Web Measurement Strategies for Small Businesses

By Neil Mason, The ClickZ Network, Nov 27, 2007
Columns | Contact Neil

I've just returned from presenting at an Internet marketing seminar targeted at small and medium-sized businesses. Preparing for the presentation made me think about how to coordinate an effective digital marketing measurement program when you don't have much of a budget. I'm a great believer Arthur C. Nielsen's quote: "The price of light is less than the cost of darkness." Still, companies must live within their means and small businesses often don't have huge amounts of money to spend on data collection and analysis.

So what's an effective Web measurement strategy for a small company doing business online? It actually doesn't look much different from a large organization's strategy. Just the scale and some tools might be different. A small business still needs a holistic approach to measuring its online channel and the right tools in its toolbox. It must have clearly defined online goals and objectives, which can be translated into a set of KPIs (define). A small business still needs the right processes in place to ensure its data's integrity.

In some cases, it might be easier for small businesses to measure online performance. Defining business goals and KPIs may be easier because fewer people are involved in the process. Managing its processes may be easier to ensure pages are correctly tagged and campaigns are properly tracked, for example. Measurement may be easier because one person might do everything.

Small businesses might find it harder to take a holistic view of measuring their online channel by having multiple tools in their toolbox. An effective strategy for measuring and optimizing site performance has four key components:

• Good market intelligence
  
  
• Sophisticated visitor behavior analysis
  
  
• Excellent user profiling
  
  
• Effective site-performance tracking

Market intelligence provides the context for the business's own performance. While the majority of a digital marketer's time can be focused on the brand and its site, it's important to remember that the neither the brand nor the site operate in a vacuum. External factors and forces are also at play. Larger businesses might buy into third-party data providers, such as comScore, Nielsen//NetRatings, and Hitwise. These services are often out of small businesses' reach and may mot even be suitable for sites with lower traffic levels. However, a small business can still uses online resources, such as government statistics and sites like ClickZ, to keep a breast of trends in the industry.

Visitor behavior analysis comes from Web analytics tools. Some sophisticated reporting packages are available for free or at low cost. Google Analytics is free and will suit many businesses' needs for a long time to come. (Microsoft is launching its own service soon.) For those willing to invest a little bit, other tools are suitable for small businesses. I like ClickTracks for its ease of use and some of its powerful analysis features.

User profiling is the process of getting to know who's using your site and why. The basic principles of marketing are about understanding your customers and meeting their needs. In our online environment, a business must know the following:

• Who is visiting my site?
  
  
• What are they trying to achieve? What are their goals?
  
  
• Were they able to do what they wanted to do? If not, why not?

This data can be collected from surveys, and there are plenty of cost-effective Web survey services around (SurveyMonkey, Zoomerang, etc.) that allow you to create online surveys at a reasonably low cost. Just because a survey is cheap to run, it doesn't mean it's low quality. Pay attention to the type of information you're asking for and the way you ask for it.

Finally, site-performance tracking looks at a site's effectiveness from a technical perspective. It encompasses speed of page delivery, site availability, and responsiveness of transactional processes. A Forrester report on this subject shows that users find slow Web sites are less interesting, less believable, and less trustworthy. If you're a small business trying to cut through the Internet's noise, don't burden your site with these perceptions. Tracking and measuring your site's speed are an important component of the mix. If you can't afford to buy into continuous services such as Keynote Systems or Gomez, find sites to test your site speed for free or on an ad-hoc basis.

For small businesses, the price of light may not be the actual price you need to pay for data services but rather the time you need to spend managing, interpreting, and understanding the data you can get. In this competitive environment, doesn't it make sense to work smarter?

Apps Us Marketers Can't Live Without

Here at VerticalResponse we have roughly 70% of all employees using Apple computers. Our engineering department refuses to use anything else, and our latest convert was our Vice President of Product Management, Josh, who is on the latest Macbook Pro - where if he really needs to, he can run Windows.

As a side note, check out one of our customers, Due Maternity, talking about us on the Apple website.

