Increasing Web sales through data analysis

May 01, 2000 9:30 PM  By

If you want to increase your ‘Net sales, you need a solid reporting system that provides you with specific details about your users’ behavior – information that’s critical to your online success. Collecting and analyzing the right data can help you better merchandise your products based on users’ browsing patterns, track the effectiveness of both online and offline campaigns, and refine your overall Web marketing strategy.

Let’s take a look at the types of reports that can be generated from your Website – and, more important, how to use those reports to improve sales and your users’ overall experience.

Traffic reporting

Traffic reporting is the most basic form of Web reporting. Also referred to as hit reporting, it compiles data each time a user makes a move on your site, and stores the information in a log file. The problem with log files is that most of the information is stored in formats that are hard to understand, so their use is limited. A traffic report makes more of this information accessible by reading and summarizing the log file.

The most useful information generated from traffic reports includes a count of visitors, views, and hits. Visitors are just that: users who visit your site. Views are the number of separate pages that are delivered, and hits are the number of files that are downloaded from your Website, including all text files and graphic files. So one customer who looked at 10 pages, each of which contained five files, would show up on the report as one visitor, 10 views, and 50 hits.

Another handy piece of information contained in log files is the referral URL – the name of the site each user just came from. With this information, you can determine which search engines are driving traffic to your site and identify potential partners or affiliates. Traffic reporting is also useful for gauging traffic flow and server load, which network administrators need to determine peak usage.

The one important component missing from traffic reporting is actual user information. Traffic reporting does log information for each user, but it does not give you any personal data about that user, such as name or e-mail address.

A number of software programs can analyze your site traffic, producing literally hundreds of reports. The most popular software system is WebTrends, which you can buy for less than $500. NetAnalysis 4.5 from NetGenesis is considered one of the most advanced traffic reporting systems available, but it is also fairly pricey, starting at $20,000.

Sales reporting

Imagine the enormous amounts of data you would be able to collect if you could watch over the shoulders of each customer as he or she browsed through your printed catalog. Using Web-based reporting, you can pretty much do that as customers browse your online catalog. Sales reporting can be used to learn more about your customers, which will allow you to better merchandise your products on the Website. Let’s take a look at some of the types of sales reporting:

- Postsales reporting. The most basic form of reporting, this provides you with sales data broken down by day, product, top sellers, and a number of other criteria. Your Web reporting should be able to provide you with up-to-the-minute sales information.

- Inventory reporting. Because most catalogers and retailers manage their inventory with a fulfillment/distribution system separate from the Website, inventory reporting is typically best handled from your back-end system. Since the Web is a real-time environment, and inventory is continually changing, you can get only a snapshot of the status at the time you run the report.

- Conversion reporting. One of the hidden gems of the Web, conversion reporting correlates the number of browsers for a specific product or group of products to the actual number of sales. This is also known as a browse-to-buy ratio. Combined with sales information, conversion reporting can give you critical data on the effectiveness of your products.

For example, if a certain product doesn’t seem to be selling even though a large number of users are viewing the product page, this might indicate that you need to change the copy or product image. Conversion reporting will also isolate and report on the number of people coming to each product page and how long they are staying. Going one step further, you can report on conversions by category to see which ones are performing most effectively.

- Path-to-purchase reporting. This report can provide you with an analysis of the most effective path that users take to make a purchase from you. It can tell you how a particular group of users found a product – via search, drill down, direct link functions, and the like. It can also indicate if users are making purchases that are stimulated by cross-selling or upselling. When these data are aggregated and trends are established, this report can provide you with valuable insight as to what directs your Website users to specific areas and then what makes them purchase.

- Cross-sell reporting. This report will help you determine the effectiveness of the cross-selling activities on your site by showing the relationship between each product and how the various cross-sells performed. The report should provide you with statistics on the number of click-throughs, as well as the number of purchases stimulated by the cross-sell.

- Tool-usage reporting. In addition to the standard ways that users access product information and make purchases, your Website may have a number of other tools to assist the customer. Some of these tools include quick catalog order, gift search, advanced searching, gift registry/wish list, and reminder service. You must determine sales that relate to those tools so that you can gauge the effectiveness of each tool. You may then conclude from this analysis that users ignore certain tools, which you would then probably remove from the site.

- Abandoned-cart reporting. This report allows you to determine the percentage by day or time period of users who leave your site with something still left in their shopping cart. An abandoned-cart ratio of more than 66% indicates that something is wrong on your site.

Content reporting

Many marketers overlook the value of effective content on the site. Types of content include articles, frequently asked questions (FAQs), customer stories, and customer service areas. Effectively using content can dramatically boost sales. The reporting system should be able to tell you not only how many people viewed each piece of content, but also how specific content led to sales. If your content is set up so that it links users to products, you will be able to calculate browse-to-buy ratios for each piece of content on your site.

Campaign reporting

Campaign reporting is probably the most important type of reporting available online. It’s also very similar to campaign reporting offline. For it to work, however, every Web-based promotional activity must be tracked via a source code that is embedded into the Internet address of your specific promotion pages.

Suppose you want to send an e-mail campaign to your premium customers. Within the e-mail, you invite customers back to your site with a hyperlink that contains a source code. When each customer clicks back to the site with that code, your software takes note and stores the click-through in a transaction file.

You can also use the Web to report on your offline campaigns. One method to use in print, TV, and radio campaigns is to provide a modified Website address such as www.yourstore.com/specials, which can be picked up by the site and connected to the customer record or sales transaction record. The modified address acts just like a source code and allows your reporting system to compile the same type of information.A word of cautionWhen setting up your reporting system, it is important to consider how running these reports will affect server performance. Generating reports directly from your Web server (the same one that your users are accessing) can be a huge drain on your resources – and even bring your site to a screeching halt.

There are two ways around this. First, have your Web developer or IS group set up a separate server that is used only for reporting. Second, export your Web sales information each night and save it to a local computer. From there you can use a report writer such as Microsoft Access or Crystal Reports, which are both popular software packages, to report on the data offline.

Effective reporting systems are the perfect feedback mechanism. Your Web customers tell you a lot simply by clicking through your Website. By capturing and analyzing the data they provide, you can increase sales, more effectively merchandise your product line, make necessary structural changes to your site, and better serve your customers all around.