In: Root » Internet » Internet marketing and advertising
We need to be able to intelligently discuss the differences between the following: • Visitor • Unique visitor • Return visitor • Qualified visitor • Stale visitor • User • Customer Visitor Somebody comes to your Web site. Pages have been served. Links have been clicked. You have a visitor. Buy why is that person there? No way to tell. At least you can calculate how costly it was to get the visitor there now that search engines like GoTo (now Overture.com) are selling placement: Ameriquest Mortgage (www.ameriquestmortgage.com) knows exactly how much it costs to get a pair of eyeballs to its site from GoTo.com. It willingly paid $2.72 for each visitor. It now has a baseline. What would it cost to run a direct mail campaign to drive traffic to its site? If Ameriquest Mortgage sends 100,000 postcards, each costing 10¢ for paper and printing and 20¢ for postage, it would have to get an 11 percent response rate to get the same value. On average, if you take the total cost of advertising in the home mortgage industry and divide it by the number of loan applications the mortgage companies receive for their trouble, it costs about $250 per application. Or, the companies could cut a deal with Sherri Neasham at FinanCenter.com for an order of magnitude less than that. You want a loan application sent to you electronically? That'll be $25, please. The cost of acquisition has nothing to do with branding. We are not measuring whether people feel better about your company because of your animated banner ads and interstitial interruptions or if they feel worse. Cost of acquisition has nothing to do with sales .... We are measuring only the number of people who show up at your Web site. It is the cost of acquiring somebody's attention, the acquisition of their eyeballs. You could stand on a street corner with fliers that say, "Come to our store and we'll hand you $5." What would happen? People would walk in, they'd get their $5, and some would spend it there. The next day, you hand out fliers that offer $2. The next day, $4. In time, you get a clear idea of what it costs to get people to show up. If you're good at tracking, you get an idea of how much it costs to get them to show up, look around, buy something-and come back and spend more another time. What matters then is not how many people show up, but how many of the right people show up. Are they qualified leads? Are they serious potential buyers? Are they actual buyers? The surefire way to Web success is to track from that very first click all the way through to the sale and beyond. All in good time. Let's not get ahead of ourselves. At the moment, you know that you've spent $X and got Y people to show up. At least you think you know. The site you buy banner ad space from says you got 2,082 clickthroughs yesterday. Your referrer logs show that you got only 1,765. What's wrong with this picture? Nothing - it's quite possible that both are correct. Your banner was clicked 2,082 times, but only 1,264 made it all the way to your landing page; 317 people clicked by mistake or waited too long for your page to load and hit the Back button. Happens all the time. From Sterne, World Wide Web Marketing, Third Edition, John Wiley & Sons, Inc., 1995 So you got somebody to the landing page-now what? Now it's time to determine if it's somebody you've seen before. Unique Visitor What makes this visitor different from that one? Your server logs show that two visitors came from two IP addresses. But if they come to you from the same AOL gateway, or the same corporate firewall opening, then they look identical to the server. When two visitors reach your home page from the same gateway, your log file tells you that the server sent the same page to the same IP address twice. Is this one visitor who hit the Refresh button? Maybe. If they both click on the same link, perhaps the Products button, you still can't be sure. Then one clicks for Product A, and the other for Product B. Got 'em! Right? Not so fast. So far, we could have one person clicking the Refresh button on the home page, then the Product button, then the Product A button, and then the Back button before looking at Product B. Remember, your server doesn't tell you about the Back button unless you drop in a little Java code to watch for it. In the end, without cookies, you'll never know if that's one person or two. You may try to design your site such that a visitor can only follow one path at a time, revealing a second visitor from the same gateway, but that won't account for a visitor right-clicking on a link and opening a new browser. Thus, one visitor can look like two, or four, or ten. The solution? Cookies. Return Visitor Placing a cookie on a visitor's computer is the best way so far of telling one visitor from another and knowing if the visitor has been to your site before. It identifies the visitor as coming from a unique computer. Drawbacks? Two big ones. The first is that a small portion of the population is afraid/annoyed/put off by cookies and disables them. There's nothing you can do about that. The second is that a growing number of corporate network managers don't allow cookies to pass through the corporate firewall. Still, they're the best tool we've got at the moment. Qualified Visitor A suspect is somebody who shares characteristics with your current customers. A prospect is somebody who has expressed interest in your products-perhaps by responding to a promotion. A qualified prospect is one who has the need, the desire, and the means to make the buy. Yes, some people buy things they don't need, so think of this in terms of psychology and emotion. "I