The Value of Behavior
In a webinar I gave recently, entitled “Understanding Website Usage,”, one specific question was asked several times.
“If most of the reports you are suggesting require values to be relavent, how do we assign values to our site activity?”
That is one of, if not the most, important questions you can ask regarding your analytics endeavors. And once you understand this basic principle of analytics, you will have a tool that will help you absolutely dominate in your marketing endeavors!
There is one major hurdle that we have to get through in order to assign values to activities on college and university websites. These sites are not ecommerce sites. If the activities we are tracking don’t have an actual dollar value, then how are we supposed to sign a value of any significance to anything that a user does? Well…I’m glad you asked! There are actually two ways that we can go about doing this.
The Simple Method (not my favorite, but better than nothing if time is extremely limited)
Let’s say that we want to track a few specific activities like:
- Requests for information
- Setting up a campus visit
- Applying online
The easiest thing to do would be to ask how much you would be willing to pay for each of these activities to be completed. For example, if you would be willing to pay an external vendor $200 for a completed application, then assign that value to your goal in Google Analytics (we will get to that part shortly), and that is all there is to it. The value is reasonable because it is what you feel that activity is worth to your school.
The Advanced Method (please take the time to utilize this method)
When it comes to analytics, there is almost always a more advanced method you could deploy to get better data. Often times, the payoff for the extra work just isn’t worth it. THIS ISN’T ONE OF THOSE TIMES!
In this method, we are going to start with an actual value that we know to be accurate. Let’s say we are a school whose yearly tuition is $30,000. Knowing that one bit of information, we can work backwards to determine some statistically relevant values for steps leading up to that action. Here is what that would look like:
From this one value we can work upwards through other activities just like we were climbing up a ladder. Some activities that we might include would be number of acceptances to matriculates, number of applications to accepts, number of campus visits to applications, etc. At Stamats we recommend using a running average of the past four or five years to get relevant data on these numbers. Once we have our averages, our images starts t tell us a better story:
We can extend this as far as we would like. The only issue to consider is that every step up is a statistical value based on a previous statistical value, so the accuracy can be off. However, it is also important to realize that you have much larger pools of data, so you should still generally land within one or two standard deviations giving you reasonably accurate data to make your marketing decisions. Carrying this further, you might see something like:
One other interesting thing to note is that you can use this method to determine values of all of your marketing efforts and you can compare the relative value of them before you even open your Google Analytics program. This is referred to as offline data analysis. You also can extrapolate what your campaign might look like in terms of your marketing costs and efforts. In this case, we have only looked at email campaigns. If we extrapolate our data based on these averages. we know that we would need the following numbers to meet our goal (approximately, of course):
So that is how you define values to activities both on your site and with your external marketing campaigns. In my next post, I’ll share with you how you can set up your goals and funnels within Google Analytics to utilize this data and begin tracking the values of you individual pages and external marketing campaigns such as TV, email, radio, etc.
