By 2005, online sales are expected to become nearly one-third of a cataloger’s business, according to The Direct Marketing Association. To track the success of your online efforts, you need a way to measure the effectiveness of your Web site — and your efforts to get people to visit it.
What’s more, your measurements should go beyond the typical Web-server log-file analyzers that offer only performance- and site-driven data such as the ambiguous number of hits, page views, user sessions and unique visitors.
Today, more powerful tools are available to measure campaign success, customer experience, e-commerce activity and overall return on investment (ROI).
“Online businesses have tremendous advantages over their offline counterparts,” says Steve O’Brien, vice president of marketing at Los Altos, CA-based Fireclick (www.fireclick.com), a provider of analytics solutions for catalogers such as Lillian Vernon, J.C. Penney and Victoria’s Secret. “Aside from the cost benefits of running a business or division with fewer physical assets and employees, online businesses have an added advantage in the information they can gather regarding the behavior of customers, prospective customers and lost customers.”
Two Routes to Take
Two types of technology are available to help you get robust metrics:
1. Software solutions. Some software can be obtained for free, or at the least there’s no charge to try it for 30 days. But no matter which software you employ, you’ll incur expenses for personnel to run the programs, hardware to run the application, and subsequent software renewal licenses and/or upgrade costs.
There are many available software solutions to select from, including the WebTrends suite of products from San Jose, CA-based NetIQ (www.netiqu.com). WebTrends offers a complete view of Web customer activity, so you can measure and hopefully improve your e-business performance. Available both as a software and an application service provider solution, NetIQ touts Staples and Office Depot as members of Web Trends’ diversified roster of catalog customers.
“The biggest trend we see is in the increased accountability on businesses to show tangible ROI,” says John Simpson, WebTrends’ product marketing manager. “For businesses with an online component, this means Web analytics are becoming more and more important to marketers as tools they use every day in making decisions.”
2. ASPs. Application service providers host companies’ proprietary software applications on their computers. Working through an ASP, catalogers typically view reports online using a standard Web browser and password privileges.
Sometimes you’ll encounter hurdles when you want to take data from an ASP and apply them to existing customer relationship management solutions, so be sure to ask potential vendors if this scenario may affect your operation.
ASP solutions such as Fireclick’s NetFlame offer metrics that range from simple measurements of site traffic, to more robust reports that detail conversion rates, revenue by different product categories and sub-categories, and conversion and shopping-cart-abandonment rates.
Today’s trends veer toward using ASPs to track metrics. “The market is clearly moving from the software model to the ASP model for many good reasons,” says Fireclick’s O’Brien. “Traditional software packages are run against log files from Web servers to produce reports and data. This means someone at the catalog company must assemble these files, sanitize them, run the software and distribute the reports.”
Cataloger Lillian Vernon used Fireclick to help determine which of its Web site’s customers are new, which are previous buyers and how much they order, notes David Hochberg, vice president of public relations at the catalog company.
Lillian Vernon’s extensive customer opt-in e-mail service, affiliate programs and online portal relationships with sites such as MSN have helped entice a new demographic uncovered by metrics provided by Fireclick.
“What’s been exciting for us is that we’ve discovered that Lillian Vernon.com has attracted more men and a younger demographic to our company,” says Hochberg. “These types of people tend not to turn to our [print] catalog.”
What to Measure
Not only is the Web a measurable medium, but its data usually can be analyzed within minutes after being recorded. You’ll want to focus on key metrics that match your objectives and analyze your site visitors’ behaviors.
A cataloger that e-mails customers who’ve purchased within the past 30 days will want to first measure the clickthrough rate from that e-mail campaign. (Clickthroughs occur when customers click on text or an image that takes them to your Web site.) But while clickthrough information is a good start, it tells you only the percentage of people who went to the site. Consider analyzing clickstream data, which reveals where customers went during their sessions on your Web site and if the visit turned into a purchase.
Whichever metric tool you choose, at least you should be able to learn the number of orders that were generated and how much revenue was brought in from each marketing campaign, based primarily on clickstream data.
Aggregate statistics that show you the products on your site that were viewed the most, were added to the most shopping carts, were removed from the most shopping carts and were abandoned in carts can help you, for example, determine what items may be attracting attention but not generating revenue, says O’Brien.
Another key online metric is the ratio of visitors to buyers (V2B), says Randy Woods, president of Ontario, Canada-based Buystream (www.buystream.com), a company that offers analytic and e-business consulting services and software solutions. Various factors can impact a V2B ratio, says Woods, including a visitor’s purchase history, level of technological sophistication and shopping duration.
Other metrics you can analyze include order frequency, customer satisfaction and cross-channel effectiveness (that is, to what extent your Web site drives catalog purchases and vice versa).
WebTrends’ Simpson says, “Web analysis becomes more valuable to marketers when they focus on the insight that is actionable, when the analysis enables them to see important trends and isolate areas of their sites to improve customers’ experiences.”
Whichever way you go, the goal of metric measurement is the same: to improve the effectiveness of your online business.
Rob Yoegel is a freelance writer and vice president of online services at North American Publishing Co., publisher of Catalog Success. He can be reached at ryoegel@napco.com.