What Google Analytics Doesn’t Tell You


Google Analytics is an incredible tool for all of the different bits of wisdom it provides to marketers. But the one thing it cannot tell you is critical, lest you view your web analytics as the end all be all of the data you need to make decisions.

What Is Google Analytics Good For?

Google Analytics, indeed any web analytics platform, is an excellent source of quantitative data. It can tell you who is visiting your site, what pages they are most interested in, where they are getting lost, and more. Navigation patterns, traffic sources, and conversion data is all crucial to optimizing your user experience and your marketing strategy.

But quantitative data is just one kind of data we need.

What Is Google Analytics Bad At?

While Google Analytics can tell you what is happening and how it is happening, it cannot begin to explain why something is happening. That is qualitative data, and it is just as important to understand how to improve your website, thereby improving the customer journey.

To get the answer to the “why” question, you need to go beyond Google Analytics.

Sources of Qualitative Data

Once you have used Google Analytics to examine where your users are having trouble, you will want to know why. You can look at the pages that they exit from with the smartest minds in your company, and each one of them will come up with a reason that answers the “why” question.

This is where most companies stop, deciding to listen to the person in the room with the most authority and design solutions that solve their chosen “why”. But your company is smarter than that. So what do you do to go further?

  1. Surveys – whether you are surveying users as they move through your site or sending them a follow up email, surveys allow you to ask questions about their behavior that go beyond analytics. You can ask them why they chose to visit the site, what they were looking for, and why they did or did not end up completing a purchase.

  2. Focus Groups – getting a bunch of your customers/users in a room together and asking them questions about why they shop with you, and what they like or dislike about the experience of using your website, is a great way to get ideas about how to improve from the very mouths of your user base.

  3. Interviews – one on one conversations with different customers combine the best of surveys and focus groups, giving folks a prominent voice and asking them to explain their behavior in depth.

When Does A/B Testing Come In?

A/B testing is another way to generate great quantitative data, after incorporating solutions derived from the qualitative sources above. You can get very close to defining why your users are behaving in a certain way, because you asked them. Then you took those answers back to your designers, developers, and product teams, and they created new experiences meant to solve any and all issues that people are having on your website.

That is where A/B testing comes in. You apply their changes and test them against the current website, to see if the applied solutions end up improving activity on the website.

You can do this on the live website, with all of your users as a test group, or in a more controlled-way, observing how individual users interact with the different versions of your site and asking them for feedback directly.

Who is Your Data Expert?


Every marketing team in 2018 needs a data expert. Who’s yours?

Your data expert is the go-to person for questions that require data. And that’s most questions.

One of the greatest things about being a marketer in today’s world is the amount of raw data available. Companies can truly be data-driven, meaning that we no longer make guesses or use instincts to make some of the most important decisions in our organizations.

If we want to know whether customers who find us on Google are more valuable than customers who find us on Facebook, we can look it up. If we want to know whether a 20% off coupon increases revenue over the long term, we can look it up. If we want to know if changing the shopping cart pages on our website increase conversion rate, we can look it up.

The answers are out there. Your data expert is the person who is going to get them for you.

Data Expert Skills

Your data expert comes with a set of skills required to do the job. Ideally, these are skills that he or she has fine-tuned over many years in the field. But not always.

First and foremost, your data expert has a strong attention to detail. They are well-organized, and will take the time to fully understand the definition of every metric and piece of data. It is easy when looking at a large data set to miss errors and misclassify items. Your data expert will know how to avoid these types of mistakes that might lead you down the wrong path.

Your data expert will know what data to look for to answer your questions. They will be able to simplify the answer to your question by only showing you the analysis that matters and leaving out all of the data that has no bearing on the specific conversation.

In addition to mastery of statistics and statistical methods, your data expert will know how to tell a story with numbers. They will know how to present the analysis in such a way that you, and all other non-data experts, will be able to see and understand the conclusions clearly.

Lastly, your data expert will be able to identify and signal where the holes are in your data. They will be honest about the answers they are not able to get and why. And they should be able to recommend changes in business practices to fill those holes to make future analysis achievable.

Where to Find a Data Expert

These are roles that exist, and more and more people are learning the skills to fill them. You will find your data expert the same way you find the rest of your team.

  • Job boards – you are looking for data analysts, data scientists, statisticians, business analysts, or the like. Each of these titles carries different skills and levels of experience, so do some research on what separates them and understand who you are looking for.

  • Existing employees – perhaps you have someone on staff who is a data expert and you never even knew. Ask around and let people know you are looking to fill this type of role. You might be surprised at who raises their hand.

  • Consultants and outside groups – there are many companies who you can tap to supply data expertise on a part time or project by project basis. Find out who has experience in your industry and reach out to ask about rates and processes.

