jim sterneIt’s unlikely anyone in digital marketing is unfamiliar with  Jim Sterne. His career as a marketer, author, conference chair, speaker, and above all, web metrics guru has earned him international renown and respect. Jim will deliver one of three keynotes at Econsultancy’s Peer Summit in New York in October, so we caught up with him to find out what he’ll be sharing with the audience, and what’s been on his mind lately in terms of how metrics can help build organizations.

Q: So, what are you going to be discussing at your Peer Summit keynote?

A: My favorite topic these days is using Web metrics to drive the business. What I mean by that is most people are using Web analytics as a benchmark: how did we do yesterday, and how are we doing today? Smart people are actually analyzing to optimize their website. The advanced people are using Web data to optimize all of their marketing. They’re measuring what’s happening on their website to inform the rest of their marketing. So when Best Buy does a television ad about Twitter, that’s what I’m talking about. Really good companies – and I’ve only come across a couple of them – are actually using it to drive their business. In other words, watching behavior online to determine what new products or features or territories to move in to.

Q: Can you provide some examples?

A: A short example I came across is Ford looking at how people configure pickup trucks online by color and features in order to provide specific options and packages to different parts of the country. They were watching how people configured the trucks by geography. Now that’s good for marketing, but the next step was they were putting certain color trucks with those specific options on trains and shipping them to those parts of the country in expectation that the people who configured them would actually want to come buy them and the trucks would actually be there, instead of having to wait several weeks for delivery.

Q: I remember when Benneton opened in this country. They made all their clothes in white, then dyed and shipped them according to geographical sales patterns.

A: When we start talking about customer-centricity that was the one where we went, “Gee, they’re actually tracking daily sales figures to drive the dye vats in factories.” That was pre-internet. Now we’re watching not just actual sales, but presales. We’re looking at online behavior to figure out what to manufacture and where to ship it in anticipation of the sale.

Q: And we’re also looking at much more economical ways to do this. Give me another example?

A: Another example would be MEC, the mountaineering sporting goods store in Canada. They looked at online sales and mapped it out, again by geography, to determine where to build another store. They said, “look, we’re getting orders from Montreal, but we don’t have a store there. We should build one.” And it worked. So this is what I mean by driving the business.

Dell has their IdeaStorm, which is: give us your ideas for products. What would you like to see us produce? Oh, by the way look at what everyone else is suggesting and comment and vote. The most popular ones bubble to the top and we hand those over to our product development team.

Q: So let’s bring this down a notch to mere mortals: smaller retailers, even mom ‘n’ pops. You are talking about major brands and major resources. What can I do with metrics for my ecommerce site that’s selling, say, potholders from somewhere in Vermont?

A: The easiest thing, if we want to make this just brute force simple, is you create your navigation that branches off so it’s the root, the trees and the leaves. So if I’m interested in the regular square potholder or the mitten potholder I’m going to click one or the other. And then it’s, “Oh, what color would you like it in?” I pick one of six and that takes me to the next level: “do you want your name stitched on it?” I haven’t done any database work, I haven’t done content management. This is just the tree branching off in my HTML to multiple pages. But if I look how people navigate, on average more people want red square potholders than want yellow mitten potholders, that tells me what to order in the factory, even though the sales haven’t happened yet. I’m clearly seeing into the hearts and minds of the marketplace.

Q: So whose job is this?

A: Making the website work is part the technology people or whatever service you outsource to, and marketing. Now we’re talking not only about making our website better and making marketing better but the company better. This means this is data that the CEO needs to know about. It’s a new data stream. We’ve got a 500% increase in traffic to investor pages, well, the CEO needs to know about that. It’s across the board. I was describing this at the eMetrics conference in Munich. One of the guys in the audience said, “Wait a minute! We need to do Web metrics, and to understand everybody else job in the whole company?”

Yes! You’re paying attention! Because instead of just being web marketing people or web analysts, this is the data we use to become business advisors. Did you know this particular size of product is really popular in Canada? And for some reason, people in Mexico don’t care about it at all.  So let’s stop advertising it in Mexico and let everybody in Canada know that we’ve got it in the size they like. The possibilities are many.

Q: They are indeed. That said, what are your tips for overcoming analysis paralysis?

A: Goals. The worst thing about web analytics is there is just too much data, and we look at it and we go, “This is really interesting.” But that doesn’t mean that it’s useful. It’s like a big bowl of alphabet soup that you stir around and hope it spells out something. So you want to look at the business goals, and the goals du jour. Is it more important today to raise revenue? Lower costs? Increase customer satisfaction? Open new territories?  What is it that’s on the minds of people who are running the place? Ask a question of the data rather than expecting the data to tell you  something you didn’t know. T’s the difference between discovery and problem solving. Discovery’s interesting, but it’s not always useful. You can’t do pure research and development unless you have some goal in mind.  Same thing by looking at a giant set of Web behavior. What question are you asking? If someone comes up to a Web analyst and says, “Hey, I need to know how many people clicked on that banner, searched for that term, and looked at more than five pages,” the usual answer is, “Sure. I can have that for you by this afternoon.  The correct answer is” “Why do you need to know? What problem are you trying to solve? Because I have a bunch of other data that might be useful to you.”

Q: Let’s talk social media metrics, given social’s what’s on everyone’s minds these days.

A: That’s pretty straightforward. It’s about business results. I’m going to start with brand analysis, awareness, attitude, do you relate these attributes to my brand, and if you heard about me on Twitter, even better because I’ve got a new traffic source. Next, did you come to my website and did you accomplish what I wanted you to there, whether it was purchase, registration, download, subscribe or other business outcomes? So how good is social media at moving any of those needles? It’s just another traffic source. If you are on the advertising and marketing side then there’s customer service, which is a whole other set of: are you answering questions and solving problems and increasing customer satisfaction?

Q: What are you looking forward to at Econsultancy’s Peer Summit, other than your keynote?

A:  Meeting the peers! Waving the Econsultancy flag. To help people in the U.S. become aware of this incredible resource.

Q: Anything else you wish to add?

A: You could of course ask how fabulous the next Emetrics Marketing Optimization Summit in Washington, DC will be. I’m focusing this time on the brands, rather than the experts. The sessions are all people who are doing the actual work at real companies. We’ve had a lot of theory for a long time and a lot of best practices. Last year was the, “Oh my god, the sky is falling” year. This year, those of us who still have jobs are actually working, and here’s what we’re actually doing. What are we actually measuring and what are we actually getting value day-to-day? It’s about the people in the seats who are doing the work, not about the consultants and the vendors.

Q: Sounds very much like the Peer Summit approach!