Metrics, Six Sigma, and Improved ROI

  |  November 21, 2003   |  Comments

You established metrics for your online marketing. You use metrics to track and report your efforts. Congratulations. Now what?

The need to move beyond simple metrics-tracking to manipulate and improve numbers is obvious. Six Sigma and other methodologies focus on not only measuring site activity but also understanding variables that affect metrics, and controlling and influencing the ones with the greatest effect on the bottom line. These are "levers."

Archimedes said, "Give me a lever long enough and a fulcrum on which to place it, and I shall move the world." We won't try to manipulate every single variable; nobody has the time or resources for that. Eliminate the guesswork from optimizing. Focus on those variables, or levers, that deliver the greatest impact. Focus on what's important first.

The law of the vital few is a model that says a small number of variables are behind the majority of effects (e.g., 20 percent of salespeople bring in 80 percent of revenue). Many things influence a Web site. Of a thousand or more variables, probably 15 to 25 have the greatest effect on outcome. Within this smaller group, variables can be similarly ranked to determine which should be manipulated first. They can then be addressed by priority.

Six Sigma provides a framework to determine and prioritize what's mission-critical. Underlying the approach is a structure that uses measurements before, during, and after site development. Six Sigma works for any area where problems can impact customer perception of quality. Most failures in getting a customer to convert (to a sale, lead, subscription, registration, etc.) stem from perception of lack of value, trust, confidence, security, or relevance.

What About the Other 98 Percent?

Six Sigma is an ideal, particularly in a service environment such as a Web site. The term literally means 3.4 or fewer errors per million opportunities (99.9997 percent accuracy). You're probably thinking, "That's not possible, or even applicable to conversion rates! I can't convert everyone!"

Don't get caught up in the number; it's not representative of the complete methodology. It's like a glass being half full or half empty. If we focus on an average 2 percent conversion rate, the best we'll get is incremental improvement.

To achieve outstanding results, look at things from the other side. What happened to the other 98 percent who left not yet ready to buy, intend to return, are still researching; or were disappointed or dissatisfied?

There are plenty of sites out there with conversion rates in the 10 to 40 percent range. Many more can convert 80 percent or more of their search engine traffic for specific key terms and optimized landing pages. Six Sigma is meant to drive sustained improvement in productivity, customer satisfaction, and loyalty to reduce cost and increase revenue and profit.

The Six Sigma Mindset

Start by uncovering critical issues while defining persuasion architecture. First, identify what's critical to your customer. Understand how well you're performing at meeting the customer's needs. Then, leverage the facts and data to drive improvement.

The Six Sigma mindset leads to projects being delivered on time, on budget, and on purpose. On time because it involves the right people; a clear charter; and strong sponsorship (at least a VP level) and follows a structured process. Key projects can be identified and implemented in a few weeks. On budget is self-explanatory. On purpose means it accomplishes stated goals.

Who uses Six Sigma processes in their marketing? Companies such as Dell, Microsoft, even midsize companies that don't want to waste precious resources experimenting and trying to figure out what will boost the bottom line.

The Pressure of Creative Tension

Numerous variables affect conversion. When using a methodical, disciplined approach such as Six Sigma, creative tension must be overcome. You can't subjectively quantify how persuasive copy or design is. What you say, how you say it, and how well you open up the information customers seek are critical to meeting customer needs and driving conversion.

There's been considerable discussion about metrics' role in Web site development and marketing. It's critical to meticulously track the work you do -- not just to demonstrate success but also to build a case for change and to manage more strategically.

Think Small for Big Results

Drive metrics to achieve goals by understanding, improving, and controlling the underlying variables. Whether you're a major corporation with millions of transactions or a small organization trying to squeeze every bit of results out of your efforts, tools such as Six Sigma can help improve operations. Don't let these tools seem complicated or even confusing. The Internet was foreign to all of us at one time. Now, it's integral to how we do business.

Every time visitors are persuaded to go one step deeper into their buying process, they complete a microconversion. Macroconversions (sales, leads, subscriptions) are easy to measure, unlike microconversions, which require careful architecting. Optimize the details correctly. The thousands of variables include subdisciplines, such as copywriting, design, usability, merchandizing, and brand.

ABOUT THE AUTHOR

Bryan Eisenberg

Bryan Eisenberg is co-founder and chief marketing officer (CMO) of IdealSpot. He is co-author of the Wall Street Journal, Amazon, BusinessWeek, and New York Times best-selling books Call to Action, Waiting For Your Cat to Bark?, and Always Be Testing, and Buyer Legends. Bryan is a keynote speaker and has keynoted conferences globally such as Gultaggen, Shop.org, Direct Marketing Association, MarketingSherpa, Econsultancy, Webcom, the Canadian Marketing Association, and others for the past 10 years. Bryan was named a winner of the Marketing Edge's Rising Stars Awards, recognized by eConsultancy members as one of the top 10 User Experience Gurus, selected as one of the inaugural iMedia Top 25 Marketers, and has been recognized as most influential in PPC, Social Selling, OmniChannel Retail. Bryan serves as an advisory board member of several venture capital backed companies such as Sightly, UserTesting, Monetate, ChatID, Nomi, and BazaarVoice. He works with his co-author and brother Jeffrey Eisenberg. You can find them at BryanEisenberg.com.

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