March 2009 Archives
WHY YOU SHOULD SEGMENT YOUR VISITORS? (Google Analytics)
Some time ago Avinash Kaushik the web analytics Guru said: "Analyzing data in aggregate is a crime against humanity". No we're not talking about the last episode of Dexter but about the visitors to your website. Segmentation has become one of the most important thing you should do to understand traffic to your website and hence your business.
So why is visitor segmentation so important?
It is simply the breaking of your site visitors into groups and examining traffic and conversion data for those specific groups. Actually, in Google Analytics, you can perform advanced visitor segmentation and see the number of visits, the average number of pages viewed per visit, and conversion rates for different groups of visitors (example analysis of visitors from different locations).
Google Analytics provides a number of default segments like New, Returning, Paid and Non-Paid Visitors, Search, Direct and Referral Traffic. But you can also create your own custom segments. For example you could find yourself segmenting branded search vs non-branded search terms for organic and paid traffic. Why segmenting all these? Because looking at 'all' your figures that in average does not mean a lot. Figures like 'Average Time on Site' does not mean a lot since it is too broad. To find the real actionable insights we need to break our analytics data and split the various sources, behaviour, goals and outcomes. In brief we need to focus on the details as far as possible. Because trying to make strategic decision based on global data can simply lead our business to failure.
Ok, let's now really ask why we should segment our visitors and customers and think about the 'real' reasons for these.
In today's, highly competitive world successful companies realise that the nurturing of high-value, faithful, recurring, pleased and lucrative customers is the key solution for having long lasting profits and help the business stay afloat. In fact, I totally believe that it is imperative for organisations to properly identify their customers. No company can afford to offer the premier level of service to all its customers without really knowing who they are.
Therefore calculating the visitors' and customers' value to the company enable us to know better the different types of customers we have and therefore put us in a better position to allocate valuable resources to different types of visitors/customers. After discovery of those different customer classes we can approach different type of customers differently, like proposing appropriate products at appropriate prices for a particular segment.
For exemple: Advanced segmentation could let you see what are the web pages that are most visited by visitors who came on your site by typing brand keywords. And also what are the products that they bought?
Another common term 'Customer Differentiation' is in fact the segmentation of the high-value and high-potential customers but also the identification and separation of the least cost-effective customers. This process is important to know who the company want to serve, it involves the effort to understand what the customer really wants, what are the customers worth or potential. After discovering valuable information about customers we are is in a better position to give priority to the most profitable ones. We can also decide what to do with the least cost-effective customers.
For exemple: It is useful to discover who are the customers that purchased more than one items on your website, and/or who are the ones that purchased again. Then based on these figures we could deploy more effort to a particular 'segment' of our customers.
One way of differentiating customers is by establishing a baseline for the servicing cost of all customers. The segmentation of all customers should then be done to represent them in figures. After that we evaluate actual and strategic value of all the different types of customers (segments) and finally compare the customer value figures to the baseline established before and consequently make appropriate strategic decisions accordingly. The following graph shows an example of how customer segmentation, customer value and the servicing cost baseline can be represented for decision-making purposes.
Customers in the 'Tier 1' are actually the most valued customers with the highest actual and strategic value, they can be considered as the company's very important customers (VIP) and all effort must be made not to lose them.
Whereas the last group (tier 5) is well below the customer service cost baseline and has also a very low strategic value, appropriate decisions can then be made by managers concerning those customers classified under this group. For example: keep them with expectations that they can be more lucrative later or simply fire them?
As said by Brett Crosby, the Manager of Google Analytics : "Segmentation can help you perform better through an economic downturn and go with what works, find new ways to drive revenue, find the right segments, working for them and invest there to increase their conversions."
So why is visitor segmentation so important?It is simply the breaking of your site visitors into groups and examining traffic and conversion data for those specific groups. Actually, in Google Analytics, you can perform advanced visitor segmentation and see the number of visits, the average number of pages viewed per visit, and conversion rates for different groups of visitors (example analysis of visitors from different locations).
Google Analytics provides a number of default segments like New, Returning, Paid and Non-Paid Visitors, Search, Direct and Referral Traffic. But you can also create your own custom segments. For example you could find yourself segmenting branded search vs non-branded search terms for organic and paid traffic. Why segmenting all these? Because looking at 'all' your figures that in average does not mean a lot. Figures like 'Average Time on Site' does not mean a lot since it is too broad. To find the real actionable insights we need to break our analytics data and split the various sources, behaviour, goals and outcomes. In brief we need to focus on the details as far as possible. Because trying to make strategic decision based on global data can simply lead our business to failure.
Google Analytics Advanced Segments
Ok, let's now really ask why we should segment our visitors and customers and think about the 'real' reasons for these.In today's, highly competitive world successful companies realise that the nurturing of high-value, faithful, recurring, pleased and lucrative customers is the key solution for having long lasting profits and help the business stay afloat. In fact, I totally believe that it is imperative for organisations to properly identify their customers. No company can afford to offer the premier level of service to all its customers without really knowing who they are.
Therefore calculating the visitors' and customers' value to the company enable us to know better the different types of customers we have and therefore put us in a better position to allocate valuable resources to different types of visitors/customers. After discovery of those different customer classes we can approach different type of customers differently, like proposing appropriate products at appropriate prices for a particular segment.
For exemple: Advanced segmentation could let you see what are the web pages that are most visited by visitors who came on your site by typing brand keywords. And also what are the products that they bought?
Another common term 'Customer Differentiation' is in fact the segmentation of the high-value and high-potential customers but also the identification and separation of the least cost-effective customers. This process is important to know who the company want to serve, it involves the effort to understand what the customer really wants, what are the customers worth or potential. After discovering valuable information about customers we are is in a better position to give priority to the most profitable ones. We can also decide what to do with the least cost-effective customers.
