Every online business should set up proper analytics and monitor the entire online marketing funnel. A healthy online marketing funnel consists of three distinct phases: Acquisition, Conversion, and Retention.
The Connected Funnel Phases
The three phases are interconnected. If your site traffic has always been relatively much lower than that of your competitors’, you’ve either not invested sufficiently in your different online marketing channels or your online marketing isn’t operating efficiently. Then you aren’t going to have many loyal customers to work with at the retention phase and aren’t going to see enough conversions at the conversion phase. Too little data collected in the conversion phase means you don’t have enough data required for you to make good business decisions.
If your website receives tons of visitors every day but the conversion rate is much lower than that of your competitors’, then either the visitors you’re acquiring from the online marketing channels aren’t the suitable customers to your website or products, or your website design has a problem leading the visitors to conversions (or key actions).
If a very high percentage of your customers aren’t repeat customers, then the effort and financial cost put into your online marketing channels will have to increase, to make up the ineffectiveness of the retention phase.
When visitors (or users) arrive from different online marketing channels on to your website.
Input: Online marketing acquisition channels or methods.
Output: Visitors (or users) to your website.
Examples of online marketing acquisition channels or methods may include:
Let’s use Agoda, an Asian online travel agency website, as an example for the acquisition phase:
Users find the Agoda website through Agoda’s ads on Baidu Web search -- aid search text ad on the left side and the display ad on the right side.
Daodao, TripAdvisor’s online travel search engine and hotel review site in China, compares prices of a specific hotel that are available on different online travel agency websites. This is another online channel in which a user can reach the Agoda site.
The conversion phase starts with visitors that are already on your website (or web pages) but haven’t yet decided what actions to take next.
Input: Visitors (or users) that are already on one of your web pages.
Output: Visitors complete some key actions (or conversions) on your website. Key actions may include lead form submission, product purchase, etc.
Example: The completion of the conversion phase starts with this hotel booking submission form on Agoda. Once the user completes filling this form, then she completes her hotel booking process.
How a website keeps its customers for repeat business.
Input: Customers that have made only one single conversion on your website.
Output: Loyal customers that have already made more than one conversion on your website.
Methods to retain customers include:
Example: A user that previously made hotel bookings on Ctrip.com (another online travel website focusing on the Chinese market) receives a newsletter with recommended hotels.
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Gordon Choi has paid search experience in Google AdWords and Baidu since 2003; Yahoo/Bing since 2002 and SEO and web analytics experience since 2005 across China, Asia, U.S., U.K. and Australian markets. He gathered China Internet experience through working in-house at Ctrip.com and Alibaba.com and now specializes in setting up SEM/SEO strategies, managing online campaign operations, and implementing web analytics solutions for clients.
March 19, 2014