Have you ever allowed the color of the stoplights to decide the direction of your day? I have, and it led me to a street corner at the intersection of bad and worse in San Francisco.
It's the same with analytics: Analytics can serve as a very useful directional tool or map, but if you don't know where you're trying to go with your online assets, or what you're trying to accomplish, you, too, could reach unfavorable results. In fact, you probably will.
Marketers always want to better understand the data coming from their web analytics tools. Yet too often they don't go through the fundamental process necessary to set up a proper analytics strategy. Marketers are buried in data, but how do you know what the data is really saying above all the noise? And how do you make sure the decisions you're making are the right ones?
Here's an outline of the rudimentary process necessary to best understand what you're being told by your analytics, and how to act upon it:
- Define your business objectives.
- Integrate data for a holistic perspective.
- Provide context and humanize your data.
- Act fast.
Define your business objectives
This is the first and most important step in the process of measuring your online goals and objectives. When it comes to hearing what your data is really saying, this step is akin to writing the questions you want to ask your data.
By defining your business objectives, I don't mean defining your key performance indicators (KPIs) or which metrics are going to be measured (that step comes later). Marketers need to understand what they're trying to accomplish with each new marketing program. At the end of the day, there are only three major objectives that marketers are trying to accomplish:
- Increase sales
- Decrease costs
- Improve customer satisfaction
After defining objectives, the next level down is defining goals, or the steps you need to achieve to realize your objectives. Starting with these definitions puts you in a better place to engage your data in a "conversation." It allows you to ask your data questions and get answers in return.
Now it's time to define key performance indicators (KPIs) and how they map back to the goals. Additionally, once KPIs are defined, it's important to determine which data are necessary to measure the effectiveness of the marketing program as it relates to business objectives, and ensure ahead of time that the proper web analytics tools are in place.
At the completion of a program, marketers want to understand synergy from integrated tactics to reach the overarching goals. By knowing what questions you want to ask the data ahead of time, you can make sure you're taking the right measurements to answer them. Without this collaborative effort in the beginning of a program to ensure a proper analytics strategy has been defined, you are likely to have clients asking questions that can't be answered, resulting in disappointment.
(For more information and context around the differences of KPIs and metrics, Avinash Kaushnik goes into great detail in his blog post called "Web Analytics 101: Definitions: Goals, Metrics, KPIs, Dimensions, Targets.")
Before any online initiative launches, always consult with your web analyst to ensure an analytics tracking strategy is in place to measure performance and marketing effectiveness. The days of slapping analytics code on a website are over. All analytics platforms, even Google's free tool, have become increasingly sophisticated with tracking capabilities. Regardless of the tool you're using, a thoughtful approach must be taken when implementing your analytics. And the best resource for interpreting your data requirements is a skilled and experienced web analyst.
Integrate data for a holistic perspective
Marketers are becoming more advanced in their efforts as they begin to better integrate their initiatives across multiple platforms and tactics. However, when it's time to evaluate the performance from such efforts, individual reports are developed for each tactic executed for the program. From a media perspective, the program might have appeared to perform exceptionally well, driving much traffic to the website at a low cost per click. But one must not stop there to determine the success of a campaign's performance.
Since we started by setting up objectives and goals and establishing an infrastructure that lets us measure against those objectives, the next step is combining the necessary data to see what those users are really doing. Traffic might have increased, but it is even more important to understand how these users converted.
In order to make informed decisions about your campaign, it's important that you understand the information obtained from a campaign, dive deep into the data, and ask the right questions, such as:
- Traffic is up, but is that traffic valuable?
- What can be done to obtain these users sooner, or can retargeting efforts be used to close the gap between a lead and sale?
- Do you find that the audience is interested and engaged, yet not converting?
- What is it about your program that interests them?
- Did your marketing efforts target the wrong audience?
Web analytics tools provide a wealth of data. But often, more information is needed to effectively answer these types of questions in relation to overarching business objectives. It's important to know your users' intentions and interests, so incorporate survey tools. For brands with retail locations, make sure you incorporate offline and in-store data. Retargeting tools also provide new insights into customer behavior and abandonment. When you want a holistic view of your marketing efforts, you have to pull in all data that comes into play. Evaluating analytics in a silo is just as dangerous as not using your data at all. Data integration is key.
To truly understand what your analytics are really saying, you have to hear the whole conversation. Analytics experts understand what external metrics need to be considered and how to compile reports that tell the whole story of what's happening.
Provide context and humanize your data
As there are so many numbers available to marketers, your dashboard can seem overwhelming. But in order to hear what your data is really saying over the "noise," you have to start by putting the information into context. Even if you're asking the right questions, you can derive an incorrect conclusion from data that is taken out of context.
Sometimes an increase or decrease in certain metrics is not necessarily good or bad. There are other factors that could influence metrics such as bounce rates or conversion rates. For example, decreased leads can often be interpreted as negative, but what if the value of the leads that did convert far exceeds previous leads and a higher percentage are closing deals at a higher average order value? Context is what allows you to "hear" this story from the data. Context tells you that even though your leads have decreased, you are still achieving your main objective of increasing sales.
Another way of providing context is by humanizing the data you are evaluating. (In fact, this method is so important that I wrote about it in a previous article, "Web analytics for marketers who hate numbers.") But I continue to witness clients who are stuck on the numbers as opposed to what the numbers mean, so I will highlight it again. Marketers need to start seeing the data in terms of real people and the way they engage with your brand.
The raw numbers -- visitors, conversion rates, online purchases, online leads, the number of Twitter followers, or the number of Twitter retweets -- only provide so much information. A considerable amount of what your data is telling you is missed when taken out of context. For example, if you are a retailer with both e-commerce and retail locations, you might have a decrease in conversion rates. But what about the visitors using the "store locator" section of your site? It can be assumed that they converted in-store, so the website served its purpose and helped a customer achieve his or her online goal.
A considerable amount of analysis is accomplished by asking questions based on your business goals, then interpreting the data by providing context around your customer's actions. Context is what allows you to take raw numbers and convert them into a deep understanding of the value of your marketing efforts.
Now that you can better listen to your data, it must be mentioned that the most important part of analytics is acting on your data. Any analytics dashboard provides marketers with mountains of data to make informed decisions, but even with all this information at their fingertips, they are hesitant to act. It is important that marketers act fast, adapting a potentially ineffective campaign into a great success as soon as the numbers are available. There's nothing as ineffective as sitting on data instead of taking immediate action.
But if your information isn't presented with context, it's easy to be reluctant to trust the numbers. Marketers often come either from a business background or an analytics background. But in order to feel assured that you are making the right decision, you need to have someone who understands the numbers and how they relate to your overarching business goals. That is why, in order to make changes to a campaign swiftly and with confidence, you must always define your objectives, integrate your data, and provide context.
As a decision maker, you should trust recommendations from an analytics expert who understands your business goals and knows how to interpret the data so it can drive key business decisions. This type of skill is not easy to find; it requires someone who understands the meaning and collection method for the data -- someone who is capable of defining an appropriate measurement strategy and has the ability to interpret the data in a meaningful way to drive business and marketing decisions.
Once you have the proper infrastructure in place, with the right tools and resources making the right measurements, and once you understand your data in context, it becomes easy to act with confidence and to do so quickly. Timely action can be the difference between unnecessarily losing money and resources on a failing campaign and making minor adjustments that turn that campaign into a successful one.
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