Friday, 12 August 2011

Six Dimensions of Analysis for a Web Based Business

Most of us are familiar with web analytics thanks to great proponents of this trade, who have really made it large and got web analytics the due credit and recognition it deserves. However as web analysts most of us stop with click stream and do not look beyond that. Today I would like to talk about the other facets of analytics for a web based business which are equally important and would help us as marketers to solve the Rubik.

The First Dimension:

Is off course is what all of us are familiar with the “Click Stream Analysis”, which looks at visitor and customer behaviour on the website. We analyse the various referrers, frequency of visits, number of pages viewed, time spent on the website and more importantly how many converted into sales or leads or any other goals that we have set as success criterion. Another blog on web analytics KPIs which I have written in the past delves in this area.

The Second Plane:

Business/ Trade analysis: This analysis is surely being carried out perhaps in a separate department within your organisation or by business analysts/ consultants who keep the top management updated with regard to the health of the business. The Finance team also carries out this analysis and tracks growth in terms of sales, margin, cost and profit. In case of a business that is done on the web, it is important for the web analyst to understand the sales driven by the website, the profits made from different offering, parameters of growth and other such business KPIs.

To elaborate on the same for an ecommerce website we would look at the year on year/ week on week and other periods of comparison for sales, orders, average order value and growth on these parameters. We would look at factors contributing to growth, what percentage of it is from underlying customers and how much is from new acquisitions. Further also we need to look at operational metrics such as availability, speed and accuracy of delivery, customer complaints, etc. and macro economic factors like inflation, customer spending index, customer confidence measures, etc.

The Third Angle:

The most important element in the entire piece is the customers. How well do we know them? Let’s start with demographics. Who are these customers? Are they, young or old, male or female, where do they live, what is their educational, cultural, social background, how affluent are they, etc. We also need to look at data on how often customers buy from us, how much they spend and what products/ services they bought. This data is mostly available in our customer databases, which we use to target and market using email or even direct mail. We need to also research and understand what drives these customers, what their motivations to buy from us are and when they leave to our competitors why do they leave. This is usually data that we could get by qualitative research.

Fourth Estate:

Is all about competitors. What is our price and promotions position with regard to competition. We have at our disposal competition intelligence tools. These tools are at many levels, if you only need to know what is your visitor market share and market position, tools such as Alexa and Hitwise can help. However if you want to scrape your website or competition website to compare products, price and promotion information then there are service providers like eClerx, profitero and Netvide. These tools provide data to then build a basket of comparative products and the price index of our competitors with ours. This is very powerful as right price is increasingly becoming more important (especially in the online medium, where comparison is so easy) as the determinant of sale/ conversion.

Fifth Slant:

The marketing effectiveness study is our fifth component. This area of analytics is also a mature one as online advertising and targeting has been around and studied for a long time. There are tools like double click, Unica, etc that measure the return on investment of the marketing spend. They also are so advanced that they manage the end to end process of administer/ target the audience and measure the impact. The most popular online advertising channels are search engine marketing, email marketing, affiliate and online media (such as banners and links). Recent times we have more subtle marketing that has caught the interest of marketers is the social media marketing. You can read more on social media marketing in this blog - Social Media.

The Final Piece:

The final piece to the jigsaw puzzle is the new kid on the block – fraud analytics. Big ecommerce websites are easy targets for fraudsters. Analysis in this area involves identifying patterns of fraud attacks and to build rules to prevent them when they hit the website. This could help us to save not only losing revenue but more importantly reputation as well.

Puzzle Solved:

When we look and comprehend all this data impacting and contributing to the business individually as well as in a combination, that is when we could draw more meaningful insight. This would give us a complete picture of how we could improve and optimise the business for better reach, profits, revenue and customer satisfaction.


  1. Well consolidated information. Thanks for sharing.

  2. Thanks for taking this opportunity to discuss this, I feel fervently about this and I like learning about this.
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