Digital Analytics and Marketing Framework for Conversion Optimization

Every analytics consultant or agency worth it salt uses some type of framework in order to measure and optimize its digital marketing efforts.

In this article I am going to present the framework I use.

My framework is loosely based on the framework proposed by Avinash.

Since it is loosely based and different hence this article.

Key attributes of my framework

Following are the key attributes of my framework:

#1 My framework does not take acquisition, behaviour and outcomes segments into account. I find such type of categorization too rigid and unsuitable for Agile Analytics.

#2 My framework is much more flexible in terms of choosing micro conversions and KPIs as there is no need to bucket them into acquisition, behaviour and outcomes segments.

#3 I have completely removed the concept of ‘segments’ from my measurement model as you can’t know in advance where your analysis will take you and which segments you may need to focus on for each goal.

#4 There is far less focus on data reporting in my framework. The data reporting format is not rigid at all. You can choose to report the way you like as long as it get your point across. There are no action dashboards and no dashboards for each KPI. I find creating all of these dashboards too much time consuming and unnecessary.

#5 There is much more focus on tasks and project collaboration as there is rarely a single person involved in implementing a strategy.

#6 My framework is based on Agile Analytics methodologies.

The main focus here is to rapidly deploy solutions (within a week) which solve customers problems in a timely manner and not spend 3-4 weeks in gaining and reporting insight and then delivering recommendations in lump sum at the end of each month which is usually based on 1 or more months old data and then spending another month in getting those recommendations implemented.

All ecommerce businesses have the following four core business objectives (macro conversions):

#1 Acquire new customers

#2 Retain existing customers

#3 Increase sales

#4 Decrease Acquisition cost

I have yet to come across an ecommerce business for which these four macro conversions are not important.

Consequently all my marketing and measurement efforts must align with these business objectives.

This is the only way I can make sure that I am moving in the right direction every single day.

As mentioned earlier in this article: 12 guaranteed methods to reduce cost per acquisition, reducing acquisition cost is relatively easy.

So I start my measurement and optimization efforts by reducing cost per acquisition.

decrease acqusition cost

I use Basecamp for project management.

So my framework actually look like the one below:

decrease acqusition cost2

Retaining existing customers is relatively easier than acquiring new customers.

So after reducing acquisition cost, I focus on retaining existing customers:

retain existing customers

When you direct your optimization efforts in reducing acquisition cost and retaining existing customers, you indirectly increase your website sales.

However you can increase the website sales further without acquiring more traffic through landing page optimization and testing.

Getting the most out of the existing traffic makes sense.

Therefore the next macro conversion that I focus on is  ‘Increasing Sales’:

Increase Sales

Finally I start directing my optimization efforts in acquiring new customers:

Acquire new customers

So in short, my start looks like the one below:

Decrease acquisition cost >  Retain existing Customers > Increase Sales > Acquire new customers

However once I have started working on all the four business objectives then there is no specific order I follow to achieve macro and micro conversions.

Following are the key components of my digital analytics and marketing framework.

You need to understand these components in order to create and use my framework:

Macro Conversions (Business Objectives)

Macro conversion is one of the main goal for which a website has been setup.

As mentioned earlier, almost all online ecommerce businesses have following four macro conversions:

#1 Acquire new customers

#2 Retain existing customers

#3 Increase sales

#4 Decrease Acquisition cost

You determine macro conversions with the help of the people who actually run the business and not from the website or Google Analytics reports.

Consequently you need to interview your client.

Micro Conversions

Micro conversion is the goal which helps in achieving macro conversion.

Each macro conversion can have one or more micro conversions.

For example if one of your macro conversion is ‘acquiring new customers’ then micro conversions could be:

  1. Increase organic search traffic
  2. Increase paid search traffic.

You need to determine all relevant micro conversion for each macro conversion with the help of client and by visiting the client’s website.

Strategy

Strategy is a specific method which is used to achieve macro and micro conversions.

I follow the process below for creating a strategy:

#1 WHAT (‘what is involved’)

You need to determine exactly what is involved in creating and implementing your strategy.

#2 WHO (‘who is involved’)

You need to know who and how many people are involved in the creation and implementation of your strategy.

These people can be you, your colleagues, boss, stakeholders, employees, clients etc.

#3 WHEN (‘situation’, ‘date and time’ or ‘deadlines’)

A strategy needs to be time bound in order to be cost effective.

