Understanding the Impact of Seasonality

  |  December 30, 2008   |  Comments

Approaches to monitoring seasonal trends that affect business.

When we all look at trends of traffic and different behaviors (conversion, etc.) on our sites, there are obviously some key performance indicators we want to increase such as conversion rate. And there are some we want to decrease such as bounce rate on search or media.

One factor often overlooked: the power of seasonality. To be fair, every large retailer understands this intimately. We've all heard of Black Friday, which is make or break time for many retailers to move out of the red into the black for the year. But seasonality often has a significant impact on businesses outside of online retail commerce.

Look at your Web analytics tracking tool. You can compare this year versus last year or a specific week or month to the previous one. You must be careful in doing so. For instance, if you make changes to improve tracking throughout the year, it could become difficult to perform a year-to-year or apples-to-apples comparison.

You may want to see trends for an entire industry or category. You can of course subscribe to competitive data services such as Compete, HitWise, comScore, and others.

Another great (and free) tool to get the highest level view is Google Trends . This tool will allow you to see relative search volume over time for nearly any term, assuming it has decent search traffic.

Let's look at a few examples:

  • Gym membership: In the first example you can see an upward trend over the past few years. If you work for a large gym chain and your traffic has been going down over time, you probably have some work to do. But the bigger story in the review of "gym membership" is the significant seasonal lift around the holidays and first of the year. This makes sense as people become more weight and health conscious around the holidays and set resolutions around the first of the year. So you should be expecting that lift as well as a possible small lift toward summer's end.

  • Mortgages: Surely, this year in mortgages is different than recent years with everything happening in the credit and finance markets trickling down. You can see a trend in each of the past few years of interest dropping off in the fourth quarter or the second portion of the third quarter.

  • Customer relationship management: Looking at a term typically used in business-to-business such as customer relationship management (CRM), we can see it also displays a seasonal trend with a dip toward year's end. As expected, the business world slows after Thanksgiving and nearly stops toward the end of December. But there is also a bit of a dip in the summer.

  • 24 hour fitness: This looks at a niche within an industry. Obviously "24 hour fitness" falls under "gym membership." Searches or interest in "24 hour fitness" seem to follow nearly the exact pattern as "gym membership."

Now we should be careful of treating search traffic as the same as site traffic. It is obviously different but still a solid indication of interest.

So why does this matter?

  • Forecasting: When forecasting traffic, conversions, etc., understand past years' performance and overall industry performance can help you in monthly forecasting.

  • Avoiding fire drills: If you know that a certain time is always down, you can prep people for it so you don't get the call that something is wrong on December 28 because traffic is way down. This is an obvious one, while others may not be so obvious.

  • Comparing to others in the same industry: If you are trending down and the rest of the industry is trending up, you have some work to do.

Does seasonality have a significant impact on your business? Are you comparing this year to last year within your Web analytics tool or using competitive data providers? If not, spend some time digging in and identifying opportunities.

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Jason Burby

As President of the Americas at POSSIBLE, Jason is responsible for leading the long-term stability and growth of the region. With more than 20 years experience in digital strategy, he is a long-time advocate of using data to inform digital strategies to help clients attract, convert, and retain customers. Jason supports POSSIBLE's clients and employees in driving new engagements and delivering great work that works. He is the co-author of Actionable Web Analytics: Using Data to Make Smart Business Decisions.

Follow him on Twitter @JasonBurby.

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