Web analytics - Case Study Example

Web analytics Analytics is a process in which raw is collected from a market, combined with historical market trends and conclusions made on possible market dynamics in the future. Data has to be substantially available to make conclusions. If data is not available, then analytics cannot be a success. Analytics has been determined to be the best system of improving customer service. This strategy builds profiles of the various customers according to their real behavior, segmenting customers into different types according to regions, income and tastes and preferences towards the product or service, understanding clients in the different segments allowing management to know the specific needs of each client regardless of where they are from. This assists a company to avail the specific customer needs on time, respond to their issues faster saving the customers precious time. As such, analytics leads to improved customer service and supports increasing customer retention percentage and high conversion rates leading to increase in sales and profitability for Photo box, Cashstore, Amari Hotels, Aegon Hungary Composite and Becker wood. Introduction to Analytics Analytics or web analytics are a method of using raw data to meaningful data, especially about clients and the market. The procedure may involve segmentation of the market to understand the clients better. Client data are usually collected using surveys, questionnaires, focus groups and feedback from the clients after using the products or services (Kaushik, 2009). The various businesses have to draft the questions to be asked to the clients very carefully. Some clients may be uncomfortable with some question. This helps the companies, institutions or businesses to approach the market intelligently, providing the products and services according to the tastes and preferences of the clients (Steffen, 2009). Using analytics has helped many businesses to not only retain the existing customers but to also get new clients driving sales and high profitability. This has made some experts name web analytics a great business performer (Todd, 2008). The companies discussed hereafter used analytics and worked to their advantage within a short time. Photo box Analytics Strategy Used Photo box is an online based digital photo and e-card sale website with about eleven million users across the globe. The continued use of the Internet inspired photo box to use analytics to get more clients across the globe. Photo box analytics strategy was to understand the clients perfectly well. Data from clients was obtained through surveys, live chats, online community posts and focus groups. The data obtained was used to segment the customers into different segments depending on their location, behavior and tastes and preferences. Photo Box divided its clients into six different segments depending on these parameters. The various segments had varying tastes and demographics. All the customer data in each of the segments were profiled in a quest to understand them even better and provide products and services according to their tastes and preferences. The data were then used to predict future demand of the products and services from the customers. Analytics also helped photo box to make better decisions when doing their marketing in the different market segments leading to relatively higher conversion rates (Glagowski, 2010). Outcome At the same time, the company was trying to make it easy for the 350 staff to manage and profile the eleven million clients across the globe. Implementation of the analytics strategy at photo box had significant outcomes. The company could do better intelligent and specific marketing to clients depending on their profiles and tastes and preferences. Within a short time, the company had been able to get 16% new clients from the marketing. There was a 14% increase in sales of photo box products and services. Email open rate to clients sent increased to 33% while the website click rate increased to 35%. The case study also showed that the customer loyalty increased and 94% of all the clients using the photo box products and services were satisfied (IBM Corporation, 2011). The fact that photo box is used across the world made its analytics increase its visibility across the world. This puts the company at a once to have more clients from the different parts of the world. Its analytics should assist the company in knowing the most promising markets. Photo box should have a competitive advantage over its competitors, especially those that do not use analytics. Cash store Analytics Strategy Used Cash store, an online based shopping engine was founded in 2004. The company wanted to improve their clients’ experience, sales and profitability and only analytics could help the company to achieve this. The Cash store analytics strategy was to analyze the mistake that was there making it not to get better sales. The company would look for ways to address those issues to improve sales. One of the things the company realized through analytics is that conversion rates were too low through the website. The company though the website had problems and decided to change especially the home page. Two different home pages were created to try solving the issues. The two were tested repeatedly until it was determined the variant that was better over the other. Testing was through the website in which clients were allowed to register. It was realized that the clients registered on one of the two home pages better than the other one. One that had many registrations was claimed to be the best as client liked it more and was uploaded (Google Inc, 2013). Outcome The Cash store analytics strategy paid off with an increase of 25% in conversion rates. This would translate to higher potential sales from the clients converted successfully. Improved and continued use of the analytics would lead to even higher conversion rates, sales and profitability for cash store. Cash store is based in France and its services are available to people in France only. Using analytics should help cash store to segment