Your websites and online ads are a treasure trove of data that can be mined for new business value. If you’ve never dipped your toe into analytics or data mining, you should make it a point to try!
Today, I’m going to introduce you to a few of my personal techniques for mining a business’ online data for new marketing ideas. I find that the deeper your understanding of your business’ metrics, the more likely that you’ll make decisions based on hard facts instead of speculation. My focus is going to be on your website, but you can apply the same principles to direct mail and offline sales.
Step 1 – Start creating your data streams
Everything starts with creating various streams of metrics that you can look into. My first and best recommendation for an analytics tool is Google Analytics. This amazing tool tracks an incredible variety of user behavior and sales on your website. It’s easy to set up, and very comprehensive. Plus, it gives you a big picture view of your website so that you can better evaluate its performance as a marketing tool.
When you start using Google Analytics, ask yourself:
– Which online channels is my web traffic mostly coming from?
– Which are my top performing web pages?
I also recommend mining your financial/accounting data for information. This is an oft-forgotten set of data that is hiding some good nuggets of insight. When reviewing your financial data, ask yourself:
– Who are my biggest customers?
– What is the lifetime value of my customers?
– What are my top performing products?
– Have any major customers stopped ordering (and can I win them back)?
There are many powerful tools that can audit your website and give you more data to work on. Some are free, some are fee-based. Some are fairly basic, some are more sophisticated than others. When first starting out, the key is to find the right tool that fits your level of experience conducting data analytics. If you’re a rookie, start with the simpler, more basic tools. As you gain more experience and understanding of analytics, you can move to more sophisticated tools.
Paid analytic tools include Moz, Mixpanel, KISSmetrics, Crazy Egg, and Optimizely. If you’re not sure whether you can use a particular tool, get a free trial and familiarize yourself with it. When it comes to web marketing, the value of analytics can’t be overstated. The more data you have access to, the more valuable nuggets you will find that can help improve your marketing and grow your business.
Step 2 – Build familiarity (with your tools and your materials)
This is a step that most people skip. It’s also one I find very valuable. Keep in mind that most of the data you’re going to look at is boring and/or useless. In fact, when you first start analyzing your data streams, you may wonder what value any of it has. But you have to “walk the entire landscape” before you know what’s interesting to look at. As you become more familiar with the tools and the data, you’ll start to pick out the gems that can make a difference in your business.
To really get to know your tools, spend a few hours clicking through EVERY page, menu option, axes in the graphs, and columns in the tables. Once you’ve walked through every nook and cranny of the tool, and given them careful consideration, then you will understand which graphs offer real value and why you need to use them.
Next, don’t make the mistake of getting stuck using only one analytic tool. Instead, take the time to understand the limitations of each analytic tool you use. When novice data analysts gain access to an incredibly comprehensive tool like Google Analytics, they begin to consider it to be omniscient. These novices become close minded, which leads to a mindset of, “If it’s not in Google Analytics, I can’t answer that question.”
Here is an example I witnessed recently. Google Analytics doesn’t track profits on your orders; it only tracks revenue. However, profitability – by product, product line and overall – is one of the most important financial metrics of all. Otherwise, how do you know if you’re actually making money? The sales and revenue numbers might look good. But if the cost of making and selling the product exceeds the amount of revenue it brings in, your business is in trouble.
“Because the profitability of the product segment in this example was so valuable, the business owner took the time to compute the information by hand. He literally wrote down every order number that made it into Google Analytics’ report, computed the profit manually, and generated the new report via Excel. The moral of the story is two-fold. One, Google Analytics doesn’t do everything. Two, just because Google Analytics can’t do something doesn’t mean it isn’t important to your business.
Step 3 – Focus your analysis (know what you’re analyzing)
Once you start analyzing your metrics, you’ll be amazed at how much there is to delve into. To keep from getting overwhelmed with too much data, I recommend starting with three things:
Analyze your web pages. Look at the pages people land on when first coming to your site, then track where they go from there. Gather data on how long (or short) they stay on each page, and how much time they spend on your site altogether. This will give you a good idea of what people are looking for and how they use your site.
Analyze your acquisition channels. Potential customers can come to your site through many channels. These include search (paid and organic), clicking on banner ads, responding to an email campaign, and more. It’s important to know which channels bring in the most site visitors so you can concentrate your resources in those areas.
Analyze your product transactions. Once people come to your site, what are they buying (or not buying)? A certain product page may get a lot of hits. But if people don’t follow through and complete the transaction, that tells you there is something wrong with the product, the price, or the transaction process on your web site.
Most analytics tools provide so many pages, graphs, and charts that it’s easy to get lost. Staying focused on these three areas will keep you tuned in to some of the most important marketing metrics you need to manage.
Step 4 – Try out my favorite metrics (know where to look)
Once tracking the three metrics in step 3 becomes second nature, it’s time to branch out. As you explore other metrics, you’ll start to develop personal favorites that you track on a regular basis. Mine include:
– Sessions (traffic volume)
– Conversion Rate
By focusing on these three metrics, (and a solid understanding of your sales funnel) you can quickly generate a basic understanding of your business. Of course, you have to bring in all the other metrics to tell a more complete story. As you become more experienced, you’ll find more and more insights by considering the other metrics.
Step 5 – Reading between the lines (know what to do)
In and of itself, analyzing a bunch of charts and graphics doesn’t add up to much. It’s what you do with the data that counts.
In the last section, I highlighted a few metrics I recommend focusing on. But what should you do with the information gained from analyzing those metrics?
Here are a few general ideas:
Invest more into your top performers. That is, take your top-selling products and best-performing ads, advertising channels, and web pages and find ways to make them better. Or, create similar variations with other products or services. Perhaps you can replicate your strategy in a way that creates a new revenue stream for your business.
There’s an old adage that says the best way to grow a business is to focus your time and resources on your best employees. The same is true with marketing tools and products. If something’s making money, pour more time, effort and resources into it!
Shore up (or cut!) your worst performers. Remember: not all business ideas are profitable. Try to improve things, but don’t keep pouring money down the drain hoping an unprofitable product will turn around. When it becomes clear that a product is a lost cause, stop selling it.
Keep an eye out for stragglers or outliers that may be the start of a new idea. I often find that as I generate more data, I’ll come across some free radical that sparks a new idea or a new line of questioning. It could be a lone visitor from a website that I hadn’t seen before; this could spark a new line of thought about new web channels. I’ve also investigated web pages that were getting a lot more traffic than they should, only to find traffic sources I had never considered.
Step 6 – Slicing and dicing (segmentation)
The first five sections are good for the basics of data mining. Now we come to segmentation – a deeper level of analytics whereby you cut and reassemble your data to view it from new perspectives and uncover new insights. Segmentation allows you to “zoom in” to specific data subsets and “zoom out” to see the summary view.
Why is market segmentation so important? Because people buy the same product for different reasons, and marketing is most effective when you market to the unique needs of each segment. This requires dividing your larger market into similar and identifiable segments, so you can precisely address their unique buying motivations.
Keep asking questions
I’ll finish with one final thought.
I’ve found that the best way to look for insights is to constantly ask questions about your business. Ask yourself broad questions like, “I wonder how effective my email campaign is doing?”, or “How much money is coming in from being ranked on Google”? And also ask yourself specific questions like, “What pages are performing best on Google rankings?”.
The insights needed to grow your business are out there. But they won’t come up and knock on your door. You will only find them by looking, and you can only do that if you’re asking the right questions.