Optimizing Analytics for Connected Commerce
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1 Optimized Commerce Optimizing Analytics for Connected Commerce An Intelligent Selling whitepaper from MarketLive >>
2 Optimizing Analytics for Connected Commerce MarketLive, Inc. MarketLive incorporates time-proven ecommerce acumen, technologies and services to over 160 retail websites generating over $2 Billion in sales annually. Since 1995, MarketLive, Inc. has focused exclusively on providing ecommerce solutions that successfully sell goods and services online. These technology, service, and professional service solutions form the basis of strong retail businesses. We understand that the intelligent way to sell online is to create a path to purchase on consumer behavior and preferences. Our proven Intelligent Selling methodology guides retailers through marketing and merchandising principles that reflect this approach. With MarketLive, retailers build and maintain sites that deliver a rich shopping experience, form brand loyalty, optimize revenues, and overall business performance. This is MarketLive Intelligent Commerce. For more information about this whitepaper, contact MarketLive, Inc
3 Optimizing Analytics for Connected Commerce By now, the disruption of the traditional path to purchase has been well documented. Thanks to the rise of social media and mobile device usage, consumers can interact with brands via an array of touchpoints in a variety of settings, making a straightforward progression from awareness to purchase obsolete. Nowadays, a shopper might begin her quest for a product on a search engine, conduct research on a brand s ecommerce site, consult customer service help via Twitter combined with , complete the purchase on a mobile device, share feedback in a product review using Facebook Connect, sign up for alerts and then make a second purchase in a bricks-and-mortar outlet after receiving a targeted promotional message. The consumer s experience of a brand is made up of a complex constellation of interactions, as illustrated by industry researcher Forrester s graphic 1 below. This expanded network of customer touchpoints poses many opportunities for growing loyalty and sales. But businesses can t merely set up standalone mobile platforms or ecommerce stores; they must optimize operations to create a cohesive presence that delivers relevant products and offers wherever and however shoppers interact with the brand. The challenge is especially acute when it comes to business analytics. With a persistently precarious economy keeping budgets tight, it s never been more important to be able to measure and quantify the effectiveness of initiatives. At the same time, tracking the behavior of consumers as they move among channels and platforms poses its own challenges. The ecommerce site analytics package is now just the starting point. Merchants must incorporate data from additional sources to create a complete picture of consumer behavior, and view that data through the lens of multiple filters and segments to gain a nuanced view of how shoppers interact with their brand. Web Company Website Mobile Branch/Store Call center Social 1
4 Step 1: Find New Sources of Data To compose a holistic view of consumer behavior, merchants must first gather as much data as possible from wherever shoppers roam and then connect disparate data points to create a complete picture. In addition to standard online performance data such as campaign metrics and Web site analytics, merchants should mine the following online and offline systems: Online and offline customer support. Logging metrics such as the number of incoming requests from various sources, their duration and end result can help capture elusive activities such as purchases that start on the ecommerce site and end with a phone call to customer service. And don t focus solely on telephone customer service; monitor online chat activity, enquiries and physical comment cards from stores to complete the picture. Loyalty cards. If your brand offers a loyalty card for use in stores or a free-shipping club for online shoppers, mine that information and connect it with systems such as marketing programs and social network followers to identify your brand s most avid followers. Catalog activity. Track phone and mailed orders and connect them to online purchasing history and subscriptions to understand whether and how shoppers move back and forth as they consider products online and offline. to be highly experimental, with nearly 60% of merchants agreeing with the statement The returns on social marketing strategies are unclear, while less than a third 31% reported using a specific set of metrics to measure the effectiveness of social networking activities 2. But to prove value over the long term, merchants need to find ways to capture, define and quantify the interactions that take place on social networks and to connect those interactions to increased sales and loyalty. It s high time for merchants to move beyond merely recording the number of likes on Facebook or followers on Twitter and to build a more nuanced understanding of social activity. Analytics guru Avinash Kaushik recommends tracking metrics such as 3 : Conversations comments on posts on Facebook, Google+ or blogs; the number of replies to Twitter tweets. Amplification shares, retweets or linkbacks. Applause Facebook likes, Google+ +1s or Twitter favorite clicks for posts. Of course, simply