the different parts of France, understand the clients better as well as their needs. It would also be able to know its weak points in delivering to clients intelligently and appropriately. Amari Hotels Strategy Used Amari group of hotels has a number of hotels in Thailand in other few countries in the Far East Asia. This group of hotels wanted to have a competitive edge over other hotel groups and companies in the regions they are located in. The one thing that would give the hotel company competitive edge was analytics. The approach on analytics by this group of hotels was to gain a better understating of their customers and how to use internet marketing to successfully interact with customers and increase sales. Analytics helped the Amari group of hotels to realize that their landing pages did not have enough information to attract their clients. Amari hotels used top length and path length approaches to understand the relationship between the clients and the website just before making a booking. It was also realized that most of the clients made a decision within the first visit to the website. The company decided to optimize the website making it more comprehensive and detailed on the different services and products to allow customers visiting their website to make better decisions within their first visit. This was aimed at making it easy for clients to access the necessary information faster saving precious time (Google Inc, 2013). Outcome Implementation of the analytic strategy definitely impacted the bookings and sales. The case study indicated that the improved landing pages increased bookings by 44%. The Google network display increased booking by 11% and optimization increased average booking value. These three factors led to higher sales and profitability for the hotel group. Amari group of Hotels is regionally specific operating in several countries in the Far East region. Analytics should help Amari hotels to understand the client better and get more conversion rates and high sales in the jurisdictions they operate in. Aegon Hungary Composite Analytics Strategy Used Aegon Hungary Composite is a subsidiary of the Aegon group which deals with life insurance, pensions and asset management. The increase in sales could be attributed to use the direct client targeting depending on their respective needs as per the data obtained from them - the response from clients increased by seventy eight percent. Improvement was all based on the data the company had collected previously but did not know how to use it. The company used sophisticated data analytics system to profile each client data, use predictive analysis to come up with specific policies that meet the customer needs. The director of service, development and online management Zoltan Hans pointed out “We knew we had a lot of customer data, but it wasn’t until we began using the advanced analytics solution that we truly realized how much valuable contributory information we had to identify cross-selling opportunities.” (IBM Corporation, 2013) Outcome The company got a window of opportunity to retain the existing customers and attract new customers using analytics. Upon implementation of analytics from IBM, the company increased policy purchases from five percent to eight percent. In addition, Aegon Hungary Composite expects there will be improved cross sell opportunities on the insurance offerings by the company. This is a direct reflection that the company profitability increased and was expected to increase even more with the analytic case study results. Aego Hungary Composite operates in Hungary only with millions of people. Its use of analytics should help Aero Hungary Composite to understand the different market dynamics within Hungary playing a role in understanding the clients better and providing the specific services they are looking for. Becker Underwood Analytics Strategy Used The Becker Underwood analytic strategy focused on ERP and CRM system to obtain as much intelligence as possible on the market. The company provides products in the whole world. As such, the company had to divide the whole world market into different segments in the world. Data were based on the demands of their products from clients, production, ledger, sales and operations. This data assisted in Planning and forecasting of future sales and inventory for the Becker Underwood. This helped the company understand their clients well and come up with a proper strategy to produce, market and deliver the products according to the specific client requirements in the different segments. Outcome Becker Underwood is a multinational company that deals with agricultural and horticultural products. The company had an objective of optimizing its supply chain in the quest to reach out to its clients using the analytics. Becker Underwood used IBM analytics and results were seen within four months after implementation. The return on investment was at 383% by the fourth month. The direct benefits to the company were more than two million dollars while the indirect totaled to about six hundred thousand dollars. The annual benefits totaled to about nine hundred thousand dollars (IBM Corporation, 2013). Becker Underwood reduced of reliance on spreadsheets and inaccurate and bulk reports, improved collaborations among the various departments, productivity enhancement as well as improved accuracy on forecasting and planning. In addition to that, IBM analytics improved the reporting with improved and few reports. Reports reduced from a high of 450 to just about 50 comprehensive reports (IBM Corporation, 2011). Becker Underwood operates across the world. The analytics helped the company to understand its clients and prospective clients in the world. This company should expect better sales and profitability from the various segments across the world increasing its profitability wholly. Competitive Advantage of Analytics Analytics has helped many made it possible for the companies discussed above to have a competitive advantage over their competitors. These companies understood their clients better, their needs and their demographic