Web experience depends on a wide range of variables that are more conflicting than complementing to each other. For instance; to drive content consumption we tend to place a greater number of links on a page, in turn getting more clicks and page view depth. However, this user behavior may not drive the highest contribution (revenue per user) value for the business, since page view inflation tends to diminish CPM rates from advertisers. For such hybrid models, which most websites tend to be, optimizing the website experience then becomes a science that can be tackled by applying portfolio planning mindset across the variables.
The chart below illustrates different variables that may influence portfolio analysis approach to website optimization - product, design and UI, marketing, partner metrics, etc. Each of the variables are critical for meeting consumer, industry and organization goals however, lack of both, a well-defined web strategy and a portfolio approach may result in poor investment decisions and diminished returns.
So how do we tackle the “portfolio of variables” for maximum return on our website investments (I am only going to speak to the internal metrics, not the ones controlled by external partners)? First of all, we need to define the goals and build the revenue model that is based on key variables and estimates the common measurable denominator - $$. Then we need to look at each variable as a part of the larger model and determine what site features are critical for their success, respectively. For instance, traffic into the site could depend on the promotion type, promotion source, etc. Once the user lands in the experience, it is the content, user interface, navigation, etc. that will drive user satisfaction. Finally, as the users leave the site, we need to ascertain that their needs were met – did they click out to make a purchase or a lead, did they find the content satisfactory, did the search results return what they were looking for, did the partner promotion lead them down the conversion funnel, etc.
We need to further define and understand what traffic sources (SEO, SEM , online promotions, etc.) work best for driving new users to the channel. Here a useful approach can be to determine the value of each traffic source which helps in optimizing the return on investment (here’s some more on this topic from an earlier post …. http://www.analyticsheaven.com/2010/04/higher-marketing-roi-with-traffic.html).
Alternatively, our business may need to focus on optimizing the value each user delivers to the business. In this case, we will need to focus on conversion metrics. How can we drive more ad revenue (if that’s or business model) by improving consumer engagement on the site and growing RELEVANT page views, which in turn, improves CPM revenue.
In other instance, our business model may need to be optimized for driving qualified traffic to our partners (read CPC and/or Lead Gen revenue). Here, the focus should be on measuring and refining search results, product details and description, research tools to facilitate purchase, design and user interface to encourage purchase, etc. The business model helps to quantify each of these metrics, either through single variable or multiple variable analyses.
Equipped with this level of detail, general managers can ask the right questions of the functional units (Design, Product, UI, Marketing, Sales) and drive focus on the critical areas for overall business success. The success achieved through such portfolio approach to business optimization is more manageable and highly sustainable, as operational efficiencies are achieved through clear focus and optimum resource allocation.
Your turn - would love to hear from the strategic planners and analysts on other lessons learnt!
