The following is Part IV of E-commerce & Web Analytics:
Part I: Visitor Targeting & Acquisition
Part II: Landing Page Effectiveness
Part III: Cross Selling & Checkout Optimization

Analyzing & Segmenting Data

A successful E-commerce website is a dynamic virtual marketplace. It should change over time, evolving to serve its visitors better by using their input to direct the modifications. But running surveys and asking for their votes or comments can be intrusive. Luckily there is really no need for any of that if a good analytics tool is in place because your visitors indicate their preferences with their actions on the website.

Here is a simple example of using metrics & analytics to optimize a website by examining product page visits and product conversion rates:

• High visits/high conversion. Don’t waste your energy here. This is a winning product.
• High visits/low conversion. This is Holy Grail of this report. Consider better merchandising, improved copy, and testing price points.
• Low visits/low conversion. This indicates either there’s little interest in the product or visitors aren’t finding these products on the site. Consider removing or replacing the item.
• Low visits/high conversion. Consider bundling these items with other top-selling products to increase their visibility and drive more traffic to them.

The amount of analysis that can be done is simply determined by the power of the analytics program. The better analytics programs collect and store more data and allow for more segmentation when analyzing visitor/keyword information. Segmentation is the ability to view data using filters such as natural vs. organic & first time vs. returning buyers. Better analytics programs allow more in-depth segmentation such as first time Google PPC buyers, buyers who used a group of keywords and more.

The ability to view the vast amount of data generated by visitors to an E-commerce website, in turn, allows the online advertising budget to be used more wisely. Shifting monies from poorly converting campaigns, engines, or keywords towards higher converting mediums allows for a better return on investment. An analytics program can also be used as leverage against PPC outlets when a debate over click fraud occurs.

The only way to analyze data is to be able to track and measure it. It is not a matter of having visitors do anything more, but simply a matter of whether the program tracking their movements and decisions can organize, store and manipulate the data they create. The data itself has been there since day one and will continue to be generated every day by new & returning visitors.

Perhaps a good analogy would be telescopes. With a hand-held telescope one can see for several miles. Stepping up to a mid sized telescope mounted on a tripod, one can see the moon and perhaps Venus. Using the Hubbell Telescope, one can see to distant galaxies. Even though the man with the hand-held telescope couldn’t see distant galaxies, the galaxies were still there. It was simply a matter of having the right tool to for the job. Analytic programs are much like telescopes in that each program has a limit of how much data it can see. The data is always there, but the ability to see it all hinges upon having an analytics program that has the capabilities to mine the data.