We love our Macs and we love web-based software (after all, our product is web-based). I figured I'd share some Apple-specific software that works for us and web-based software that anyone can use. I've asked Alf, our Director of Marcom, and Ivan, our Web Producer, to weigh in on what they like too.

Janine's Picks

	Typepad - Online tool for blogging. I use it to publish this blog - it's about $5/month and totally easy to use.
	Salesforce.com - Online CRM tool for managing contacts and marketing to them. You can use VR from within this application. It has a few limitations with a Mac but still worth it! Just $95/month or $65/month depending on your flavor. The best part? You can use VerticalResponse right from within you salesforce account, then when someone clicks or opens your email, it is reported right back into the lead record. Booyah!
	FileMaker - Software to customize and store your database if you aren't into the online thing like Salesforce.com. $299 for the product, and you can totally customize your database.
	NewsGator - This is a great online tool for tracking keywords that appear on blogs and in the online world. We use it to see who is talking about us, and better yet, who is talking about our competition. You can really track where your press releases are being picked up more or less, real-time. I think we pay about $15/month.

Alf's Picks

	Firefox Extensions - Alone, Firefox is a great browser, but add the treasure trove of extentions available, and it becomes an invaluable tool for marketers and developers alike. On the marketing side, one of my favorites is SearchStatus, it shows me the Google PageRank & Alexa Rank for any page I browse right in my status bar and lets me instantly check a page's keyword density, backlinks & indexed pages in a variety of search engines (among a few other goodies). On the development side Web Developer is da bomb, I know there's been a lot of buzz about FireBug (I have that one installed too) with all its Web 2oh AJAXy Goodness, but my loyalty is still with Web Developer ... it's just too useful.
	Apple Keynote (Mac Only) - Them special effects is fantastic. Mac only (you can save to ppt for pc but why?) presentations & slide shows, this app kicks PowerPoint's *#$%. We use it to create the big-screen product presentaions for our trade show booth, and it's as easy as pie to use. Sync it up to a playlist in your iTunes library...click... and you have yourself an instant soundtrack, Rock On! Don't beleve me? Visit us at a tradeshow and see for yourself.
	OmniOutliner (Mac Only) - When I need to structure my thoughts on various marketing projects, I find OmniOutliner from the Omni Group to be the simplest hierarchical outlining app around. You can organize almost anything with this app, complex road maps, or simple to-do list. Its super flexibility and scriptability make it an irreplaceable tool. Can't wait to get my hands on Omni's sister app OmniPlan once its out of beta.

Ivan's Picks

	QuickSilver (Mac Only) - Remember the LiveStrong bracelet at the apex of its popularity? Being marginally tech-savvy and not having this installed on your Apple is like forgetting to wear your LiveStrong bracelet in 2004. If you are fond of keyboard shortcuts, this is the app for you. Despite its overbearing trendiness, it turns out there is reason it fosters zealotry among its users - if you take the time to learn it, it really speeds up your workflow while simultaneously impressing your haughty, hipster friends.
	NetNewsWire (Mac Only) - Just about every site these days has a news feed you can subscribe to, and this gem for OS X is the best way to manage those news feed subscriptions. Subscribe to all your competitor's feeds, industry blogs and publications. Become one with your business' marketplace. There is a free version (NetNewsWire Lite) and one you can purchase ($29.95). The paid version integrates into your NewsGator account, allowing you to synchronize your feed subscriptions across multiple computers, and even access them through a web browser if you are jonesing for an information fix.
	Basecamp - This web-based application is a great tool to manage your ongoing projects, streamline communication and enhance collaboration within a team. It came quite in handy when we were re-designing our website and needed to keep track of the seemingly-endless task list. If you're an Apple user, you can also integrate Basecamp into your dashboard with either the Telescope or the Basecamp widget.

Got any applications your marketing can't live without? Comment and tell everyone!

Brand equity

Brand equity can be defined in many different ways. I have developed a simple, yet powerful, definition of brand equity. For a brand to be strong it must accomplish two things over time: retain current customers and attract new ones. To the extent a brand does these things well, it grows stronger versus competition, and delivers more profits to its owners.

