Advanced Analytics for Understanding Consumer Behaviour
Marketing has always been focused on influencing consumers. From prompting the purchase of a new product, to simply creating brand recall in a cluttered market place, the heart and soul of marketing is really about changing behaviour. So then, it makes sense that your marketing measurement strategy should be focused on the behaviours that generate revenue for your business. By analyzing key behaviours, you gain a better understanding of your market and you can then optimize the return on investment of your marketing spend. As digital analytics mature, so too has the realization that analysis has to be more focused on marketing metrics than the traditional web metrics (site visits, time on site, bounce rate, etc.) that we’ve become so familiar with. Here are some advanced analytics techniques that allow us marketers to better understand consumer behaviour and translate those behaviours into better bottom line outcomes.
Traditional web metrics have focused on the user’s “session” as the main unit of measurement. Basically, the session begins when a user enters the site and ends when they leave. However, the richness and variety of media formats in contemporary channels coupled with the undeniable popularity of mobile devices has created a new “need” for marketers at large. We now desire the ability to track users as they interact with our site(s) from various channels and also to study their habits as they transition from one device to another. The drive of new age analytics software is not only to collect data from all these various channels and devices, but also to contiguously track individual user behaviour between various sessions and devices. It is important for developers and marketers alike to understand these different behavioural patterns in order to tailor the messaging and user experience within the array of channels and devices.
We addressed the importance of multi-channel attribution in September and we even broached the subject once before that. Needless to say, this topic’s complexity continues to escalate as consumer exposure to multiple online and offline marketing channels, across multiple devices, increases. So, it’s important to stay up to date with the current trends and data if you hope to survive this storm. At this point, most people have heard of attribution, but the main question still remains: “what can attribution do for me?” From a marketing perspective, the three most beneficial outcomes of proper attribution are:
- A more accurate view of how media channels and devices drive behaviours and influence revenue
- A holistic picture how different channels interact and work together within your media mix and at different stages of the funnel
- Insights for scenario modelling and budget allocation for the purposes of optimizing the media mix and improving ROI
While the most advanced attribution analysis tools currently remain in the hands of big dollar (big budget) enterprise clients, recent acquisitions and mergers mean that we’ll likely see increased proliferation through mid-market and small businesses sooner rather than later.
Revenue Based Metrics and ROI
Finally (and perhaps most importantly) is understanding how customer behaviours on your site translate into revenue for your business. In other words, are customers who perform certain actions on your site more likely to make a purchase? More often than not, the answer is an astounding yes! Determining a dollar amount that is attributable to these actions will allow you to monetize all on-site behaviours, even if the behaviour does not lead to a direct sale on the first visit.
This is simple for an e-commerce businesses, but requires a bit more analysis for non e-commerce sites. It first involves determining the most important customer engagement points, and following customers who have completed the desired action(s). From there, a basic equation can be constructed to determine the revenue generated from them. For example, your website generated 250 email newsletter sign ups last month. Of those, a portion came in and purchased $1000 in total goods in the same month as the sign up. Based on this, you can then calculate an average revenue for each new newsletter sign up of $4 ($1000/250=$4). Therefore, if you spend $250 on a new email campaign next month that generates an additional 400 new email newsletter sign ups you can calculate your return on investment (ROI) as follows:
Revenue/Investment = ROI — In this case: ($4*400)/$250=$6.40. For every dollar spent producing the email campaign you can expect to see roughly $6.40 in revenue!
As you can see, these types of analyses go far beyond traditional site engagement metrics. The purpose of analyzing consumer behaviour is to build an in-depth, ongoing understanding of your market and the behaviours that drive your business’ bottom line.
Interested in advanced analytics and consumer behaviour? Drop us a line! We can open up the conversation and help you get to know your customers better.