Monthly Archives: April 2007

Web Analysis and Drawing the Line

There are a few phases that companies go through with analytics. The first phase is misunderstanding and frustration. Starting with no understanding of purpose or capability of analytics they move swiftly into paralysis by analysis; they’re drowning in so much data they don’t know what is relevant and what isn’t. Soon, an agency steps in and simplifies everything: pick 4-6 good KPIs and look at trends. Look at top-level numbers first, and then delve deeper only as needed. Companies get so good at this they can literally evaluate and improve their sites down to fractions of a percent, which can be big money when you’re talking about 9-figure sales. But there is a third phase: obsession, compulsion, and micro-analysis, where small quantifiable decisions are given exaggerated importance. This is a time to walk away from the charts, and many of us have been there.

Tonight, I attended the Atlanta Interactive Marketing Association (AiMA) monthly event. Tonight’s talk concerned the important of page layout and optimization to improve conversion rates. All three case studies had similarities. All presenters were from Fortune 500 companies — Delta, InterContinental Hotels Group, and Budget/Avis — who book hundreds of millions (billions actually) in revenues through their ecommerce sites.

The presenters all had unique problems and solid systems in terms of tools, procedures, and adequate staffing to monitor site changes. They had the right monitoring tools and diagnostics in place and know when to consult them for troubleshooting and gauging performance.  They also knew when to optimize their site and when to reach out to other areas, such as partner integration, knowing their customers needs and wants, and simply keeping in front of them. They all knew optimization is not a magic bullet, but a lot of folks make this mistake.

A lot of webmasters who have moved past paralysis and simple KPI’s engage in some form of split testing (A/B or multivariate) to tweak and test seemingly insignificant changes on a page. What works better, a red submit button or a blue one? Should the welcome line be bold? Do the words “act now!” or “Buy Now!” get a higher conversion rate? Tweaking element after element on the page to statistical significance reveals what works better, and marginal improvements add up. All 3 presenters had personal accounts of tweaking and re-tweaking page elements that might yield a 2% conversion rate improvement… which translated to an extra $20 million in annual revenues booked online.

What marketer wouldn’t love this! What company doesn’t need this? You make some seemingly insignifant changes, quantify them and see the needle move slightly, and you can take credit for moving the business forward. Who wants to leave extra money on the table?

I’m not attempting to debunk this. Analytics are a Godsend to those of us who remember the web when the only choice was page hits and server logs. Numbers don’t lie, they reveal the blantanly obvious but overlooked problems. They solve arguments between team members. And they help us keep our jobs by indisputably proving our worth to the company.

But you can definitely go too far. First, I am skeptical about how the industry vendors are training companies to write their scorecards. There’s a few different ways the current wisdom goes, but here’s a simple example: start with your primary web metric, such as sales dollars or leads. Calculate average sale (dollars) or average lead value; if you don’t know what an average lead is worth, ballpark it by taking total annual sales divided by total leads.

Let’s say your average sale (or average lead value) is $100. Your conversion rate was 1%, and you’ve increased it to 1.1%, an increase of 10% (nice job, by the way).  This is just for a single sale, and you have 10,000 site visitors a day. Web consultants like to extrapolate it out to see the total value of the percentage increase. Careful though, this isn’t a forecast of what you’ll actually sell. Ask the finance guy for that.  Here’s the web analyst’s simple extrapolation of your impact to the bottom line:

BEFORE: Conversion rate at 1% 
10,000 visitors  x  .01 (conversion rate) = 100 sales x ($100 avg. sale) = $10,000/day

AFTER: Conversion rate at 1.1% (as you can guess, the revenue should be 10% higher)
10,000 visitors  x  .011 (conversion rate) = 110 sales x ($100 avg. sale) = $11,000/day

By this simple extrapolation (again, not a forecast), you’ve increased revenue $1,000 a day, $30,000 a month, or $365,000 a year, assuming your average accounted for seasonality. Not bad for making a few minor text and color tweaks! Who can argue with 10% more efficient and 10% more money?

But not so fast. There are always times that an inefficient site loses sales opportunities, but it’s a poor assumption to take the 10% sales boost literally. Things aren’t so cut and dry. You might dramatically increase efficiency and your revenues may not budge. What if your website is terrible? Maybe you’re getting the sales to your call center. True, a site is cheaper than human operators, but now you’re talking cost-recovery, not increased sales. Or, your site conversion rate might go up, coupled with traffic going down. Perhaps your site is now so compelling that instead of visiting, leaving, visiting, leaving, visiting, converting, visitors now convert on the first visit. So you got the sale on the first try, but you didn’t actually get any more customers. Or maybe you sell a product or service on your own web site and it is also available on another website. If your site gains efficiency or captured sales, you might just be stealing sales from another site.

These are all extreme scenarios but they illustrate that there are many variables. A 5% conversion rate increase might not be adding 5% to your bottom line, though it’s almost certainly not hurting it. But what are you spending your time on?

One of my favorite search agencies has a miner’s pan of gold dust for its corporate identity. The metaphor is perfect for ecommerce as well: start with a coarse sieve and go after the big pieces first. When you find a good spot, keep panning and keeping using finer and finer sieves to strain out as much of the gold as you can capture. But realize that you’re seeing diminishing returns the longer you stay there. At some point, your competitors have moved up stream. Or maybe they dug a mine. You need to think about moving along as well.

You still need your idea people, your usability and human factors folks, and some good designers and developers.  Continue to chase the little stuff and constantly refine your site, but don’t forget to innovate either.

What do cyclists do when they can’t cycle?