regions. This information helps the businesses to come up with proper marketing strategies. Market is done intelligently targeting the various customer segments and demographics. This has made it possible for these companies to have high conversion rates for new clients while maintain the existing ones (Stubbs, 2011). According to Davenport and Harris (2006), there is a clear distinction between businesses that use analytic approach and those that do not. Their study shows that companies that use this approach have 40% better decision making and support capabilities, 30% better insights and understanding on the market, 30% better understanding of the market industry and more than 80% of these companies are likely to make profits year after year. The sales for companies that use analytics is more than 50% better compared to companies that do not use this approach (Siegel, 2013). Case study from the above businesses has shown that they had a conversion rate of from ten percent and new client percentage increase. These factors drove sales high leading to better profitability. At the same time, the businesses got better visibility in the jurisdictions they operate in, smarter decisions and increasing the chances for even higher conversion rates. After all, marketing should go on to the specific segments and that should increase the number of clients as marketing continues (Davenport, Harris and Morison, 2010). Analytics have also assisted companies in fostering innovation. Companies may come across certain segments in the regions they operate in that require totally different product or service from what the company provides. In such a case, the company has to get its production department to think on the way to get what the clients are looking for. They may be forced to come up with a new product all together, for that specific market segment. Innovation can give a business a better competitive edge over their main competition. The other businesses may never catch with such a business especially if they do not use analytics strategy. No wonder so businesses are always ahead of others even when they try to follow in their footsteps (Camire, 2009). Businesses can use analytic strategy to optimize their product distribution and improved assortment of products and services. This factor can make customers to keep buying products and services from a certain company as well as referring their friends for the same products and services. Customer base increases and so do sales and profitability. Conclusion The use of analytics has a high impact on sales and profitability for the businesses covered in the case studies. The main objective of this strategy is to understand clients better to come up with a good marketing strategy. The strategy has been found to work with many companies and those that have not made this investment yet keep wondering what their competitors are doing they are not doing. Implementing this strategy should help such companies and businesses to be on the same level with competitors if not better. Their marketing conversion rate should improve remarkably and so should their sales and profitability sooner or later after implementing analytics. Businesses that have not tried this space age strategy should consider it for their journey to be better and to keep improving time to time. References Camire, K. (2009). Organizations Accelerate Innovation With Business Analytics. M2 Press, 1, 1. Davenport, T and Harris, J. (2007). Competing on Analytics: The New Science of Winning. Cambridge: Harvard Business press. Davenport, T., Harris, J, and Morison, R. (2010). Analytics at Work: Smarter Decisions, Better Results. Cambridge: Harvard Business Press. Glagowski, E. (2010). Photo Box’s Customer Obsession Drives Double-Digit Growth: The online photo company applies deep analytics and customer insight to make customer experience improvements that propel market share and customer growth. Customer Strategists, 2 (2). Google Inc. (2013). With Google Analytics, Google Website Optimizer and expertise from AWE, Cashstore.fr increases homepage conversion rates by 25%. Retrieved from http://static.googleusercontent.com/external_content/untrusted_dlcp/www.google.co.ke/en/ke/analytics/customers/pdfs/cashstore.pdf Google Inc. (2013). Amari Hotels harnesses the power of Multi-Channel Funnels to optimize the mix of its digital marketing channels to drive a 44% increase in website sales. Retrieved from http://static.googleusercontent.com/external_content/untrusted_dlcp/www.google.co.ke/en/ke/analytics/customers/pdfs/amari.pdf IBM Corporation. (2013). Becker Underwood Creates a More Intelligent Supply Chain with IBM Business Analytics Retrieved from http://www-01.ibm.com/software/success/cssdb.nsf/CS/SANS-94XQU3?OpenDocument&Site=cognos&cty=en_us IBM Corporation. (2011). Becker Underwood achieves an ROI of 383 percent within 4 months Using IBM Business Analytics to streamline global operations and refine supply chain management results in average annual benefits of $1M. Retrieved from http://public.dhe.ibm.com/common/ssi/ecm/en/ytc03324usen/YTC03324USEN.PDF IBM Corporation. (2013). AEGON Hungary Composite Insurance Co. Ltd: Analyzes thousands of data points to predict the needs of existing customers, increasing new policies by 3 percent. Retrieved from http://public.dhe.ibm.com/common/ssi/ecm/en/ytc03564usen/YTC03564USEN.PDF IBM Corporation. (2011). Photo Box integrates predictive technology in its corporate strategy. Retrieved from http://public.dhe.ibm.com/common/ssi/ecm/en/ytc03243fren/YTC03243FREN.PDF Kaushik, A. (2009). Web Analytics: An hour a day. Hoboken: John Wiley & Sons. Siegel, E. (2013). Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie, or Die. Hoboken: John Wiley & Sons. Steffen, D. (2009). Web Analytics: What's the Goal? Web analytics may still be a distant prospect but should not be ignored. Information Management, 19 (1), 50. Stubbs, E. (2011). The Value of Business Analytics: Identifying the Path to Profitability. Hoboken: John Wiley & Sons. Todd, G. (2008). Analytics has become the Darling of High Performers. D M Review, 18 (6), 6. Read More