Breaking down the definition of "brand equity" into its two components, we can more easily determine a reliable way to measure brand equity, and to track changes in brand equity over time. The components of brand equity, retention and attraction of customers, stem from people's experiences with and perceptions of a brand.

The ability to retain customers is largely experiential. High equity brands exhibit stronger levels of customer satisfaction and loyalty. History has shown that consumers will continue to buy a brand that offers them "their money's worth."

The ability to attract new customers is largely perceptual. Because customers do not have actual brand experience, they must go by what they hear, see and believe about a brand. The two primary ways the market receives this information is through messages controlled by marketing, such as advertising and PR efforts, as well as uncontrolled messages such as press stories and "word of mouth."

Scott White is President of Brand Identity Guru a leading Corporate Branding and Branding Research firm in Boston, MA.

Brand Identity Guru specializes in creating corporate and product brands that increase sales, market share, customer loyalty, and brand valuation.

This Article may be freely copied as long as it is not modified and this resource box accompanies the article, together with working hyperlinks.

Over the course of his 15-year branding career, Scott White has worked in a wide variety of industries: high-tech, manufacturing, computer hardware and software, telecommunications, banking, restaurants, fashion, healthcare, Internet, retail, and service businesses, as well as numerous non-profit organizations.

Brand Identity Guru clients include: Sun Life Financial, Coca Cola, HP, Sun, Nordstrom, American Federal Mortgage, Franklin Sports and many others, including numerous emerging growth companies.

Article Source: http://EzineArticles.com/?expert=Scott_D._White

Mini tutorial on SpamAssassin

Here’s a selected list of just a few of the hundreds of terms blocked by SpamAssassin, the most widely used network-level filter.

(Note: SpamAssassin uses open-source technology aimed at UNIX systems. My non-techie interpretation of this is that network administrators can configure SpamAssassin however they want.)

Some common trigger words or phrases:

- subject line starts with “free”

- subject contains FREE in all caps

- the word “free” in certain phrases (free offer, free leads, free access, free preview)

- certain words like “guarantee” in all caps

- words like “unsubscribe,” “leave,” and other list removal phrases

- using font sizes that are 2 + or bigger

- background in an HTML email that isn’t white

- HTML font color is gray, red, yellow, green, blue, magenta or “unknown to us”

- claims compliance with spam regulations or with US Senate Bill 1618 or House Bill 4176

- urges you to call now or claims you can be removed from the list

- the phrases: what are you waiting for, while supplies last, while you sleep

- asks you to click below

- uses a Nigerian scam key phrase such as “million dollars”

- money back guarantee

Eegads...

How can you avoid all of these? The answer is you don’t have to. SpamAssassin uses a rules-based system to filter mail headers and body text.

Basically, it’s a point system that assigns positive (it’s spam) or negative (it’s not spam) scores to a long list of trigger words, phrases and message headers. You have to reach a certain total before your email message is classified as spam and diverted.

If you’re accumulating negative as well as positive points, you may be under the threshold. For example, using the phrase “if only it were that easy” assigns you +2.0 points. “Free preview” gives you +1.7 points while “free trial” gives you only +0.1.

KFI’s: Key Forecast Indicators

As I said in my presentation at the eMetrics / Marketing Optimization Summit, if you want to get C-Level people to start paying attention to web analytics, you have to get into the business of predicting / forecasting. Let’s face it, KPI’s are about the past, right? You don’t know “Performance” until it has already happened.

But C-folks don’t really care much about what has already happened, because they can’t do anything about it. What they really want to know is what you think will happen. For example, ideas like “sales pipeline” - a forecast. If you start forecasting - and you are right - you will get attention from the C-folks pronto. The web is a great forecasting tool because it’s so frictionless; it tends to provide tangible signals before many other parts of the business.

So: Do you have any KFI’s - Key Forecast Indicators?