gathering data from all these sources is only the beginning. In fact, merchants who go no further may find themselves overwhelmed with mountains of information that, when taken in isolation, seems to shed no additional insight on customer behavior. Point-of-sale data. Bricks-and-mortar retailers already use data collected at the register to generate relevant coupons that checkers print and deliver to customers on the spot; now they should extend that concept to generating relevant mobile and offers and targeted catalog copy based on in-store activity. Social networks. Tracking social media performance is a tricky proposition, because for many merchants, the goals of social media are abstract which can translate to unmeasurable. Industry researcher Forrester found that most merchants consider social media 2
5 The crucial next step: Identifying common denominators across data sets, so they can be combined to present a more complete picture of consumer behavior. Establishing those common denominators may require changing business processes to gather new pieces of information, but the connected data such changes yield make the investment worthwhile. Consider these key data markers: Referrers. Tracking the source of incoming traffic to an ecommerce Web site from elsewhere on the Internet is standard fare for Web analytics packages but capturing activity from offline sources to the Web, and from the Web to offline touchpoints such as telephone customer service, can be trickier. Methods to consider: Extend the landing page concept. Designating specific start pages with unique URLs for Web traffic coming from a radio advertisement or Facebook page is a widespread practice; merchants should use that methodology for tracking offline interactions as well. For example how about using a different toll-free telephone number for customer support calls coming from the Web site as opposed to print catalog customers? Or giving social followers a unique coupon code for use at an instore event? Use QR codes and track closely. QR codes consumers can scan using their mobile devices to access online content help track movement from offline to online, such as from an in-store display to a mobile Web landing page. The more specifically a QR code is attached to a particular location or call to action, the more useful the data; a code that links shoppers to further information about a featured store product is helpful, but one that links shoppers from a specific branch to that information is better. Make requesting an address part of the standard customer support script. Add an address field to signup forms for loyalty programs. Phone number. As with the address, a phone number can help tie together disparate pieces of a customer s record, including mobile promotion signups and customer support interactions. Requesting a phone number via other touchpoints, such as during the online purchase process and when signing up for loyalty programs, will yield further data. Not all consumers will share their address, and some may juggle several different addresses between work and home, which may complicate the data. But with every touchpoint that collects a phone number or address, merchants are likely to gain a substantial amount of data that can, in fact, be interconnected. To allay privacy concerns for shoppers, always disclose be up-front about requests for additional information, and present them with a compelling rationale, stressing the ability to deliver more relevant products and offers to them if they share as Amazon does on its splash page requesting permission to access a user s Facebook profile information. address. Even without adding new information collection points, merchants can use individual addresses to connect social media profile information, subscriptions and online purchase history. Additionally, merchants should: Train point of sale staff to ask for an address. 3
6 Step 2: Redefine Conversion and Costs With data from an expanded range of sources in hand, the next step to optimizing analytics is to rethink one of the most commonly-tracked performance indicators: the conversion rate. The conversion rate gauges what percentage of individual visits result in purchases, thereby giving merchants a snapshot of the effectiveness of their site at least when it comes to the traditional path to purchase as traveled in the course of a single visit. But with shoppers now taking diverse routes toward purchasing over varying time periods, the very idea of conversion has changed and merchants should expand their notion of a successful interaction. After all, a video download could be the first brand touchpoint for a consumer who goes on to become a loyal customer starting a month later. So rather than focusing solely on sales resulting from single visits, consider tracking and quantifying the value of the following ecommerce site goals and/or mobile messaging signups. When ecommerce site visitors subscribe to updates, they re demonstrating a substantial commitment to the brand. After all, they re inviting the merchant s messaging into their already-crowded or mobile messaging inboxes. Assign a value to each signup based on the typical conversion rate and average order size for campaigns. Usage of cross-channel content. Flag ecommerce site content that refers to other brand touchpoints and monitor activity, including the paths visitors take to and from those pages. For example, when visitors view information