Acquiring High Value Customers

Answer

Successful eCommerce begins with attracting the right visitors to your site. Given the diversity of options for reaching customers?across search engines affiliates banner advertisements or even email?it is critical that organizations closely track and manage the performance of their marketing investments to ensure that they are optimized to drive traffic customer loyalty satisfaction and value.

This chapter documents best practices designed to help managers and analysts understand the effectiveness of pay-per-click campaigns and allocate spending appropriately increase the relevance of banner and email promotions and optimize marketing landing pages to drive conversion.

Business Owners
Responsibility for acquiring high value customers is typically placed in the hands of marketing organizations. Marketing managers and analysts should work closely with merchant teams to determine the appropriate placements for products. Coordination with site directors and designers is also important to ensure that marketing links drive visitors to the right landing page and that the page is optimized for the campaign.

Best Practices
Digital Analytics presents several best practices for acquiring high value customers including:
? Allocating Channel Spend ? Shift and optimize marketing spend levels across vendors and categories within a marketing channel to increase return on marketing investment.
? Increasing Keyword Effectiveness ? Improve the performance of existing keyword marketing placements and identify new cost effective opportunities for keyword purchases.
? Uncovering Product-Specific Keyword Opportunities ? Target customers with keyword campaigns for specific products to increase search marketing relevance and conversion.
? Improving Promotional Relevance ? Refine banner or email campaigns targeting specific products to improve click-through and conversion.
? Refining Email Layout and Design ? Identify key real estate and creative within emails that generate the most click-throughs and transactions in order to maximize the value of future emails.
? Optimizing Landing Page Performance ? Identify underperforming pages of entry for the site and uncover opportunities to enhance landing page effectiveness to increase marketing conversion.

2.1 Allocating Channel Spend

Goal
Shift and optimize marketing spend levels across vendors and categories to increase return on marketing investment.

Reports
This best practice leverages the following report:
? Marketing Programs

Steps
1. Isolate for analysis marketing traffic for a specific channel such as search engine pay-per-click campaigns. It is important to compare within a single channel to ensure relevant comparisons. This example analyzes the paid search channel.
2. Categorize marketing traffic by vendor and campaign type for the channel you wish to analyze. Examples of paid search vendors are FindWhat Google MSN Overture and Yahoo. Campaign type in this instance refers to branded versus non-branded keywords.
3. Obtain performance data for each of the vendor groupings you have created including number of sessions conversion rates and transactions driven by each.
4. Present this data side-by-side creating calculations for sessions as a percent of total sessions and transactions as a percent of total transactions. (This is illustrated in the sample output below.)
5. Obtain the same data for the marketing vendors that you wish to analyze.
6. Aggregate comparable campaigns across vendors to get a full picture of category performance regardless of the network where the campaign was placed. This example uses aggregated branded keywords across all vendors to evaluate the effectiveness of the entire paid search strategy.
7. Present this data side-by-side creating calculations for sessions as a percent of total sessions and transactions as a percent of total transacted. (This is illustrated in the sample output below.)

Actions
For both the vendor and campaign comparison analyses marketing analysts should evaluate the following:
? Identify vendors and categories where the % of transactions is higher than the % of visitors ? These categories represent opportunities for additional investment because they deliver a larger share of transactions than their traffic would indicate. Consider shifting marketing budget to increase spending on these vendors and campaigns as well as investigating campaign creative to identify best practices that can be transferred to underperforming placements.
? Identify vendors and categories with high conversion rates and overall % of transactions ? These metrics help you identify campaigns that attract high value visitors in general. Make changes and improvements to these vendors and campaigns a priority over other marketing efforts. Consider A/B testing on campaign creative for these categories to improve performance as well as expansion and refinement of keyword lists in these areas.

2.2 Increasing Keyword Effectiveness

Goal
Improve the performance of existing keyword marketing placements and identify new cost effective opportunities for keyword purchases.?

Reports
This best practice leverages the following reports:
? Marketing Programs
? Natural Search
? On-Site Search

Steps
1. Identify traffic and conversion data at the keyword level for all listings you maintain.
2. Create two additional columns within this data set?one for exposure value and one for effectiveness value.
3. To assign these values you will first need to get the average traffic and conversion rate driven by your keywords.
4. For the exposure value sort by traffic volume. For all amounts equal to or greater than the average assign a value of ?high." For all keywords below the average assign a value of ?low."
5. For the effectiveness value sort by conversion rate; for all amounts equal to or greater than the average assign a value of ?high." For all keywords below the average assign a value of ?low."
6. Create a 2x2 matrix with exposure and effectiveness as the axes; label each quadrant appropriately for your business. (Refer to Table 2.2 sample output below for an example.)
7. Label each of your keywords according to the quadrant into which they fall for analysis.
8. Generate a list of search terms which represent potentially new untapped opportunities by obtaining a list of the top 100 search terms visitors use to reach your site through organic search and the top 100 search terms that visitors use to find products or information within your site search engine.

Output
The output of this analysis will result in each keyword being mapped to a quadrant in a 2x2 matrix. A sample quadrant for evaluating keywords is provided below in Figure 2.2; you should tailor this to your specific business needs.? Table 2.2 lists keywords with their respective quadrant rankings; this is the output of a typical analysis.

Actions
For each set of keywords analysts should consider the following:
? For terms with high effectiveness and exposure ? ?These are your most valuable keywords. Focus a majority of your A/B testing efforts in this quadrant and consider expanding purchases in this area with variants on these terms.
? For terms with high exposure and low effectiveness volume ? These links generate a lot of interest but have below-average conversion rates. Investigate ad and landing-page creative to ensure you are obtaining qualified traffic and presenting visitors with the right products.
? For terms with low exposure and high effectiveness volume ? These terms convert customers but are underexposed. Investigate positioning and ad copy on search engines to optimize these links to generate more traffic.
? For terms with low traffic and transaction volume ? These terms generate minimal traffic and convert customers at a below-average rate. Carefully evaluate the ROI for these terms to ensure they are worth the cost.