I have one for the Lab Store, and it tripped about 2 months ago. It’s the Unwanted Exotic Index (UEI).

As part of the Lab Store, we run a moderated board where people who want to give up exotic pets can post the availability, and people looking for exotic pets can post requests. Typically, the ratio of people giving them up to wanting them is about .25 - for every post looking to give an exotic up, there are 4 posts looking to adopt.

A couple of months ago, this ratio starts popping higher. A couple of weeks ago it hit 1.25 - for every 5 posts looking to give up an exotic there were 4 posts looking to adopt. The last time something like this happened was prior to the mini-recession of 2004, when the Unwanted Exotic Index tagged 1.0 for a short time. After this happened, our sales got soft about 2 - 3 months later.

Why is the UEI predictive? Let’s go through the logic - my logic, anyway!

Keeping certain types of exotic animals can be a strain on a family, both from a time and money perspective. They can be high maintenance. On the margin, as the economy gets tougher and people look to manage household budgets, these pets can get some scrutiny - particularly if kids have lost interest or gone off to college. So more go up for adoption. At the same time, requests to adopt fall, as families who might have considered an exotic pet put the “owning decision” on hold. Taken together, these decisions cause the UEI to spike higher. Both giving up and deciding not to own exotic pets affects Lab Store revenues “expected” in the future. So the UEI ends up being predictive of future demand.

Makes sense to me.

Now, I’m a pretty good student of macroeconomics and pay attention to many economic indicators, especially predictive ones like the ECRI’s US Weekly Leading Index. If you’re an analyst, you should too; economic indicators provide context for any analysis you might have to do, and clients often want to understand the impact of these external issues on their business.

As far as the Lab Store specifically, I don’t usually pay much attention to the macroeconomic cycles. The pet business tends to be insensitive to the economic cycle; people don’t stop caring for pets as the economy wobbles up and down. That’s why it’s such a good business - if you can find a niche. So I don’t get too concerned when I see these predictive macroeconomic indexes forecasting a slowing economy.

However, what we have here with our Unwanted Exotic Index is a confirmation of the broader economic forecasting tools that is specific to our exotic pet business. That makes me sit up and take notice! Looks like our business is setting up for a repeat of the 2004 slowdown - the last time the UEI spiked like this. Why is this important? Because I can do something with this knowledge. I can re-allocate and re-prioritize based on this knowledge. For example, I can move from a “grow bigger” to a “grow smarter” mode.

And please note: this KFI has nothing to do with traffic or sales on the web site; traffic and sales are “rear view”. By the time you see the sales slow down it will be too late to do anything about it. And that’s why the C-folks don’t care much about web analytics reports.

You could track an index like the UEI with a web analytics tool, but you’d have to come up with the idea first. My point is you will probably have to look outside the usual “rear view” metrics to find one with forecasting ability. I caution you not to substitute a “survey” for a predictive model; people’s opinions are a notoriously lagging indicator. You’ll be up to your ears in the slowdown before people start turning bearish.

So: Do you have any KFI’s - Key Forecast Indicators? Tell us about them.

If you don’t have any KFI’s, now is the time to start looking for them. What can you see now that predicts what will happen in the future? Think about the business, think about the data sources, and put together a bunch of different ideas. Track them back a couple of years and post them monthly going forward. You’re bound to find something predictive. Perhaps something about posting, like the UEI. Recommendations / comments as a percent of visitors or something like that.

If you’re stuck, start with a simple “engagement” idea - percent visitors / members / customers who visited / logged in / bought in the past 90 days. If this percentage is falling, so will your business in the next 3 - 6 months. If your business has a lot of seasonality in it, look to year-over-year comps of the same metric.

If you’ve never played this game before, you won’t have proof your KFI’s work until after the business is in the soup, but you’ll be ready with accurate and actionable KFI’s the next time around!

Stand and Deliver

If the Brady Bunch taught us anything about public speaking, it's that you should always imagine your audience in their underwear. Okay. So there you are, up at the podium, nothing but bras and boxers as far as the eye can see. Now what?

