can be answered easily if you focus on "where people go" (path analysis) instead of "what people do" (events). If this isn't what you're focused on, you're missing the boat.
Of course, I'm not suggesting that path analysis reports don't have their place. They are a key tool for understanding visitor movement in the context of analyzing and optimizing site design, content placement, and navigation design. But, in order to know where to focus your investigations with path analysis and other similar tools, you must have a solid event-driven measurement strategy that can answer aggregate visitor behavior questions.
Thursday, April 06, 2006
Shane Atchison of ZAAZ proposed a new way of thinking about conversion today, called the "hub-and-spoke model." He describes it this way:
The hub-and-spoke model places the product page at the hub, with multiple inbound spokes to products and outbound spokes to desired conversion paths and points. When you shift to this model, you get a more sophisticated view of your customers' interaction with your online business.
I think this is an interesting concept, but it is valuable as an additional view of visit or visitor conversion behavior, instead of as replacement to a funnel view. The funnel concept is still valuable in that it recognizes that there is a flow to the decision making process that consumers go through, and that your site needs to push people through that flow, whether it's literally a linear flow or not. If you think of the funnel as visitor based, not visit based, and you think of the funnel steps not as pages on the site, but qualification levels of the visitor (or how close they are to making a decision), you see that it is an extremely valuable visualization.
For example, your qualification levels might be:
- Visitor (just the state of being a visitor - this isn't tied to a specific page of the site)
- Browser (visitors who get to the category level or product level of the site -- or visitors who exhibit some other behavior indicative of a higher degree of engagement)
- Shopper (visitors who add something to the cart, or who begin an application process)
- Buyer (visitors who finally make a purchase, or who complete an application)
- Repeat Buyer (buyers who buy again)
Although this looks linear, it isn't entirely linear in nature, as some consumers may enter the "qualification" funnel much more qualified (further down in the funnel) than others. There is no need to assume that a visitor must progress through each level, starting with the top. A visitor may become both a visitor and browser with just one page view, depending on where they land in the site.
And this is where the hub-and-spoke model that Shane proposes would seem to provide additional insight -- where do visitors enter the site, and how do they interact with the tools, features, and content that exist ultimately to drive purchase conversion (this is where revenue comes from, after all).
At the end of the day, each visualization is answering different questions and enabling a different kind of decision making. The visitor funnel answers macro-level questions about the level of engagement of prospects, and efficiency of the site at pushing prospects toward making a purchase decision. The hub-and-spoke answers micro-level questions about exactly how prospects arrive at the hub-level and move away from it. Together, the two views give marketing and site strategists the data needed to understand both raw visitor behavior, and the impact of visitor behavior on the conversion (and, by extension, revenue) performance of the site.
One note for banks and other financial services companies: Buyers in the example funnel above should be analogous to the revenue generating event you want your prospects to accomplish, or the closest thing to it on your site. For banks with online application processes that do not provide an approval decision online, "Appliers" is a good final step. For those that do provide an approval online, "Closers" would be a more appropriate final step of the funnel, and it should represent not only those that are approved, but those who actually accept the product and close the deal. Appliers, then, would be a good second-to-last step in the funnel, and this would give you insight into not only the efficiency with which your site encourages people to apply, but the quality of those people who do apply. It won't do you any good drive more people to apply if they're not credit-worthy.
I've been pretty head's down at work for the last 6 months, and haven't had time to write. Things are a bit more sane now, and I'm hoping to take some time at least once per week to write here. I'll still be focused primarily on financial services, but may occasionally stray to a broader set of topics within analytics.
Don't hesitate to send me your questions or comments.