Articles in the Benchmarking & Measuring Success Category

May 22 2008

Figuring Out Your Ecommerce Sales Cycle

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Today’s post is all about something that every single business man or woman should already know – their sales cycle. As soon as you read “sales cycle”, a number, an amount, or some percentage should have immediately popped up in your head, that corresponds to the amount of time it takes your customers to buy things from you.

It’s imperative that you know what your sales cycle is! You need to know this so that you can:

  • Gain a further level of insight with your customers / shoppers
  • Understand what makes your customers “tick”
  • Learn what it is about your products / landing pages / messaging that encourages your customers make that impulse or that “on-the-spot” purchase
  • Discover what the best ways are for you to market to your audience
  • Find out (through testing) what works, what doesn’t, and what you need to do

That sounds like a list of bullet points for a seminar or a conference presentation, but knowing your sales cycle – and how you can shake things up – helps answer a lot of questions that you may not have known the answers to.

But let’s say that you don’t really know what your sales cycle is. That’s OK – your secret is safe with me. Besides, your sales cycle is always changing, isn’t it? You’re testing different marketing messages, different shipping offers, and different “Add to Cart” buttons, and all of these things affect your Visitor Loyalty, and when Visitors purchase stuff, don’t they? Of course they do!

Google Analytics, being the rock star that it is, has thrown in a few Visitor Loyalty reports within its interface that can help you keep track of how long and after how many visits people are buying things from your online store. If you have my favorite Web Analytics program (and if you don’t, why not?), log-in and visit your Ecommerce reports section. At the bottom of the list of reports you will find links to a “Visits to Purchase” report and a “Days to Purchase” report.

These two reports are great, especially when compared to a previous date-range. You can use this report in conjunction with other marketing or Ecommerce reports, and really get a much deeper understanding of how your online business is doing.

A couple of notes: Generally speaking, the lower the cost of your items, the faster your sales cycle. People will usually buy sneakers / hats / ipods after one or two visits. Things like flights, cruises, resort packages, and to an extent, membership applications, will have a much slower sales and ecommerce cycle than your material goods counterparts. Most people will do a lot of research and comparison shopping first, before they pull the trigger on a flight to Japan from the United States, so that they can get the best deal possible. This sometimes takes a few more visits and days than buying a t-shirt or a new CD (Do people even buy CD’s anymore? :)).

April 18 2008

Using the Google Analytics Dashboard

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The Google Analytics Dashboard is the first page that you see when you log-in to your Google Analytics account (well technically it’s the second page, as the first page lists all of your profiles). The Dashboard is the “homepage” of your Google Analytics account, and there’s quite a bit that you can do with it.

The Date Range Tool:

Starting from the top of the page, the first thing that you can control is the Date-Range Tool (or as a Google Engineer told me, the Date-Range “Slider”). That date that you see on your dashboard is the default setting for all Google Analytics profiles – the last 30 days. Clicking on the Date-Range Tool activates the menu:

Google Analytics Date-Range Tool / Slider

From here, you can do a few different things. You can click on any individual day in the calendar, to be able to view data for just that single day; you can click on any one of those “half-circle” tabs next to each week to view data for each individual week; or, you can click on the name of any month to view data for that entire month’s time. To choose a specific date-range, click on the first day of your desired date-range, and then click on the last day of your desired date-range. When you’re finished, you can click on the top-right corner of the date-range tool (either on the date itself or the arrow pointing down) to close the menu.

You can also compare any date to a previous date range that is equal in length to what you have selected. First, select your desired date-range. Then, from the drop-down menu under where it says “Comparison”, choose “Date Range”, and you will see the previous date-range become highlighted in bright green. Click on the “Apply” button directly underneath the drop-down menu to enable the date range comparison. Look at what happens to the items on your dashboard:

Google Analytics Dashboard with Date-Range Comparison

How fancy! Now, every element of your dashboard, and every element of every other report in Google Analytics, will have this Date-Range comparison enabled. To disable it, simply click into the Date-Range Tool, change from “Date Range” to “Site” in the Comparison drop-down menu, and click on the “Apply” button. You should be back to a single date-range view.