For exemple: It is useful to discover who are the customers that purchased more than one items on your website, and/or who are the ones that purchased again. Then based on these figures we could deploy more effort to a particular 'segment' of our customers.
One way of differentiating customers is by establishing a baseline for the servicing cost of all customers. The segmentation of all customers should then be done to represent them in figures. After that we evaluate actual and strategic value of all the different types of customers (segments) and finally compare the customer value figures to the baseline established before and consequently make appropriate strategic decisions accordingly. The following graph shows an example of how customer segmentation, customer value and the servicing cost baseline can be represented for decision-making purposes.
Customer Differentiation
Customers in the 'Tier 1' are actually the most valued customers with the highest actual and strategic value, they can be considered as the company's very important customers (VIP) and all effort must be made not to lose them.Whereas the last group (tier 5) is well below the customer service cost baseline and has also a very low strategic value, appropriate decisions can then be made by managers concerning those customers classified under this group. For example: keep them with expectations that they can be more lucrative later or simply fire them?
As said by Brett Crosby, the Manager of Google Analytics : "Segmentation can help you perform better through an economic downturn and go with what works, find new ways to drive revenue, find the right segments, working for them and invest there to increase their conversions."
About the Latest Google Update (aka "Vince update") - as well as a Brief History of some of the Google Updates
Mid February this year people in the search industry spotted a change in how Google returned search results for certain types of keywords, a change giving "big brands" a push in Google search results. Following discussions on blogs and forums Matt Cutts (head of Google's Webspam team), on March 4th finally confirmed a change had been made. The update was dubbed the "Vince update" (no sorry, not a Vince Neil update)More on the "Vince update" later on and now a brief history of important updates of Google's search algorithm.
The "Florida Update"
On November 16th 2003 Google made a major update on their search algorithm. Named the "Florida update", it had a major effect for a very large number of websites at the time and came to change the course of search engine optimisation.
Aaron Wall from SEObook says: "The Google Florida update was the first update that made SEO complicated enough to where most people could not figure out how to do it. Before that update all you needed to do was buy and/or trade links with your target keyword in the link anchor text, and after enough repetition you stood a good chance of ranking."
Pre-Florida update prominent search engine ranking could be quite easily achieved by doing basic reciprocal link-building, on-page keyword stuffing, and using repetitive inbound anchor text in links.
Post-Florida update a huge number of pages, many of which had ranked at or near the top of the results for a very long time, simply disappeared from the search engine results altogether.
The "rel=nofollow tag Update"
In January 2005 Google contributed to changing the structure of the Internet when Google proposed a link rel=nofollow tag. Originally it was introduced to only stop blog spamming but was shortly afterwards also affecting link buying. In the eyes of Google you are considered a spammer, and risk getting penalised, if you were buying links without using rel=nofollow on them.
In a URL the tag looks like this: <a href="http://www.baseonesearch.co.uk" rel="nofollow">Base One Search</a>
Plenty of prominent websites have adopted the use of the nofollow tag, sites such as Wikipedia, Facebook, Flickr, YouTube and most blog platforms support the tag in the comments section.
"By adding rel="nofollow" to a hyperlink, a page indicates that the destination of that hyperlink SHOULD NOT be afforded any additional weight or ranking by user agents which perform link analysis upon web pages (e.g. search engines)." (http://microformats.org/wiki/rel-nofollow)
The "Universal Search Update"
In May 2007 Google launched their Universal search update. Universal search means that search engine results are blended with selected content from Google's "vertical search databases". The vertical search content is blended directly into the organic search results. Before the "Universal search" update Google gave a list of 10 text-based search engine results.
The "vertical search databases" Google blend into the organic search engine results are: News, Videos, Products, Maps, Images, Books & Blog posts
Today optimising your website for Universal search is important, (e.g. by adding alt-tags and keywords to your images, listing your business of Google Maps, creating videos and optimising title, description, tags etc.), you can increase your chances of achieving prominent search engine rankings.
The "Vince Update"
In October 2008 CEO of Google Eric Schmidt gave a hint of things to come, i.e. the "Vince update". In an interview he talked about "brands", he said:
"The internet is fast becoming a "cesspool" where false information thrives, Google CEO Eric Schmidt said yesterday. Speaking with an audience of magazine executives visiting the Google campus here as part of their annual industry conference, he said their brands were increasingly important signals that content can be trusted." He continued: "Brands are the solution, not the problem," Mr. Schmidt said. "Brands are how you sort out the cesspool." "Brand affinity is clearly hard wired," he said. "It is so fundamental to human existence that it's not going away. It must have a genetic component." (http://adage.com/mediaworks/article?article_id=131569)
The "Vince update" has caused a bit of outcry in the search community because with the update it's believed (and proven) that Google is now favouring brands/corporations for core category keywords. Aaron Wall from SEObook in his blog post proved changes had been made in the search engine results, evidence big brands getting favoured. An example is in mid-January three major US airlines all of a sudden began getting top rankings for "airline tickets" (see below)
(http://www.rankpulse.com/airline-tickets)
Addressing it as a "minor change", Matt Cutts says the change is about factoring trust more into the algorithm for more generic queries rather than pushing major brands to top search engine results.
So does this latest Google "update" - "minor change" mean that big brands/corporations can take a back seat and receive top search engine rankings in Google by default? I think not, the "Vince update" may well be just a minor change. Google is continually tuning its algorithms to give most relevant results for users.
For navigational-type searches (aka research queries, "going through the front door in the shopping centre") such as cars, airline tickets etc. brand/corporation sites are maybe what searchers are looking for? In the above illustrated example, shouldn't there be a couple of airline companies in the results when you search for airline tickets?
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