My inability to ride due to injury leaves an unbearable amount of free time. Do any cyclists out there remember what it was like to have time to read, cook, watch television? It just doesn’t happen when the weather’s nice and you’re healthy… 

Some friends actually invited me to an invite-only clinic up at Free-Flite to see Chris Eatough speak. I don’t think I had any questions, I think I really just wanted to bask in the glow of people who can actually ride bikes right now. I hadn’t seen any of the local endurance crowd since I had the amazing experience of racing near Eatough at the 24 Hour World’s back in October.

It sounded as if the clinic was falling through; in any case, I found out that they were hosting it at Free-Flite in Marietta. No way I was driving that far north in rush hour, even if Gandhi was going to give the keynote speech.

Chris just returned from Sea Otter, where Grippped Films hosted the premiere of it’s latest documentary. I’d ordered my copy of ’24 Solo’ the other day, and ended up having a long conversation with Ken Bell, one of the filmmakers. What a great guy Ken is. The riding community is full of people like Ken who only wish to share in your stories as well as tell their own.

The new trailer for 24-Solo is up, and pre-orders of the movie are shipping this week.  You can’t even buy a crap cassette for $25, so ‘24 Solo’ on DVD is a bargain at twice the price.

Stowaway on the the Obama for America Campaign

As a native Chicagoan, I was delighted when Barack Obama declared his intent to run for president. I’d actually emailed his campaign and offered to assist in any way I could. To my surprise, I got an email last week asking if I’d be available to help his media team shoot video at the Atlanta rally. Of course!!!!

Jen (my wife) has been working in D.C. and was coming into town, and she was also excited to help out. We signed her up as a photographer. Likewise, we enlisted the help of my talented friend and pro-photographer, Andrew Kornylak.

Jen and Andrew worked the crowd to get the sort of grassroots photo journalism shots of people that most main stream photographers overlook. My task was to interview the crowd and document the qualities they expect in the next president of the United States.

One big perk we received were the press-passes that gave us access to the entire venue. Most of us stayed right in front of the stage, until the police evicted us. No matter, it was exhilarating while it lasted.

Jen and Andrew got some great shots. One of Jen’s was actually chosen for the homepage on BarackObama.com!

Barack Obama Atlanta Rally
(photo by Jennifer Wills)

Photo by Andrew Kornylak
(Photo by Andrew Kornylak)

Photo by Jennifer Wills
(photo by Jennifer Wills)

Barack Obama takes the stage
(Photo by Jennifer Wills)

The Senator was stirring, inspiring, humorous at times, and always engaging. I really appreciated not only his vision, but his frankness. He’s ready, willing, and able to lead. Above all, he may not have all the answers (does anyone?); his commitment isn’t to posturing, but rather to doing what is right — no matter the difficulty. Justice in all things.

I must have interviewed at least 50 people at the rally. There really was a diverse group from all backgrounds and walks of life. I talked to business people, grandparents, students, teachers, public servants, you name it. One gentleman in the front row hadn’t voted Democrat in 32 years but was ready for change. I spoke with a marine veteran, concerned about his friends in Iraq. I spoke with a mother who told me her gray hair was a result of worrying about her son in Iraq. I spoke with recent immigrants and families who showed me their daughters and said “this is the future.” Several people compared the Senator to JFK. A few more compared him to FDR. Barack was charming as always. He started off telling a few personal anecdotes and how when he thought about declaring his intent to first run for office (State Senator in IL), he did what most first timers do and he consulted two higher powers: he prayed to God, and he spoke with his wife. Barack spoke a lot about change over the course of history and how the American people needed to take their gov’t back. I won’t give away too many spoilers, you need to see the footage.

I should mention that quite a few people in the crowd likened him to JFK. Some had no idea what he stood for, but had a gut feeling he was different. Many talked about his commitment to the long-term vs. the here and now.

What’s really been missing from politics is leadership; the two are definitely not the same. A good leader gives leadership to the masses and also receives it from them. I saw a lot of that yesterday, the idea that our leaders guide and inspire us, but also respond to our needs and our desires. We lead them from the ground up and tell them what is important to us. The good leaders take these movements and drive them. The term “grassroots” is typically a perjorative, when really all successful movements are grassroots. Unless you live in a fascist country, most national policy originates as a citizens’ movement before being co-opted by a national party.

I digress. I was refreshed today. It’s still too early in the primaries to know how things will play out. Obama is still refining his stump speech, and all the candidates know it’s a long road ahead. Certainly, Atlanta is a city sympathetic to him. He may have taken some liberties and used this rally as an experiment here to see how some of his positions would play out in the tougher and bigger markets.

Check the www.BarackObama.com blog and TV postings to see updated video. Here’s an amateur cam of the event, I’m sure more is on the way.

Kurt Vonnegut

I’m saddened by the passing of Mr. Vonnegut. I’m ashamed to admit that I hardly ever read fiction anymore. I’ve denied myself the indulgence of even an occasional morsel of fiction; that’s too bad, because a well-written piece of sci-fi or satire such as the sort Mr. Vonnegut used to write would often do more to stimulate dialogue along important issues than could actual fact.

NPR includes several links to biographies and a few interviews, including Vonnegut’s 2005 appearance on the daily show.

Stolen from www.vonnegut.com:

 

Kurt Vonnegut, Jr.
1922 — 2007

We All Need Change

Sifu Eddie Camden likes to say “that person going 45 MPH in the left lane in front of you is teaching patience. The person tail-gaiting you at 85 MPH is teaching you compassion.”

Tonight, I reached an even higher state of enlightenment while commuting on 400 Southbound.

HAIKU:

Waiting at toll booth
Stuck behind you six minutes
Sign says exact change

toll booth on 400 south, atlanta