For keywords identified through natural and on-site search analysts should consider the following:
? Exploit untapped keyword marketing opportunities ? The list of top 100 natural-search and on-site search terms should provide insight into how users think about your site offerings and how they search for your products. Strongly consider any terms not already purchased from this list as candidates for your paid search campaigns. Leverage natural search conversion rates to estimate bid levels.

2.3 Uncovering Product-Specific Keyword Opportunities

Goal
Target customers with keyword campaigns for specific products to increase search marketing relevance and conversion. This exercise shows what visitors that show interest in specific products are searching for through organic search and on-site search. This is most often used to drive keyword discovery for key products and promotions.

Reports
This best practice leverages the following reports:
? Merchandising/Products Zoom
? On-Site Search

Steps
1. Identify the products or services you want to market.
2. For each product or category zoom to understand natural and site search results that drive visitor interest and transactions.
3. For each site search you identify as related to your product zoom to identify similar search terms that visitors entered.

Actions
Marketing analysts should consider the following for key product initiatives:
? Terms that are not currently a part of existing pay per click (PPC) campaigns ? Consider purchasing these terms to augment existing campaigns given their demonstrated correlation to product interest for visitors.

2.4 Improving Promotional Relevance

Goal
Refine banner or email campaigns targeting specific products to improve click-through and conversion.

Reports
This best practice leverages the following reports:
? Marketing Programs
? Marketing Zoom

Steps
1. Identify campaigns that promote specific products services or categories that you want to analyze.
2. For each zoom on the campaign and note the top items sold to campaign responders.
3. Identify items with high conversion rates and transaction volume which were and were not a part of the targeted marketing campaign.

Actions
To improve campaign relevance marketers should:
? Increase promotion of top items ? For the items in the campaign that were transacted often consider promoting these products more heavily in future versions of the campaign. Possibilities should include showcasing the product with more compelling creative or placing it in a more visible location within the email or landing page.
? Remove promotions for items that do not result in transactions ? If a promotion for a specific product is not driving the intended result consider removing the item to make room for more popular products.
? Consider adding cross sell recommendations for other items that were popular ? For products that were converted on but were not included in the promotion consider adding these items to your campaign emails and landing pages as cross sell recommendations.

2.5 Refining Email Layout and Design

Goal
Identify key real estate areas and creative within emails that generate the most click-through and transactions in order to maximize the value of future emails.

Reports
This best practice leverages the following reports:
? Marketing Programs or Inbound Link Analysis

Steps
1. Ensure that each link within your email can be uniquely identified either through the URL or a tracking code appended to the URL.
2. Obtain data for clicks and transactions for each link within the email you wish to analyze.
3. Using open numbers provided by your email vendor calculate click-through ratios for each link.
4. Calculate the percent of transactions contribution for each link by dividing the transactions generated from each link into the total transactions generated by the email campaign.

Actions
To improve email marketing marketing analysts should do the following:
? For links with high click-through rates and percent of transactions ? This type of creative and positioning clearly attracts the attention of high value visitors. Take note of the offer or call to action. Is it a featured product or service certain messaging offers or imagery calling these high value visitors to action? Is the location of the link within the email prime real estate? Use similar creative and positioning in future emails for high value items or calls to action.
? For links with high click-through rates and low percent of transactions ? These links are driving interest but customers are unable to find the information they need once they reach your site. Evaluate email landing pages to ensure the content presented is consistent with the content in the email and that registration processes are optimized to enable visitors to convert.

Using the example data from Table 2.5:
? The first call to action link (Register Now) received the highest click-through and percent of revenue. Notice that it is the highest link on the page with text that clearly calls users to action with an arrow indicating forward movement. In future emails Onlinestore.com should locate their most important products in this area of the page and leverage similar forward movement imagery to drive response for this call to action.
? The featured case study link drove more than 18% of click-through but less than 9% of transactions. The Onlinestore.com team should check the link to ensure it drives customers to a page where they can download an actual case study and ensure that the download process is easy to manage.

2.6 Optimizing Landing-Page Performance

Goal
Identify underperforming pages of entry for the site and uncover opportunities to enhance landing-page effectiveness.

Reports
This best practice leverages the following reports:
? Top Entry Pages
? Page Zoom
? Clickstream

Steps
1.?Identify the top ten pages of entry noting average time-on-page for each.
2.?Zoom on each page and calculate the bounce rate for each by dividing one-page sessions into total sessions.
3.?Build a Clickstream to visualize user paths from underperforming landing pages to understand customer intent and abandonment.

Actions
Site designers should drill down to perform detailed analysis on the following types of key landing pages:
? For pages with high bounce rates ? This may be an indicator that users are not seeing the information they expect or want and are immediately departing (likely to continue searching the Internet to find another vendor). Consider all the referral sources leading users to these pages as well as the offerings and promotions on the page and optimize accordingly. For example ad copy on paid-search marketing could be improved to give users a better idea of what to expect once they click through the link resulting in more qualified traffic.
? For pages with longer than average time-on-page ? This may indicate that products or services are hard to find or the page layout is confusing. These pages should be compared to pages with lower than average time-on-page to determine problem areas and identify opportunities for better usability. Analysts should also consider viewing Clickstream paths of visitors from these pages to understand what products and content visitors were seeking. This information can then be presented prominently on the landing page as opposed to forcing visitors to search for it.