August 11th, 2009 | Published in Google Conversions
Starting as you mean to go on
Over the last three years at Moneyspyder, we have developed and refined a set of tools, processes and techniques that we use to help our clients decide what they really need to focus on in order to improve their websites. We've helped clients discover opportunities that can significantly increase revenue through building an 'Opportunity Profile' prior to any development or testing.
The Opportunity Profile should be the first output from an initial web analytics audit and review. Building a clear strategic and tactical plan without firstly drawing the metaphorical line in the sand is a rather fluid exercise resulting in a confusing and nebulous representation of a web business.
The Revenue Funnel
A fundamental tool in the Opportunity Analysis armoury is the revenue funnel. Built using Google Analytics data (either in a spreadsheet or via the GA API), the revenue funnel is similar to the well known goal funnel in Google Analytics. Rather than seeing where users are leaking from a checkout process, the revenue funnel shows where revenue is being left on the table. Where the goal funnel uses each goal step, the revenue funnel uses the main touch points on a site to represent the steps towards the gross profit figure:
The top bar represents the maximum potential revenue that the site would generate with 100% conversion. Subsequent bars represent the theoretical maximum potential revenue for:
• Users who didn't bounce
• Users who added products to their basket
• Users who started the checkout
Finally, we see actual figures for revenue and gross profit. Whilst the first bars are notional, and the numbers have been blurred to protect the innocent, the numbers themselves are not of interest at this point. The real value can be gained by looking closely at the relative sizes of the bars. Seeing that the majority of the revenue is being left on the table at the basket stage in this example indicates just where maximum impact on the bottom line can be gained. Does the site need a new basket? The funnel certainly suggests this!
The same graph can be visualised as a pie chart where the entire pie represents the 100% conversion figure:
Roll your own
Key to the Moneyspyder philosophy is to 'take the think out of eCommerce'. The revenue funnel takes the think out of what to prioritise quickly and clearly. Moving forward, the revenue funnel can be used to pose 'what if...?' questions to your Google Analytics data. Simple sensitivity analysis can reveal what levers to pull in order to affect maximum change to your gross profit. This straightforward technique has proven useful and valuable in getting effective change programmes rolling. Try it with your data and you could see some revealing insights!
By Doug Hall, Chief Technology Officer, Moneyspyder.
Moneyspyder are part of the Google Conversion Professionals Network, learn more about this programme and find an expert to help you to improve your online profitability here.