If you ask eCommerce professionals what role analtyics plays in their organization you’ll undoubtedly receive many answers that concern numbers, charts, and graphs. The Wikipedia community has defined web analytics as “the measurement, collection, analysis and reporting of internet data for purposes of understanding and optimizing web usage.” This is a good definition because it touches on a purpose of analytics as an optimization process.
But web analytics is so much more than numbers, charts, and graphs. It’s certainly useful for more than optimizing web usage. Web analytics has a role in the eCommerce organization because it is an activity that is useful for decision making.
Web analytics is story telling
At the end of analytics processes is story about your customers and/or your web site. The numbers, charts, and graphs paint a picture or tell a story about the what, when, why, how, and where of your customer’s actions and decisions. I like to think of my analytics reports as my daily newspaper or weekly magazine that tells me what is happening in the internet store.
Web analytics is fact mining
We don’t need to make decisions based on biases, perceptions, or opinions when we have web analytics data. It’s like digging in a mine and finding fact nuggets. Number of visitors, number of purchases, pages visited, time on the site, number of items purchased are just examples of undisputable facts. Those nuggets can be refined into decisions, so fill up your cart.
Web analytics is puzzle solving
Most people love a good puzzle. Our internet sites don’t disappoint with creating them either. Are people interested in that new product? How many customers purchase because free shipping is offered? How many customers abandon when they see a promotion code box? Why did sales for January increase over December? This list goes on and on. Web analytics more times than not, is able to solve these puzzles because it’s flexible for customization and can target specific data, down to the individual customer if necessary.
Web analytics is performance evaluation
How is the site performing year-over-year, quarter-over-quarter, or day-by-day? Web analytics is useful for analyzing data to create baselines and trendlines for key metrics. That becomes valuable to understand if the release implemented last night is negatively or positively effecting key metrics. It’s valuable to determine if the performance of the site this year increase or decreased over last year.
Web analytics is predictive modeling
The same trendlines used for performance evaluation of past events can also be used for predictive modeling useful in forecasting results. If there is a consistent acceptance rate of an add-on accessory to a certain product, you can forecast sales of that accessory. The number of product sales resulting from certain types of email campaigns help build a an inventory forecast for future email campaigns.
Web analytics is achieving relevance
Business decision making is about staying relevant to customers and relevancy to customers equates to business success and longevity. Making business decisions based on customer behavior is a contributing factoring to staying relevant. This may include what products to discontinue because of low interest, what products sell better with a discount, or even what the optimal price point is for a group of products. Knowing customers behaviors and choices is a must for staying relevant.
And finally, the real value of web analytics is in the web analyst
At the end of the day, numbers and data don’t automatically group together to form reports. It’s the web analyst that performs the magic. The web analyst is a craftsman with a tool. They create stories, they help solve problems, they evaluate releases, and forecast future results. Web analysts may not be the most visible role in your organization, but something tells me they like it that way. As Arthur O’Shaughnessy wrote in Ode
“We are the music makers, and we are the dreamers of dreams”
Make sure your staff has a good music maker. Everyone likes to dance.