such as the store locator, customer service directory or a promotional page about the brand s mobile presence, it s an indicator that they may soon visit a bricks-and-mortar location, telephone customer support or download an app, respectively. Use your analytics package to determine the amount of revenue visits to those pages eventually contribute and from there assign that content a value. Customer reviews. Engaged buyers who contribute reviews represent potential brand advocates whose word of mouth recommendations can attract new business. And tracking which products attract reviews can reveal whether marketing campaigns are effectively drawing attention and interactions. As with the crosschannel content pages, use eventual contribution to revenue to determine the value of reviews or, in the case of individual reviewers, use markers such as an address to connect review activity to past purchases. Just as merchants can assign a positive value in their analytics ledgers to each of the above goals, there are also intangible costs merchants can attempt to quantify. In particular, assign dollar values to: Social media investments. Facebook pages and Twitter accounts are free, so it s easy for merchants to undervalue the resources devoted to these brand outposts. Merchants should factor in the costs of staffing directly related to posting and responding to comments, as well as the number of customer service calls or s that originated on social media, to gauge the cost of maintaining a social media presence. That figure can be used to derive the cost per acquisition giving merchants a means for measuring social media effectiveness against other forms of inbound marketing. Mobile optimization. While the initial development of an app or a mobile Web site comes with a cost attached, the ongoing need to tailor content and functionality for mobile consumption can be a cost whose price tag is more elusive. As with social media, merchants should track staffing investments carefully to assign ongoing costs to mobile initiatives. 4
7 Armed with data from a variety of consumer touchpoints, and with an expanded range of shopping goals identified and assigned, merchants can take their analytics to still another level by segmenting the data to reveal precise behaviors. Many merchants already use segmentation to view their ecommerce site analytics data by acquisition channel for example, calculating the conversion rate and revenues attributed to paid or natural search, or tracking how many subscribers who click on a message link go on to convert. The following segmentation filters may be less familiar, but have the potential to shed new light on how shoppers use the site and other touchpoints: Device. Segmenting data according to the device used to view site content sheds light on mobile and tablet usage and can help bolster investment in the platform. Mobile traffic to retailer Beauty Brands ecommerce site represented a small percentage of total site traffic, a finding that would seem to indicate mobile investment was a low priority. But a deeper dive into the data showed that the average order value for mobile devices was comparable to orders placed via a fixed Web browser suggesting that mobile users were a potentially lucrative market for the brand to tap. Furthermore, the data revealed that mobile users were searching heavily for store locations, suggesting that an optimized mobile site could benefit offline sales 4. Step 3: Experiment with New Segments Visit number. Because shoppers now take such an indirect route to purchase, it can be instructive to view performance data through the filter of visit number. Merchants may discover that the majority of purchases occur after the first visit suggesting that adopting a longer-term calculus for key metrics is in order. Luxury department store Nordstrom discovered that while its conversion rate for top customers was 5%, extending the timeframe to a month yielded a conversion rate of nearly 100% when taking both in-store and online orders for those customers into account 5. Of course, these segments become even more powerful when combined with still others. For example, merchants can determine: Which devices drive the highest conversion among big spenders, by viewing data by device and average order value. How many visits it takes for a social media referral to result in a sale, by layering referrer information and visit number over purchase data. By layering segments, merchants gain an ever more precise picture of consumer behavior and can adjust their strategies accordingly. 5
8 Conclusion Optimizing analytics to capture behavior across customer touchpoints can seem like a daunting task. But by expanding the range of data available for analysis, defining goals beyond single-session sales, and segmenting the numbers extensively, merchants can assemble a nuanced picture of how consumers interact with their brands. 1. Forrester Research, Welcome to the Era of Agile Commerce, March Forrester Research, Will Facebook Ever Drive ecommerce?, April Avinash Kaushik, Occam s Razor post entitled Best Social Media Metrics, October Alight Analytics case study for Beauty Brands 5. Kevin Hillstrom, guest post on Web Analytics Demystified blog, July
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10 For more information: HEADQUARTERS: MarketLive, Inc. 617 B 2nd Street Petaluma, California Main: info@marketlive.com
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