1. Let’s make web analytics
more customer-centric!
Jiri Brazda @ eMetrics Stockholm
19 September 2011

2. I started out 5 years ago…
In 2006, I
worked at
a bank that
doesn’t exist
today with
a tool that
doesn’t exist
either!
Let’s make web analytics more customer-centric! | Optimics 2
2006 2011

3. … in 5 years it’ll be all different again
 Why? Current tools stress simplicity and trick non-expert analytics users into using
simplistic metrics to understand customer behaviour & business performance.
 Jim Sterne: How Idiots Track Success http://j.mp/idiots-track-success
Let’s make web analytics more customer-centric! | Optimics 3
I hope

4. Bounce
rate
Conversion
rate
The
culprits
Let’s make web analytics more customer-centric! | Optimics 4
Question: Why don't you put a lot of stock in conversion analytics?
I have a problem with metrics that do not correlate with annual
customer performance. Conversion Rate is one of those metrics.
Conversion is important, but it does not measure customer
relationships. We shouldn't care if a customer visits your website six
times before purchasing ... that's still a conversion ... yet we demand
that the customer buys in the first visit. Focus on annual retention
rates and new customer counts. http://blog.minethatdata.com/Kevin Hillstrom

5. Let’s make web analytics more customer-centric! | Optimics 5
Individual
customer
Time Multiplicity
Win the analytics race!
channels, product
categories, delivery
options, site
sections, product
features, devices
customer lifecycle,
recency, frequency,
seasonality
value,
profitability

6. Time-based customer value metrics
Let’s make web analytics more customer-centric! | Optimics 6
 Average gross margin per customer:
Paid Search budget may be at least 4x bigger if
you consider expected 12-month revenue for
a new customer… BUT only if you don’t pay Google
over and over again for the same customer!

7. Introducing multiplicity
 Channel migration from First Order Channel to long-term
Channel Preference:
 Channel Preference = channel that is associated with more than half of all
transactions of any individual customer. If no such channel exists, it’s
defined as MIX (ie. multiple channels)
Let’s make web analytics more customer-centric! | Optimics 7

8. Customers who stay in
Paid Search channel are
much less profitable
 They generate less 12-month margin and keep
costing you money in your Paid Search budget
Let’s make web analytics more customer-centric! | Optimics 8
 Average gross margin per customer:

9. Customers who migrate
out of Paid Search are
new loyal customers
Let’s make web analytics more customer-centric! | Optimics 9

10. Paid Search is good for
acquiring new customers
but nowhere as good for keeping existing customers…
Set MAX(CPC) by calculating
 expected 12-month revenue / profit by First Order Channel
 expected 12-month (re)acquisition cost by First Order
Channel and long-term Channel Preference
Let’s make web analytics more customer-centric! | Optimics 10
Measure new customers and don’t forget to use customer
value, time and multiplicity!

11. How did we go about this analysis?
1. Preprocessed order data from
backend data warehouse (esp.
creating customers out of orders)
2. Loaded campaign and traffic
source information for transaction
IDs via Google Analytics API
3. Joined up all data through
transaction ID and analysed
and visualised together
Let’s make web analytics more customer-centric! | Optimics 11

12. Let’s make web analytics more customer-centric! | Optimics 12
Q / A
jiri.brazda@optimics.cz +420 602345620