New Digital Marketing Analytics Report shows social media is not the best source of acquiring customers:

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It’s great to see Insights that data can uncover. I saw a nice insight in a report I read about Analyzing customer acquisition channels for e-commerce sites and in this blog post, I am sharing it with you. So what are the top customer acquisition channels for Commerce sites? The Top channels are Organic Search, Emails & Paid Search.Here’s the report: E-Commerce Customer Acquisition Snapshot

It was not surprising to me to see Organic Search and Emails being among the Top customer acquisition channels but what surprised me was  relatively poor performance of social media in acquiring customers. Here’s the chart showing performance of various online channels for acquiring customers:

ecommerce analytics percentage of customer acquired vs. channel

Data Source: http://blog.custora.com/2013/06/e-commerce-customer-acquisition-snapshot/

Note #1: The post is NOT about devaluing the benefits of social media and it comes to down to understanding the goals of having a social media presence in the first place. While computing the ROI of social media, there are other factors like increased brand awareness, customer loyalty to be considered. But I posted this data because it’s a great way to show how data can uncover insights and sometimes it may surprise you

Note #2: The percentage of customers acquired does not add up to 100% for a year because the data does not include things like direct traffic. The author of the report confirmed it over an email w/ me.

That’s about it for this post. Your comments are very welcome!

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Seven ways Analytics can create value in an Organization:

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The value created by Analytics in an organization can be more than one and it depends on what an organization is trying to do with analytic’s – with that, Here’s the list that I compiled from my readings over the past few weeks:

  1. Increases revenue
  2. Creates strategic advantage
  3. Improved decision making (And increasing the speed of decision-making)
  4. Generates innovative insights
  5. Increases productivity
  6. Increases margins
  7. Reduces operational costs

The role of Sentiment Analysis in Social Media Monitoring:

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I’ve posted tutorial/resources about the Technical Side of Sentiment Analysis on this Blog. Here are the Links, if you need them:

LingPipe (Java Based) | Python | R language resource | Microsoft’s Tool “Social Analytics

Apart from this, I’ve used other Tools per project requirements and It’s been fun designing and developing projects on “Sentiment Analysis” primarily using Social Media Monitoring. Having worked with clients on projects that use “Sentiment Analysis” – I reflected about the role of Sentiment Analysis in Social Media Monitoring. And in this blog post, I am sharing these reflections:

What is Social Media Monitoring?

Social Media Monitoring is a process of “monitoring” conversations happening on social media channels about your brand/company.

Is it NEW? Not really. The idea of monitoring or gathering data about what is being talked about the brand/company is not new. Earlier, it was newspapers and magazine-articles and now, it’s the social media channels including online news, forums and blogs and thus the name given to this process is “Social Media Monitoring”

brand monitoring social media

What is Sentiment Analysis?

Analyzing data to categorize it under a “sentiment” (emotion).

Example. Is this review saying positive, negative or neutral thing about our product.

sentiment analysis positive negative neutral

side-note: Sentiment analysis is often categorized under “Big Data Analytics”.

What’s the Role of Sentiment Analysis in Social Media Monitoring?

We’ve seen that in social media monitoring, we gather all online conversations about a brand/product/company. Now wouldn’t it be great to take the data that we have and bucket it under “Positive”, “Negative” or “Neutral” categories for further analysis?

So few questions that can be answered after we have results from sentiment analysis:

1) Are people happy or sad about our product?

2) What do they like about our product?

3) What do they hate about our service?

4) Is there a trend or seasonality in sentiment data?

Among other business insights that may be not be easily answerable with just plain text data.

Thus sentiment analysis is one of the step in social media monitoring that assists in analyzing sentiment of all the conversations happening on the social web about a brand/product.

That’s about this for this post. Here’s a related post: Three Data Collection Tips for Social Media Analytics

your comments are very welcome!

Business Metrics #2 of N: Customer Retention Rate

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In this post, We’ll explore a Business metric called “Customer Retention Rate”

What is it?

It is a metric that helps an organization monitor the % of customers retained.

Let me give you an example:

Year Number of Customers Retention Rate
0 100 100%
1 85 85%
2 70 70%
3 65 65%
4 61 61%

Do you notice the third column that keeps a tab on the percentages of customer retained? This is the basic Idea behind customer retention rate.

How is it used?

This metric correlates with other key business performance measures like: customer service, product quality, customer loyalty. Think about it. If the customer retention rate is higher than the organization must be doing “something” right – that something could be: great loyalty program, great customer service or great product quality! If it’s low then it requires some action from decision makers – they would want to know the reasons so that they could fix the situation.

In earlier post, we talked about Customer Lifetime Value – now higher customer retention rate would also help us have a higher customer lifetime value.

Also it’s important to realize that the cost of acquiring a new customer is typically higher than keeping existing customer – and so organization that sells products/service like to measure the customer retention rate.

Also, if you customer data then you can drill down to find trends in the retention rate. Questions like: Which Age group has the highest retention rate? or which has lower? Retention rate for male customers? And also predicting customer retention rate of a new customer?

Conclusion:

In this post, we learned about a business metric “customer retention rate”.

And as a reminder, This series is meant to understand Business Metrics from Analytics Perspective.

Three Data Collection Tips for Social Media Analytics

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Data integrity is important especially if critical business decisions are based off on data. To that extent, in this post, I’ll write about five data collection tips to help you have accurate data for “social media analytics”. So here are the tips that are applicable to social media analytics irrespective of the tool you are using:

1. Social Media Platform

social_media

Select the right social media platform for capturing data. You do not want to select few such that you miss data.And you do want to select irrelevant social media platforms because if you do, then you’ll introduce noise in the data. Let me take an example. If your project needs to be based on USA only then you do not need to add “sina weibo” (Chinese social network) in your social media sources.