Social media expert Chris Brogan has some ideas about what to do next:

• Lead with humor. You have two minutes to make your audience love you. Skip boring preambles and corny jokes. Win them over with a funny story highlighting your keen sense of self-deprecation.
• Follow up with a question. But not because you want an answer—no, your goal is to get everyone thinking about themselves. "I want you to be connected and engaged to what I'm saying," writes Brogan. "If I'm getting you to stir up internal memories, I've snuck in." Clever, huh?
• Go for a walk. Unless you're saddled with a fixed microphone, interact with the audience by moving around. No fidgeting.
• Speak like a broadcaster. Vary your volume, stick to short statements and pause once in a while. Banish um and uh from your vocabulary unless you want to put your audience to sleep.
• End with an "idea handle." Give your audience an idea they can implement as soon as they leave. They've given you their time—make it worth their while.

Chris Brogan's savvy approach to public speaking gets your audience thinking about how your ideas impact their lives—that's Marketing Inspiration.

See the full article at Chris Brogan's site.

MP 'Classic Truths': If You Don't Measure, You Can't Manage: The Best Metrics for Managing Marketing Performance

by Laura Patterson

Without metrics to track performance, marketing and business plans are ineffective.

Businesses need to know which success factors require measuring, and they must understand the differences between measurements (the raw outcomes of quantification), metrics (ideal standards for measurement), and benchmarks (the standards by which all others are measured).

For marketers, three primary metrics constitute a starting point for tracking their performance. Once companies are aware of their competitive position, their desired outcomes, and what it will take to achieve those outcomes, companies will be better able to identify the success factors, benchmarks, and appropriate metrics to meet their target.

Why Measure?

Metrics are a part of our everyday lives: from our heart rate, to our bank balances; from our weight, to the gas mileage on our cars. If we don't pay attention to these numbers, we create a risk for getting a heart attack, being overdrawn, or running out of gas.

The same is true in the business environment. If a company doesn't identify and track important performance measures, it increases its risks.

Metrics provide a means to assess progress; they provide valuable data points against which the marketing organization can track its progress. Metrics demonstrate accountability and allow marketers to better know, act upon, align efforts, and reduce market exposure. Metrics enable the marketing organization to truly serve as the eyes and ears of the company.

And, more importantly, establishing and tracking metrics will have a positive influence on the leadership's satisfaction with Marketing and the marketer's ability to secure funds. Only 38% of US executives say their companies are now measuring the results of their marketing efforts, according to a study of senior business executives conducted in the second quarter of 2004 by Blackfriar.

Will measurement actually change investment in Marketing? Blackfriar compared planned marketing spending for companies that measure marketing with those that don't. The result? Firms that measure marketing planned to spend an average of 41% of their annual marketing budgets during the second quarter. Those that don't measure planned to spend only 33%; apparently, they felt more comfortable planning to spend their marketing dollars than those that don't measure.

Measuring marketing also has an impact on the satisfaction of senior executives regarding their investment in Marketing. Some 16% of executives at companies that measure marketing said they were dissatisfied with their marketing efforts. But at firms that don't measure marketing, 28% said they were dissatisfied.

The simple act of measuring marketing results reduced the dissatisfaction of senior executives significantly. In other words, measurement allowed Marketing to prove its worth.

Defining Metrics

The world of metrics can be confusing for people new to these concepts. To better understand metrics and how they work, several terms must be defined:

• Measurements are the raw outcome of a quantification process, such as a company's numbers, ratios, and percentages.
• Metrics are the standards for measurement, providing target values that a company must achieve to reach a certain level of success.
• Benchmarks are the best measurements to aspire to, the standard by which all others are measured. Companies that set benchmarks in their industries are the ones often lauded in "Top Ten" and "Most Admired" lists and articles.

A good example of a marketing benchmark can be traced back to the early 1990s. Over a decade ago, market research firm IntelliQuest (now Millward Brown IntelliQuest) conducted a customer satisfaction research study for the personal computing industry.

