Saturday, January 26, 2013

Segmentation Please

     Any web analytics expert will tell you how important segmentation is for your overall measuring strategy. Visitors that come to your website are never going all be the same. They will never have the same characteristics and they will never act the same or be looking for the same things. (1).  Yes, many of them will have some of the same attributes but they will never have the exact same attributes. This provides analysts with the ability to group visitor and analyze how each of those groups contribute to the goals of the site. This post will summarize some high level steps on choosing segments and how to use them to your benefit. 



I need to segment…Who do I segment?

   The answer to that question really depends on your business and who your customers are. Who you decide to segment should help you get closer to understanding what groups are affecting your KPIs whether positive or negative. There are segments that pretty much apply to all ecommerce sites, which I mention below, and others will be up to you based on your business and the activities visitors perform on your site. (3)

Marketing Channels

   The first segment that most site owners can focus on is their online marketing channels. These are channels used, and usually paid for, to get visitors to your site, also known as your traffic sources or acquisition channels (2).  It is important to determine how each channel is contributing to your sites KPIs and if those marketing channels are providing a return on investment.  These channels can include PPC, SEO, email, display, social, direct, and possibly others.   When comparing the time and costs that each of these channels take to provide visitors and metrics do they provide an increase in KPIs? You can make actionable decisions on those channels based on their affect . If the channel is under performing, it needs to be determining what can we do to improve and optimize or do we need to reduce the amount of time and effort we put into that channel?


Orders from the PPC segment



Geo-Locations

   Visitors will behave differently based on the locations that they are visiting from. Analyzing the areas of the country, or maybe even the world, can help site owners determine which areas are most profitable, purchase the most products, or are most responsive to internal promotions. Once analysis is done to determine which geo locations affect KPIs promotions and targeting can be positioned to those areas to improve conversion and revenue.  Site owners could also use this information to investment more on online marketing for areas that are performing well to attempt to drive engagement.  

Visitor Behavior

    We have already looked at how visitor behavior can change based on where they come from and where they are located, but we can also group visitors by the level of engagement they had with the site. Visitors who have had a certain number of visits or consume specific number pages per visit can have different affects on your KPIs and secondary metrics. (2) For example, visitors who have 3 or more visits may be more likely to convert and may not need to be sold to as much as those who are on there first time visitors. Internal marketing messages can be more focused and provide rewards to those groups that have more engagement with the site.  These segments can also be used in remarketing efforts, for example, if it has been some time since certain visitors have made a transaction on the site or returned for a visit or possibly have come to the site and consume many pages but have not purchased to provide them with marketing efforts to entice them to make a purchase. These could be things like sending emails, do providing display advertising related to products they have purchased or used.

Segments for Strategy

The fundamental use for segmentation is to better understand who the most valuable visitors are and how they interact with the site. We can use this information to determine how well changes to the site and marketing efforts are doing according to our KPIs. (3) Once we know what those high value segments are and we know what changes produce positive affects future strategic decisions can be geared toward those segments.  






For more information on segmentation see Avinash Kaushik's post:

http://www.kaushik.net/avinash/excellent-analytics-tip2-segment-absolutely-everything/



   


11.Avinash Kaushik, Web Analytics 2.0
33. Eric T. Peterson, Web Analytics Demystified