Nobody loves numbers more than your boss. Except his or her boss. Oh, and your boss’s boss too, unless you’ve already reached the top of the totem pole. Web analytics tools are at their most powerful when you can interpret and integrate the numbers they provide—the rapturous layers of percentages and pie charts—with what happens in the context of your organization’s business, outside the world of site visitor data. Did you get all that? In two recent SIGMA web analytics engagements, the key to the findings wasn’t was happening on page 27 of the site, or who was coming from Google. The key was to find the magic number—the value of what the online conversion or successful engagement meant to the company.
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The foundational concept of all database marketing is the Pareto Principle, that 80% of your sales and profitability will come from about 20% of your customers. When we have analyzed our clients’ customer bases to prove out this theory, we often find that the distribution is even more uneven– that 100% or more of customer profitability comes from an exceedingly small group—because clients are actually losing money from some part of their customer population. The 80/20 theory often holds true for product sales as well – 80% of sales often comes from just 20% of the products offered by a manufacturer. This concept has driven everything in database marketing from audience identification to campaign structure, sales strategy etc.
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