Without deadlines there is no urgency.

You can create your strategy next week or after two months.

#4 HOW (‘method’)

Exactly how you will create your strategy and how you will implement it.

You should outline the whole process step by step.

#5 Assumptions made for creating and implementing this strategy

It is important to outline assumptions in order to highlight and manage the risks involved in implementing your strategy/recommendation.

For example, following are the assumptions under which this strategy will be carried out:

  1. The client will resolve all of our queries on time.
  2. Client will provide required access, documents, permissions and any support in a timely manner.
  3. Client will implement our recommendations in a timely manner.
  4. Client will not overwrite our work.

#6 Possible barriers to the implementation of this strategy

Determining and outlining all possible barriers is another powerful way to manage risks.

For example following could be possible barriers to the implementation of your recommendation:

  1. Lack of expertise – For example you want to increase the traffic through SEO but the client doesn’t have skilled link builders available.
  2. Outside your area of responsibility– You want to reduce the page load time of your website but this task falls into the hand of the IT department on which you have little to no control.
  3. Time constraints – Client’s developer can work only 1 hour a day on implementing this recommendation.

#7 Likelihood of success

Can we really carry out this strategy and achieve the desired level of success within designated time frame or is it a far-fetched dream?

If the likelihood of achieving success through your strategy is quite low, you may need to come up with another strategy.

#8 Cost of delaying the implementation of this strategy

It is very important that you calculate and report the cost of such delay in order to get your recommendations implemented in a timely manner.

All decision makers do their own cost benefit analysis (if you don’t present one) in order to prioritize their tasks and manage their resources.

People have got millions of priorities of their own.

So why they should give your work the top priority?

Note: You can create one or more strategies for each micro conversion.

Tasks

A strategy is made up of one or many tasks.

When you complete these tasks, you implement a strategy.

As mentioned earlier, I use basecamp to create and manage all of my tasks.

Key Performance Indicator (KPI)

A KPI is a metric which is used to determine how you are performing against your objectives.

We can have KPIs in the form of numbers and ratios.

So we can have ‘number KPIs’ and we can have ‘ratio KPIs’.

Any metric which has the ability to directly impact the cash flow (revenue, cost) and/or conversions (both macro and micro conversions) in a big way can be a good KPI.

You need to set up KPI for each micro conversion.

For example, if increasing organic search traffic is one of your micro conversion than ‘% change in new users through organic search in the last one month’ can be a good KPI.

Your client can help you in identifying KPIs.

Periodically review your KPIs.

Related Article: Key Performance Indicators (KPIs) with Examples – Beginner’s guide

Targets

Targets are numerical values through which you define success or failure.

As a marketer you must know what is going to be counted as success and what is going to be counted as failure.

Without targets, no goal is unachievable.

Your targets must be SMART (Specific, Measurable, Attainable, Relevant and Time Bound).

For e.g. ‘increasing the traffic of the website’ is not a SMART target.

Increasing the traffic of the website by 25% in the next 6 months is a SMART target.

You must create monthly, quarterly and yearly targets.

Use historical data to identify targets.

Set up targets for each KPI and review them every month.

The beauty of my framework is ‘simplicity’.

There is nothing fancy about it.

It is easy to understand and implement and most importantly, it is Agile.

However how well this framework will work for you depends upon many external factors:

  1. Your ability to ask questions.
  2. Your ability to prioritize tasks, manage risks and resources.
  3. Your ability to quickly find and fix data collection issues.
  4. Your data interpretation skills including knowledge of maths, statistics and data science in general.
  5. Your data reporting skills
  6. Your ability to get recommendations implemented in a timely manner.
  7. The skills and ability of your team.

But no matter what your present skill level is, creating and following this framework is going to help.

Another article that you will find useful: How to Start Conversion Optimization like a Pro

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Himanshu Sharma

Certified web analyst and founder of OptimizeSmart.com

My name is Himanshu Sharma and I help businesses find and fix their Google Analytics and conversion issues. If you have any questions or comments please contact me.

  • Over eleven years' experience in SEO, PPC and web analytics
  • Google Analytics certified
  • Google AdWords certified
  • Nominated for Digital Analytics Association Award for Excellence
  • Bachelors degree in Internet Science
  • Founder of OptimizeSmart.com and EventEducation.com

I am also the author of three books:

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