Why it’s important to analyse your data

Analysising your data is an important aspect of running any type of company. Especially if the company is an online business. I a recent test made by kvalibrænde, they noticed that almost 35% of all companies that offers some kind of product or service from their website, didn’t even have a statistic tool implemented. That is pretty amazing, when you consider how easy it is to install a free tool like Google Analytics which gives you an amazing amount of power.
Let’s take a look at a live example.

Analysing your data for a firewood and briketter site.

The site Billigtraepiller.info is an online shop selling wood pellets (or billige træpiller and Briketter as they call it – a type of firewood shaped as pellets), they sold about 10 pallets of wooden pellets a week, and never spend a minute analysing their data or even knowing where their customers came from. According to themself it was a very environmentally friendly product, so they had the potention to sell a lot more. I was then hired to help them figure out how they improve the amount of firewood they were selling, without having to spend a lot of money on marketing. I started out by installing Google analytics and told to that it would take a month before I would touch anything on their website. After a month I started analysing the data for the last month and could see several interesting facts. The most important one was their convertion ratio, it was all the way down to 0,65%, which ment that it would take almost 200 people visiting their site, just to make 1 sale. This could mean 3 things – One being that their prices was to high, compared to their competitots. Two their site was hard to navigate around it or simply didn’t look trustworthy enough. The third being the quality of the traffic was to bad, that the people visiting the sites came from souces that wasn’t relevant to their product Billige træpiller or simply didn’t need firewood at all.

I then started comparing their prices to the competitors and found that the prices was pretty fair compared to what other people was selling the products for. They wasnt the very cheapest, but far from being the most expenive either. As it was a quality product, there wasn’t any need to regulate the price at this point.
I took at look at the site it self and it was a bad need of an optimization. Not only did it have an old design, but nothing to give the people visiting any kind of security or trust. So we improved the design a little, added some reviews from old customers, added credit card logos, and even had it Ecommerce certified. We added a clear telefon number where people could reach them if they had questions and where the offices was located. All things to improve the trust of the people visiting the website.
Afterward it was time to look at the traffic. As I expected, a lot of the traffic came from various forums and guestbooks, where the owner had been advertising for his website, which certainly could help explain the poor amount of traffic. To improve the quality of the traffic we bought some advertising on two pages archilovers.com and a site reviewing firewood stoves, and we also set up a small Google Adwords campaign.

After implementing these changes and letting everyting run for 3 months, we could already see a huge improvements.. Sales had tripped, with only slightly higher marketing budget, but more important, the convertion ratio had improved from 0.65% to 2.15% which is a pretty big impromevent. They still get a lot of less relevant traffic, but they also get a lot more quality traffic from relevant sources now.
This wouldn’t have been possible without anylysing the data for the site, and it just an example of why it is so important to analyse your data when you run any type of online business.