Cut through the Clutter, Part 3: Segmentation as a Superpower!
Published: October 23, 2015
Author: Leslie To
-There are limits to standard reporting – while it’s helpful for getting a 10,000ft. view of performance, it lacks the granularity for proper diagnostics
-Custom reporting is the best way to curate data that matters to you, your clients or your business. Focusing on key performance indicators and controlling for incrementality leaves us with a report that has both depth and purpose.
Next, we need to leverage segmentation so that we can find actionable insights. Personally, I think proper segmentation can be a superpower!
Segmentation in Google Analytics is quite robust; you can segment by demographics, technology, behavior, date of first session, traffic sources, ecommerce metrics, and even dictate sequences to create specific cohorts, and so much more. I like segmentation (as opposed to filtering) because I can reprocess data in real time and it doesn’t affect data collection permanently. It can also be applied historically so I can get a better grasp of past performance so my present-day analysis has context.
But today, I want to focus on segments built around dualities. By looking at mutually exclusive segments, we limit exception groups. In other words, I’m not going to have a large number of users who don’t qualify into one segment or another. This helps me understand my entire data set on a more holistic level. A user is either in group A or group B, no exceptions.
New Vs. Returning Users
A business thrives on growing two segments simultaneously: new users and retaining customers. Because consumption and conversion trends often differ between these two groups, we have to separate them from each other.
Let’s look at how revenue per user in these groups differs:
Right off the bat, you can see that returning organic visitors are valued at $4.58 compared to a $0.69 per new organic user. To be sure that this wasn’t just an organic trend, I took the liberty of comparing across all channels and found:
Not only are returning visitors more likely to spend, they are more likely to spend more money when they do. If this is a common trend, then why are so many SEO strategies focused solely on new customer acquisition instead of customer retention?
I often find, especially in new engagements with clients who’ve never worked with an SEO agency before, there is a heavy emphasis on new customer acquisition with almost no attention paid to retention efforts. Now, new user acquisition is really important to grow your site and brand, but it must coincide with retention efforts in order for your SEO strategy to succeed in the long term.
I’ll give you a second to absorb that thought while I move onto our next duality.
Converters vs. Non-converters
Every user whocomes to your site and doesn’t convert is a lost opportunity. Think back to all the time you invested in keyword research, keyword mapping, rewriting title tags & meta descriptions, and optimizing H1 tags and body content. All of that effort to improve search visibility with the end goal of driving more users to the site. What if they don’t convert? Was all that energy for naught?
It doesn’t have to be if we can understand why non-converters don’t convert. I broke up our client site into subsections based on URLs to see if I could find non-converter trends.
Search has a non-converting rate of about 58%, which isn’t too bad compared to the site average of 65%. That is still a really big number of people whodon’t provide us with additional intent markers.
But then I found that email has a non-converter rate of 37%.
Now, we are dealing with some selection bias here—users who self-select themselves into an email list are more primed to convert anyway. But that number is still a silver lining I can use to my advantage.
Thought bubble: can we use certain channels to help us make up for performance gaps in others?
As it stands, SEO is already hard to justify in terms of ROI. Our efforts take much longer to yield returns and without keyword data, attribution has gotten a lot harder. Because of that, I hate giving other channels conversion credit based on my acquisition efforts. After all, it’s not like assists make the scoreboard!
But the reality is we’re all here to help the client or the business grow top-line revenue (efficiently). A multi-channel approach allows us to take advantage of inherent strengths in certain channels to bolster weaknesses in others. It doesn’t matter who gets the touchdown; if the team scores, that’s all that matters.
For this particular client, I asked whether or not we could take remarketing in a different direction and instead of pushing users (who aren’t ready to buy) really hard towards that purchase, we give them a unique value add for signing up for our email list. That way, email marketing can nurture this user over a longer period of time. And who knows, maybe some users are just waiting for the right moment to make that purchase. With their email now on our list, we’ll have more opportunities to capture that user when the moment is ripe.
Closing the gap between converters and non-converters is the best way to grow revenue without having to acquire new customers, which is especially important when we consider how competitive the search landscape has become (paid or non-paid). Getting more from existing customers is far more cost efficient than having to continually acquire new ones.
Ok, So Now What?
“These insights are great. But what can I do with this information?”
I am so glad you asked!
These two high-value segments split up your customers into four distinct groups. Depending on which group we’re looking at, we’ll have different optimization strategies to try to get the most out of each segment.
This is your golden group. If this is your biggest group, then by all means, continued expansion with your current non-brand strategy will naturally grow this segment over time.
However, if this is the group you’re struggling with then we need to examine your keyword strategy. Is your strategy not inclusive enough? Is it too broad? Is it too focused on informational rather than commercial or transactional terms? Perhaps it’s too narrow and you need a better mixture of target terms.
Keyword strategies should have a roughly 20-40-40 split between informational, commercial, and transactional terms, respectively. Otherwise, you risk being either too top-heavy and will struggle with conversions or being too bottom-of-funnel and struggle with volume. Of course, there are no hard and fast rules when it comes to keyword strategies. The only thing this segment will tell you for sure is whether or not it’s working. It’s ultimately up to you and your team to figure out why.
These are your brand ambassadors and should be treated as such. Reward your returning converters with a better UX and an easier shopping experience. Provide them with a unique value add for registering their email or signing up to be a part of your site. Give customers a reason to come back!
Do not sacrifice brand opportunities to go after that shiny thing called non-brand opportunity. It’s called opportunity for a reason; it’s not a guarantee.
Monitor this ratio as the number of new customers grows and be sure that you’re not growing acquisition and forgetting about retention.
Can we leverage other channels to help us here? Tap your buddies in paid search, paid social or email marketing to help move the chains together.
By far, the most frustrating group of all. Clearly there is brand interest, otherwise the user wouldn’t be coming back. But still, they’re not converting.
It’s likely that our site is the problem here. Is there an expectation gap?
Is it a user experience gap? What about the shopping experience? How is mobile UX stacking up?
Is it a product problem? Are we not clearly communicating what our product is or what the user can expect?
Or is it a content problem? Is our keyword-to-landing-page mapping problematic? Have we improperly classified intent on our landing pages?
Depending on your area of weakness, address accordingly. If you’re not 100% sure which of these areas it may be, do what I do and ask the end customers. In the end, it doesn’t matter what you or your agency thinks; your customers’ opinions are the only ones that matter.
Good Night, and Good Luck!
Mindful reporting can lead to actionable insights; don’t let those naysayers tell you otherwise. They know nothing, like Jon Snow.
By creating a report built around a specific purpose and using our segmenting superpowers to break up our data set into more manageable pieces, we can create specific optimization strategies based on our own data and our own customers! Now it’s just up to you to figure out how to fit this into your SEO project plan!
Good night and good luck!