Online Revenues Double. Why? A Web Analytics Story

A good problem to have is that your online revenue growth has doubled. But if you don’t know why, it can be worrying. Ryan Nokes, a customer, told us about his quest to use web analytics to understand the change. I’ll let him tell it in his own words:

Obviously, the revenue jump was significant. We downloaded almost every report that Omniture's SiteCatalyst software had to offer and combined them into a massive Excel file. From there, we proceeded to look for the causal factors in the spike.

We first analyzed the events in a typical conversion funnel, from initial site visit all the way to purchase. In all previous years, the events in the conversion funnel related to increased revenues. But such was not the case in 2008. This was an interesting find. Not only were the traditional conversion funnel elements not applicable in '08, but revenue was growing because people were buying higher priced items.

We then sought to determine the root cause of this increased revenue/unit. This led us to look for other revenue drivers and thus the analysis of customer types, specifically, the revenue patterns generated by new customers vs. loyal customers (as defined by having visited and purchased on 3 separate occasions).

Probably due to recessionary factors, new customers are purchasing less. The way they interact with the website has no bearing on the bottom line. However, loyal customers are comfortable with the site, the products, and the service and are thus ordering more.

Ryan had cracked the case: the jump in revenues was due to loyal customers ordering more when they came to the site. To continue to grow revenues the company should focus on maintaining an excellent experience for loyal customers. An area to investigate is how many new customers are converting to loyal ones, and why or why not they are doing so.