really need that purple pair of pants!" But just because somebody needs a root canal, that doesn't mean they want it. Just because they need it and want it doesn't mean they can afford it. So all three components are really necessary for a visitor to be classified as a qualified prospect. Spending a little more time on qualified visitors than on unqualified visitors is worth it because the qualified ones have expressed some deeper interest than the rest. WebTrends defines qualified visits this way: "Visits by customers who are considered qualified as revenue generators. To qualify, a visitor must access specific pages on your Web site that are specified by the system administrator." A qualified visitor sees a certain number of pages or downloads the white paper or plays the game. That identifies that visitor as a potential customer. Stale Visitor Frequency is nice, but recency means everything online. Qualified visitors eventually lose their qualifications when they don't come back for a spell. How long? That depends on what you're selling. A car buyer is different from an office supplies purchasing agent, who is different from a refrigerator shopper, who is different from a chocolate consumer. Just make sure that you have a designation in your database for those who previously expressed interest and haven't done so of late. The astute marketing maven will send out an inducement with a note that says "We miss you." User A visitor is a visitor. They come, they look, they may even become qualified if they stay long enough and dig deep enough. But a user comes to your site repeatedly and for a reason. Be very careful when buying sponsorship space on sites and talking about how many users they have. One of the most amusing examples was Sixdegrees.com, which was built to help people find friends of friends. In the long run, they discovered that friends of friends of friends really didn't want to be found and the site folded up shop. But before they did, they were caught in a controversy of how many users they really had. One press release claimed 3 million users. Their publicist stood by that number in an interview with Silicon Alley. But the marketing director, in a subsequent interview, said they only had about 750,000 active users. In this case, "active" meant that they were still receiving email from Sixdegrees. Less than a month later, an email from Sixdegrees put the number at 462,000, while PC Data, which monitors Web traffic, estimated 340,000 unique visitors. That was only 11 percent of the Sixdegree's total registered users. Note the conflict between active and registered users. Meanwhile, Media Metrix estimated 193,800 visitors and NetRating estimated 133,000. Silicon Alley reported that "the 3 million users cited did not indicate the number of daily, weekly, or even monthly users, as the release intimated. Instead, the number represents the aggregate of site browsers who, whether they ever returned or not, had once filled out the brief registration form and surfed the site in the three years since its launch." The need for clarity is clear: A user is an identifiable individual (via cookie or logon) who meets certain criteria of frequency and sustained activity. Measuring whether that activity is sustained will help you keep your eye on your churn rate. Churn With goods in inventory, we refer to turnover. With users on a Web site, we talk in terms of churn. Visitors are too ghostly for this term to apply. They come, they go, and we don't know if they're new visitors or the same, loyal people coming back again and again. In keeping track of your unique, identifiable users, you can calculate your churn rate. Why? So you'll know where to spend your time. Are you signing up more people than you're losing? Should you be spending more time on retention than acquisition? Churn measures how much of your customer base rolls over during a given period of time. Divide the number of users who fail to return in a given time period by the total number of users at the end of the time period and you've got your baseline. Christopher Knight provides a concise example of churn in his "Churning Out Marketing Ideas to Keep Customers" article that appeared in the September 1999 issue of Boardwatch magazine aimed at Internet service providers who wish to measure customer churn: Say you have 2,000 subscribers on the first of the month. During the month you add 200 new subscribers. You also lose 50 subscribers. At the end of the month, you have 2,150 subscribers. Your churn rate is 50 divided by 2,150, which equals 2.3 percent, which is your churn ratio. Your growth rate for the month is 200 divided by 2,000, which equals a 10 percent growth rate. Annualized, this means (assuming you continue averaging the same performance each month) your ISP has a 27.6 percent churn rate and a 120 percent annual growth rate. Knight was looking at customers. Fortunately, customers are much easier to count than all the rest. Customer A customer is a visitor or a user who buys something. The wonderful thing about customers is that you know so much about them. Name, address, and even credit card information are willingly offered up to your database. Simple. Churn rates apply to customers as well, of course. How many people make the bounce from browser to buyer compared to the number of customers who don't come back? (Yes, I'm using browser in place of visitor or user. The difference? None at all. I just like the alliteration.) "But it's important to bring it up here, while we're talking about measuring the value of advertising your Web site and the value of those who are attracted to your site.
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