Finally, you can click on the “Timeline” tab within the Date-Range Tool menu to see a trending graph view of the calendar function. You can drag the window back and forth, and you can contract or expand the window by click-and-dragging one of the two silver buttons on either side of the window. It’s a fancier version of the standard calendar view – I’m a boring guy, so I prefer the regular calendar table :).

Export / Email Options:

Your dashboard can be exported to a PDF or an XML file format. All you have to do is click on the “Export” button, which is located towards the top-left of your Dashboard. Once you click on the “Export” button, a sub-menu appears with your two options (Note: for every other report in Google Analytics, you can export in a PDF, XML, CSV, or a TSV file format).

Clicking on the “Email” Button will send you to the Email Management screen, where you can send the report to yourself and other email addresses; enter in a custom Subject and Description Line; and choose the file format which you would like to receive your Dashboard. Or, you can click on the “Schedule” Tab, and have your Dashboard automatically emailed to you daily, weekly, monthly, or quarterly. You can also choose to enable an automatic date-range comparison in your scheduled report from this tab as well.

If you receive your report in a PDF file format, Google Analytics will not only send you the dashboard, but it will also send you each individual report that you have on your Dashboard at that time (Keep Reading for more on that).

The Trending Graph:

Google Analytics Trending Graph

Directly below both the Date-Range Tool and the Export / Email Options, you will see the Trending Graph (how can you miss it? :)) , which is available in almost every report in Google Analytics. With the Trending Graph, you can do a few different things. First, each point on the Trending Graph corresponds to one day – mousing-over any point will display a mini-window with that day’s date, and the number of Visits that occurred on that date. To change what the trending graph is graphing by, click on either “Week” or “Month” towards the right-hand side of the graph, and it will update accordingly.

Now, see where it says “Visits” to the far right of the graph? Click on that little arrow that’s pointing down to enable the Graph Mode menu:

Google Analytics Graph Mode Options

From here, you can change which metric the trending graph is displaying simply by selecting any one of those six metrics listed. The link in the middle, “Compare Two Metrics”, allows you to do just that – compare two different metrics at the same time. The second metric will be represented by an orange-colored line in the trending graph. You can also click on the link to the right, “Compare to Site”, to compare any metric for one individual page or one set of pages against the entire site. This comes in handy when you’re looking at one page, or a group of pages, and want to see how they are doing in comparison to everything (as a whole).

The “Site Usage” Window:

Below the trending graph is the Site Usage window. These six metrics are the very basics of your website’s data. This report window is the only item in the dashboard that you can’t play with (sorry!).

The Report Windows:

Google Analytics Report Window

Finally, below the Site Usage window is each individual report window. By default, Google Analytics gives you four default Report Windows: Visitors Overview, Traffic Sources Overview, Map Overlay, and Content Overview. When you create a Goal within your profile, Google Analytics adds a fifth window, Goals Overview, and when you enable Ecommerce reporting, it adds a sixth window, Ecommerce Overview.

All of these windows (or widgets, or reports) can be moved around to your liking. Simply click-and-drag the gray heading part of the window, and drop it wherever you’d like. You can also close any report window, thereby removing it from your Dashboard, simply by clicking on the gray “X” on the upper-right hand side. Finally, you can click on “View Report” to be taken to that particular report’s main page.

Any report in Google Analytics is available to be added to your dashboard, which will add one of these report windows for you to play with. This, in essence, “saves” your work, because when you click on the “View Report” link, you will be taken to the same report page with your exact same options that you had enabled or disabled when you clicked on the “Add to Dashboard” button.

Look for a follow-up post next week, where I will talk about creating an effective Google Analytics Dashboard, and what you can do with one.

April 4 2008

Tryin’ to make a dollar outta fifteen cent!

