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:
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? :)).
I have just a couple of quick news items to pass along to you today.
First, there was a bug in the Google Analytics Ecommerce Tracking that seems to have affected a handful of accounts from April 30th to May 6th. It looks like the issue is now fixed, but there may have been some serious drops in Transactions, Revenue, and other Ecommerce related metrics in your Google Analytics account for that period of time. It only appears that it was the Ecommerce section of reports that was affected — Goals, Visitors, Content, and Traffic Sources seem to have been working properly the entire time.
Unfortunately, it doesn’t seem that Google will be able to go back and fill-in the missing data that your account may not have been able to collect. However, not to worry — in the grand scheme of things, this shouldn’t have any long-term effect on any trends or averages, from an analysis standpoint.
Also, I attended a webinar on Wednesday from Google TV Ads. In this webinar, one of their slides was a TV Ads report within the AdWords sub-section of reports within the Traffic Sources section, similar to the “Audio Campaigns” report that was introduced about a month ago. So, look for this new report section to be activated within your Google Analytics accounts sometime in the very near future!
See you next week.
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)
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)
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? 🙂