The firm spoke to customers who rated the companies in the industry, which resulted in a measurement on a one-to-nine scale. It then learned that 84% of users who rated their satisfaction as a seven, an eight, or a nine would consider the same brand for their next purchase. Seven, eight, or nine became the metrics that companies aspired to attain. The benchmark was nine.

Three Metrics Gauges

To determine which success factors to measure and the appropriate metrics for each, marketers must have a clear understanding of the company's goals. A young company looking to gain traction in the market is focused on factors different from those of a more established company wanting to improve its customer relationships.

For those beginning to use metrics, listed below are four key performance indicators that support three metrics gauges: market share, lifetime value, and brand equity.

These gauges are directly linked to the three specific performance areas that Marketing can impact: acquisition, penetration, and monetization.

The first responsibility of Marketing is to identify and enable the organization to acquire customers, without whom there is no revenue, without which there is no business. Acquisition enables the company to increase its market share.

Although Marketing may not close the deal, marketing strategies move the customer through the buying process, from awareness to consideration. Four key performance indicators enable you to address market share:

1. Customer growth rate
2. Share of preference
3. Share of voice
4. Share of distribution

The second responsibility of Marketing is to keep the customers that the company acquires and increase the value of those customers. It is expensive and ultimately disastrous to have customers coming in one door only to go out another. High customer churn signals a variety of problems and hinders your ability to create leverage.

The following performance indicators will help your drive these penetration-related metrics:

1. Frequency and recency of purchase
2. Share of wallet
3. Purchase value growth rate
4. Customer tenure
5. Customer loyalty and advocacy

The third responsibility of Marketing is monetization. Up until the 1970s, a company's value was determined by its book value. Over time, intangible assets, such as a company's intellectual property, customer value, franchises, goodwill, and so on have had an increasing effect on a company's market value.

Marketing professionals can improve the market value of their company by improving their performance in four key areas:

1. Price premium
2. Customer franchise value
3. Rate of new product acceptance
4. Net advocate score

A recently published report, "Measures + Metrics: Assessing Marketing Value + Impact," by Glazier, Nelson and O'Sullivan, corroborates these gauges and performance metrics. In their report for the CMO Council, the authors specified four performance metrics:

1. Business acquisition/demand generation, which can include such metrics as market share gains, lead acquisition and deal flow
2. Product innovation/acceptance, which can include market adoption rates, user attachment and affinity, loyalty and word-of-mouth
3. Corporate image and brand identity, which can include growth in brand value and financial equity, awareness and retention of employees
4. Corporate vision and leadership, which can include share of voice and discussion, retention and relevance of messaging, and tonality of coverage

Regardless of which model companies choose to deploy, to fully capitalize on the benefits of metrics they should consider establishing a continuous process in which metrics are collected, analyzed, and reported on a regular basis.

Over time, metrics can reveal valuable information about which marketing tactics are most effective, what types of prospects are most likely to buy, which customers are most profitable, and how the market in general develops over time.

Also important to remember is that metrics themselves can change over time. As the market and the company evolve, marketers must diligently review and adjust their metrics.

Innovative competitors will continue to set higher benchmarks, ratcheting up the acceptable range of metrics. The airline industry's 45-minute airplane turnaround time was considered standard until Southwest Airlines decided to do it in 15 minutes. Some metrics may become outdated, and newer metrics and methods of measurement will require attention.

To work without metrics is to work blindly. A lack of metrics makes it extremely difficult to assess whether a course of action is working or needs adjustment. The proper use of metrics can provide guidance to help a company expand market position, lower costs, and retain the best customers so that the company can ultimately set the benchmarks in its industry.

Note: This MarketingProfs "Classic Truths" article was first published on November 23, 2004.

Laura Patterson (laurap@visionedgemarketing.com) is president and founder of VisionEdge Marketing, Inc. (www.visionedgemarketing.com) and author of Measure What Matters: Reconnecting Marketing to Business Goals and Gone Fishin': A Guide to Finding, Keeping, and Growing Profitable customers.

Published on October 23, 2007