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Thursday

Improving web marketing effectiveness
Most organisations now have a well-established online presence, but how is it contributing to the business and how can its marketing performance be improved? In this article Dave Chaffey reviews approaches to measuring and improving web marketing.

Introduction
Most organisations now have a well-established online presence and naturally they want to assess and improve its contribution to the business. Measuring and optimising a web site is not straightforward as is suggested by these quotes from the NetGenesis e-metrics report.

‘I think working with this volume of data is a bit like being in a canoe in front of a tidal wave – paddling like hell and just hoping it doesn’t overrun you’

Publishing Company

‘Right now there is a growing demand to the point where people are banging on the door so that business decisions can be made on fact rather than fiction’

Services Company
A 2000 survey from Accenture and Cranfield School of Management has also highlighted the difficulties facing marketing managers looking to introduce or improve such measurement systems. Managers were asked to name their priorities for improvements to e-business measurement systems.

For Bricks and mortar companies, developing or introducing a more comprehensive measurement system and enhancing analysis capabilities to establish what really drives business performance was most important.

For Clicks and Mortar, integrating new systems with legacy systems and benchmarking against best practice was most important.

Finally dot-coms were concerned with improving clickstream analysis and customer tracking and profiling and improving the entire company’s performance measurement system.

In this article and the next we will describe an approach for building an e-marketing measurement system that will overcome some of these problems. It can be suggested that the following are needed:

(1) An effective process for the performance measurement,

(2) A metrics framework that specifies groups of relevant metrics,

(3) Appropriate tools and techniques for collecting, analysing, disseminating and actioning results (this is covered in next month’s column).

1 The process for performance measurement
To find the best process for measuring and improving the web presence we need to understand the barriers to implementing an effective process. Those commonly encountered are

· Senior management myopia – performance measurement not seen as a priority, not understood or is targeted at the wrong targets – reducing costs rather than improving performance.

· Unclear responsibilities for delivering and improving the measurement system

· Resourcing issues – lack of time (perhaps suggesting lack of staff motivation), the necessary technology and integrated systems

· Data problems – data overload or of poor quality, limited data for benchmarking



To avoid these pitfalls, a co-ordinated, structured measurement process is needed. Four stages are common to most measurement processes, but some are sometimes missed out due to other time pressures or unclear responsibilities. For each of the following stages, ask these questions. Do we have a person responsible for this? Do they have the skills? Does their manager review their performance? Are they supported by the right tools?



Stage 1 is a goal-setting stage where the aims of the measurement system are defined, this will usually takes the strategic e-marketing objectives as an input to the measurement system. The aim of the measurement system will be to assess whether these goals are achieved and specify corrective marketing actions to reduce variance between target and actual key performance indicators.



Stage 2, performance measurement, involves collecting data to determine the different metrics that are part of a measurement framework as discussed in the next section. Tools for collecting this data are discussed next month.



Stage 3, performance diagnosis is the analysis of results to understand the reasons for variance from objectives and selection of marketing solutions to reduce variance.



Stage 4, corrective action, is the implementation of these solutions as updates to web site content, design and associated marketing communications.



After stage 4, the continuous cycle repeats. As well as reviewing whether targets are met, the suitability of the metrics and targets should also be reviewed and revised.

2 The metrics framework
A metrics framework defines groupings of specific metrics used to assess e-marketing performance. It can be suggested that suitable measurement frameworks will fulfil these criteria. Check the measures you use against this list:

A. Includes macro-level metrics that assess whether strategic goals are achieved and indicate to what extent e-marketing contributes to the business (direct and indirect revenue contribution and return on investment).

B. Includes micro-level metrics that assess the effectiveness and efficiency of e-marketing tactics and implementation. Such measures are often referred to as performance drivers. E-marketing performance drivers help optimise e-marketing by attracting more site visitors and increasing conversion to desired marketing outcomes. Agrawal et al. (2001) recommend companies use metrics defined in three categories of attraction, conversion and retention as part of an e-performance scorecard using a combination of macro and micro-level metrics.

C. Assess the impact of e-marketing on the satisfaction, loyalty and contribution of key stakeholders (customers, but also investors, employees and partners).

D. Enables comparison of performance of different channels such as web against mail order.

E. Can be used to assess e-marketing performance against competitors.

F. Individual metrics follow the tried and test SMART guideline of Specific, Measurable, Actionable, Relevant and Time-related. Reducing the range of possible metrics to key performance drivers is also highly desirable to avoid information overload.

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