Now, Based on your business need for “social media analytics” campaign, you should test all possible social media platforms – you never know who might be talking about things that you are interested in. After you have selected the right social media platforms for your project, let’s go the next step:

2. “Search Keyword” Selection

Some of the social media platforms let’s you collect data via “search keywords”. Like twitter allows you to collect data via “hashtags” and/or keywords. So if you want to collect data about all social media posts having “american airlines” then you should not collect data using:

AMERICAN OR Airlines:

If you select the above rule, then it will introduce a LOT of noise because we’ll collect data people talking about just “American” PLUS data about people talking about just “airlines”. That’s bad!  What you want is rules like these:

1. American AND airlines

2. “American Airlines” (as a phrase)

american airlines social mediaNow, I can’t stress the importance of selecting the right search keywords enough. Choosing wrong keywords will add noise that would be bad for analytics. So choose keywords such that you are not adding noise as well as not missing on conversations. There’s no secret formula here, continuous improvement is the way to go!

3. Language & country Filtering

global-social-network

Social networks are GLOBAL in nature and so it’s important to filter (or include) based on the project that you’re working on. Not doing so would add noise in your data. And also remember to include country and language because you do not want to miss out on conversations either.

Conclusion:

Three Data Collection Tips for Social media analytics that I shared in this post are:

1. Select Right Social Media Platform

2. Select Right search keywords

3. Select Right Country and Language.

Guest Blog: How to measure ROI of Social Media Marketing?

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Introduction:

This is Guest Blog by Jugal Shah. Jugal is pursuing MBA w/ focus on Marketing from a premier university in India. He shares his views on marketing, sales and strategy via his Blog & Facebook.In this post, He briefly comments on “How to measure Social Media Marketing ROI”.

Jugal Shah’s Short post on Measuring Social Media Marketing ROI:

In social media marketing, ROI is not in just monitory terms. So, for social media ROI, my focus would be on
1) to how many people I have reached
2) How many people I have engaged through online activities
3) Becoming a conversation enabler and perception driver

Then focus on

1) how much increased revenue is due to social media reach (you can do this by tracking referred link)
2) How many leads you generated through social media
3) How social media efforts helped to resolve customer query/problems and led to more customer satisfaction (remember customer acquisition cost 10 times more than customer retention cost).

In a nutshell, It’s of utmost important to use Social Media as:

  • conversation enabler
  • perception driver
  • customer retention

Conclusion:

Paras: Jugal, Thanks for this post. I am sure, this short post would be a great food for thought for readers who are interested in Digital Marketing Analytics or analytics in general. Readers, Feel free to reach out to him on his blog and/or Facebook page.

Business Analytics Continuum:

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Think of “continuum” as something you start and you never stop improving upon. In my mind, Business Analytics Continuum is continuous investment of resources to take business analytics capabilities to next level. So what are these levels? Douglas McDowell explained about this concept in recent post here – I think it was a great food for thought for me and hence I posting about this particular concept here. 

Here is the visual representation of the concept:

business analytics continuum

And I would encourage you to read the entire post and other posts in the series here: PASS BAC Preview Series: Business Analytics Defined

Business Metrics #1 of N: Customer Lifetime Value

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This post will briefly describe an important marketing metric called “Customer Lifetime value”.

What is it?

It’s an important metric in the world of marketing. It helps businesses measure a customer’s worth to a business during the entire business relationship. In other words, it helps a business calculate net profit associated with a customers relationship starting from first purchase AND subsequent purchases along with expected future purchases.

How is it used?

It’s used to measure return on investment when formulating marketing strategies. Here’s an example: If your strategy costs $100 to acquire a customer and the average lifetime value of customer is $400 – then well, that’s a great thing, isn’t it?

It also helps business focus on making the most out of the existing customer relationships.

To extend these examples in the Internet marketing world, let’s take an example:

Suppose that the cost of acquiring a customer via Internet marketing is $25. The customer buys a $10 worth of goods. Is this good? Not from what we’ve seen so far. But the lifetime value of customer is $120 – see, now it does makes sense to spend $25 to acquire a customer.

Conclusion:

In this post, I wrote about a key Business Metric that should be of help when you work on your Marketing analytics project. Note that accurately measusring this metric is NOT an addition of couple of numbers and there is some thinking involved. To that end, I would leave you thinking about this critical business metrics that could be used in marketing analytics project! Your comments are very welcome!

Three Data Visualizations I liked this week:

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I have been working on creating Dashboards for one of my projects. As a part of the research, I looked at few Dashboards out their on the inter-webs. Here are three of them that I liked:

1. Social Media & Sentiment Analysis:

What I like about this Dashboard is the creative use of Data via Sentiment Analysis:

sentiment analysis social media dashboard

2. Microsoft Research’s Viral Search Project:

What a creative way to visualize viral content!

visualize viral social network data microsoft viral search

3. Social Media analytic’s Dashboard:

Nice one page social dashbaord!

social media analytics dashboard

Do you see the bottom right part of the report that shows you engagement levels by post type, if you want to compute it – here’s my blog post on that: Social Media Analytics. Facebook Page Smackdown: Status updates vs Images?

 

My First Five Toastmaster International club speeches:

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In this post, I want to share the title of the first five Toastmaster speeches that I delivered over the past few months:

1. Ice Breaker

2. Glossophobia (Fear of Public Speaking)

3. Get ready to outsource your computing

4. What’s it like for folks who live below poverty line?

5. what’s it like to start a startup?

Related Post:
Half way through Toastmaster’s competent communicator manual
Want to practice public speaking? Join Toastmaster’s!