Valitics. Web Strategies, Net Results

Segment your customers from your prospects.  Customers and prospects use your site for completely different reasons, and it’s crucial to track your efforts with each group.

It should be much less costly to generate incremental revenue from existing customers.  You have their trust, and you can reach them with email campaigns, direct mail, and phone calls.  

Prospects will typically arrive at your site from online ads, TV campaigns, or referral links.  Fewer prospects will convert, and you will have to work much harder for their conversions.  Seeing steady improvement in prospect traffic and revenue means that you’re growing your market share and/or market size.

Here are a couple eye-opening examples of why it’s so crucial to segment customers and prospects.

Example 1

A Software as a Service client had consistent visits from the keyword “__client_name__ competitors”.  Without any clear evidence to the contrary, we assumed these visits were from prospects doing research before making a purchasing decision.  After segmentation, we found that most of these searches were from existing clients -- yikes!

It turned out that this traffic represented tens of millions of dollars of revenue that were “on the fence”.  By identifying which clients are using competitor related keywords, we can help reduce churn.

Note:

You may not see searches for competitors on your site.  This client just happened to have the top 3 organic results for their competitor phrase.  Most people will click through to one of the first results without necessarily checking the domain, so this client was able to get some valuable insight.

Example 2

After segmentation, we found prospect traffic represented just 1% of total site traffic.  Although traffic had increased over the last year, this was primarily from offline marketing efforts that resulted in online clients.  Prospect traffic was such a small portion of traffic that it could easily be doubled with an online ad budget of just a thousand dollars per month.

Implementation details

To segment your web analytics data for prospects and customers, start by identifying the event(s) that separate the two.  An ecommerce transaction or a login to your customer portal are perfect places to start.

On the pages, those events occur, add the following Google Analytics code:

_gaq.push(['_setCustomVar', 1, 'Visitor Type', 'Customer', 1]);

This deceptively simple line of code will create a cookie flagging the visitor as a customer.  Any repeat visits to your site, even those that don’t result in a purchase or login, will go into your customer bucket.

Finally, set up an advanced segment as follows:

Create another set to “Custom Variable (Value 1)” contains “Customer”.

Custom variables open the door to even more sophisticated segmentation.  For instance, you may want to segment your most loyal customers from those who only purchase once.  Look for a future post on additional uses.