There are many ways to track success in your marketing efforts, but the most important tool is through the use of analytics. To properly and effectively use analytics you must understand how to properly decipher your data, and understand what story it's telling, to help you make informed decisions rooted in real data. Below we have outlined how you analyze your data and start to understand what factors are influencing your site traffic and sales.
What is Analytics?
Analytics is the tracking of data to discover any common patterns within your data set. Analytics helps to build a story out of your data, to allows for deeper insights you might not have detected before. With the proper use of analytics, you will be able to make effective decision making to encourage company growth and prosperity.
Why you need Analytics
Using analytical tools will help you frame your data in a way that allows you to understand the bahaviour of your customers, and allow you to make more informed decisions on what you should be spending your time and money on. This data showcases key information on who is or isn't interacting with your content. Data can also provide more information about your customers like their region, age group, and more!
Benefits from using analytics include but are not limited to:
- Efficiency and productivity
- Informed decision making
- Customer acquisition and retention
- Healthier financial budget
- Greater financial performance and budgeting
4 Types of Analytics
There are four types of data analytics that can play a role in how your company explores what your data reveals to drive company goals and objectives. These 4 types of analytics should be explored and discovered in the following order.
- Descriptive Analytics – Answer the questions of “What happened” on data from past events and a clear understanding of the overall company performance.
- Diagnostic Analytics – Focuses on data from the past to answer “Why” such as “why did our sales drop” or “why are we seeing an increase in customer retention”.
- Predictive Analytics – What is likely to happen next based off the historic data and help companies develop predictive analytics.
- Prescriptive Analytics – Where your data is leading your company into taking specific action.
How to Start Analyzing your Data
As you start to dip your toe into the world of Analytics - we suggest starting with the following two segments: Website Analytics and KPIs (key performance indicators).
Website Analytics
Web analytics are generated by gathering data about who is visiting your page, and how they are interacting with your site (including generating sales).
There are many tools and resources you can use to discover and collect this data. The most commonly used for its simplicity and cost (it's free!) is Google Analytics. By utilizing a platform like Google Analytics, you will start to understand insightful information like:
User Interaction: This highlights how people are interacting with your website, where they are going, and what buttons or links they click on.
High performing content: What is generating the most interaction on your site - this can help you understand what you're customers are looking for, or interested it. Creating similar content based off their likes/needs will help ensure your website stays relevant.
High traffic pages: What web pages on your site are receiving the most traffic indicating whether you should be optimizing your site based off customers' interest.
Customer behavior: how people interact with your site, where they go, and what they do with the information given.
New vs returning visitors: How many new or returning visitors you have on your site indicating if you have achieved customer retention.
Average time on page: This will track the average time users spend on your website indicating whether or not they enjoy your content. The longer they are on your pages, the more likely they are to be engaging!
Location: Where in the world are people accessing your page from. This data will help you decide if you want to generate location specific content.
Demographics: This data will showcase information based off age, gender, and interests or your website viewers/customers.
Bounce rate: This indicates the percentage of how many people visit your site and leave without interacting with anything. This may indicate you might need to rethink the content on your website if you have a high bounce rate.
Key Performance Indicators (KPI)
KPIs are used to measure a company's performance over a set period of time and support the company's strategy and focus on what's important. Once the data is analyzed, the results allows you to develop strategically within the company.
The importance of having tracking KPIs are as follows:
- Illustrates clearly if companies and teams' goals are being met
- Insight on success and failures to make adjustments
- Track employees progress and accountability
How to develop KPIs for your company
There are many types of KPIs that can help measure the performance and progress of your company over time. When trying to develop KPIs for your company consider the SMART criteria (specific, measurable, attainable, relevant, and time-bound). Once your SMART criteria is understood you can then focus on the most relevant and insightful data. The following are some examples of KPIs.
- Revenue growth
- Customer acquisition rate
- Profit margin
- Revenue per customer
- Customer retention rate
- Customer satisfaction
Analytics can seem daunting when you are just starting off the process of collecting data. Remember that there are many tools out there to help you through the process of understanding and deciphering the data being showcased to you. This data is meant to help elevate your company - it can seem like it is showing you poor stats, but it will help you with your decision making in what to spend more money and time on in the future. If you need help with understanding analytics BUMP is here to help you. Reach out to us and become a BUMP partner today!