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After I revealed through a reference in my last blog post that I like Star Trek, I thought I would use today’s post to earn back whatever “cool” or “hip” points that I possibly can. Because trust me, I need all the cool points that I can get.

I don’t listen to rap or hip-hop. It’s not that I have anything against it – it just isn’t my thing. I’m more of a hard rock and even classic rock guy. But over the years, I’ve heard one particular phrase (or a part of the phrase) used in several different rap or hip-hop songs:

“…I’m tryin’ to make a dollar outta fifteen cent…”

I must have heard it again somewhere in some song, because I can’t get it out of my brain recently. Of course, what’s the first thing I think of when I hear it?

“…wow, that’s over a 600% ROI!”

I know, I need some help, and lot’s of it. But before I turn on MTV and catch up to the last 15 years, I’d like to help you be able to see if YOU are making that dollar from those fifteen cents, and getting a pretty good return on your cost-per-click marketing investments. This isn’t something that is a metric or a statistic in Google Analytics, or any Web Analytics platform by default – this is what’s called a Key Performance Indicator, or a KPI. A KPI is usually a ratio or a percentage that, like the term says, is a KEY for you and your business. You can use this KPI to keep track of the true performance of your cost-per-click initiatives – not just an Ad’s click-through rate, but whether or not that campaign, ad, or keyword actually sold something for you – and made you some money.

Let’s use Google Analytics and take a look at a few reports where we can get this KPI, which I’m currently calling “PPC Dollars Spent to PPC Revenue Earned”.

1. Traffic Sources >> All Traffic Sources (Ecommerce Tab)

All Traffic Sources (Ecommerce Tab)

Here, it’s pretty simple: does the revenue amount that you’re seeing for each CPC traffic source meet or exceed your expectations, in comparison to the amount of money you spent with each CPC traffic source for that same time period? If the answer is “Yes”, then the combination of your keywords, ads, targeting, landing page, and so on are doing their job – bringing you revenue! If the answer is “No”, you have two general options: consider not advertising with that particular CPC traffic source, or find a way to refine and optimize it to improve your return on investment.

2. Traffic Sources >> AdWords >> AdWords Campaigns (Clicks Tab)

If your Google AdWords and Google Analytics accounts are properly synched, you will be able to see your AdWords data right within the “Clicks” tab within that report. There, you can see your AdWords Costs, and all you have to do is click on the “Ecommerce” tab to see the revenue generated by your AdWords efforts. You can also use the ROI and Margin metrics within the Clicks tab to give you even more validation if your AdWords Campaigns are working (I can safely say that if you’re making a lot of money, your AdWords Campaigns are “working”).

3. Goals >> Goal Value (And several other reports)

Your Potential Goal Value! :)

This report is perfect for those of you who are not “Ecommerce” oriented, and don’t sell anything through your website, and have inquiry or lead generation forms as a means of a Conversion Point instead. All you need to do is assign a Goal Value, and you should be able to get a pretty close idea if your CPC efforts are doing what they are supposed to be doing. You should also read my blog post about Goal Values, and how to calculate them.

So, what’s a good “Dollars Spent to Dollars Earned” Ratio?
Of course, this depends on several factors, including what you’re selling, what your expectations are, etc. You can (and should) set your own benchmark – find out what your “Dollars Spent to Dollars Earned” Ratio is, and go back a few months to see how it has fluctuated over time, and track its progress into next month.

But I know what you’re asking – you’d like for me to give you a hard number, like “400%” or “1:5”. This would actually break cardinal rule #1 of being a good Web Analyst if I were to simply throw out an arbitrary percentage or ratio for you to use. However, in the spirit of this blog post, I am going to give you a number. (Sorry Web Analytics community!). The number is 1:6.6667. In lay terms, that roughly equates to making one dollar for every fifteen cents that you spend. Hey, dozens of successful hip-hop stars and multi-billion dollar rap moguls can’t be wrong, can they? 🙂

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