How to Get the Most from Your Data

Many companies today claim to be data-driven. But few of them actually are.

What most companies mean when they say that they are data-driven is…

  • We know we should be data-driven, and

  • We look at some data on a regular basis, but

  • We still make decisions based on anecdotes and gut instinct.

In order to become a data-driven company, in the truest sense of the description, you must do three things well:

  1. You must work toward a clean and complete data set. This requires a clearly articulated strategy around data collection and reporting.

  2. You must understand exactly what the data is telling you. Implied in this is the fact that data can be interpreted in a variety of ways.

  3. You must trust that relying on your data in all decision making processes will lead to better outcomes.

Your data expert will help you achieve each of these, if you find the right person.

Are You Calculating Lifetime Value Wrong? – Guest Post

In marketing, there are widely regarded experts who advocate for the same methods, ad infinitum. Why question what’s widely known? Famous Silicon Valley investor and entrepreneur, Peter Thiel, begs a very significant question, “What important truth do very few people agree with you on?”

It’s difficult to swim up the intellectual stream, hypothetically speaking, and challenge the status quo. We found a question up for debate when calculating customer lifetime value, the estimate of how long a single customer will remain a loyal patron.

Many people default to calculating customer lifetime value with gross revenues, not profit. This may seem like a trivial difference when considering the calculation of customer lifetime value is a projection and not based in fact. We argue that profit margins should be considered when estimating CLV, but first, what other factors contribute to customer lifetime value?

How to Calculate Customer Lifetime Value

CLV = Average Value of Sale × Number of Transactions × Retention Time Period

Typically expressed as total revenue, it can be argued that this equation needs another component — profit margin.

CLV = Average Value of Sale × Number of Transactions × Retention Time Period × Profit Margin

Why Express Customer Lifetime Value as Profit?

There are many factors that contribute to a company’s bottom line. The revenue obviously represents the top line figure which is then subsequently strained by the costs of doing business. Unfortunately, no cost structure is ever safe from the effects of macroeconomics.

Prices of raw materials, utilities, and labor are all subject to change. Why then would you calculate the lifetime value of customers without taking profit margin into consideration?

This also represents the actual financial gain that can be expected from a customer in the long term. Customer lifetime value can also signal how viable current spending on customer acquisition is. If, for example, the cost to acquire a customer was $100 and you calculated CLV as $200, in terms of revenue, you might feel secure in your business model.

Recalculating CLV after reading this article you discover your profit margin cut this number down to only $80. So, you’ve been spending $100 to acquire a customer, but only estimate you will make back $80 over the life of the average customer. This is the sign of a business model doomed to fail.

In the visual below, CleverTap recommends expressing customer lifetime value in terms of real earnings and includes tips to increase your customer lifetime value.

calculate customer lifetime value example

What Percentage of Total Revenue is Spent on Marketing?


There are a lot of different ways that people will ask the question posed in the headline to this post.

  • What is your marketing ROI?

  • What is your marketing contribution?

  • How efficient is your marketing spend?

And depending on who you are, and what your company norms are, you may answer the question in a variety of ways. Some companies prefer to see marketing spend expressed in cost per customer acquisition terms. Others want to know how much revenue is generated for every dollar spent on marketing.

But one core metric that every marketer and business should know is how much money you’re spending on marketing relative to total revenue. It’s a metric that you are likely to see in most business courses, one that tells you how effective your marketing dollars are being spent.

The Calculation

How we calculate this number should be quite obvious, and not altogether difficult. Do you know what your total marketing spend is? Good. Do you know what your total revenue is? Also good.

Simply divide the total marketing dollars spent by the total revenue generated, and multiply it by 100 to express that number as a percentage. And there you have it.

The Meaning

Now that you have your percentage, you need to know what it means. Are you doing a good job or aren’t you?

The percentage that you’re looking at is the best way to determine the overall effectiveness of your marketing budget. If you are spending money in the right way, in your efforts to drive sales and grow the business, then that number will tell you. In the same way, if you are spending money inefficiently, it should tell you.

If the percentage you get when you do the calculation is 50%, that means that you are generating roughly $2 dollars for every dollar that you spend on marketing. You may think that sounds like a good deal, right? The problem is that marketing, although it may represent the highest cost center in the business, is not the only cost a company must account for.

Therefore, if marketing is generating $2 for every dollar spent, there is only $1 left over for finance, and customer service, and product development, etc.

The Target

So that leads one to ask, what percentage of revenue should you spend on marketing? Is my percentage high or low?

The target should vary from company to company and industry to industry. Some companies and some products will have lower costs than others, and therefore can dedicate a higher percentage of overall expenses to bringing in new customers. But margins matter, no matter what business you are in.

A baseline average across industries, according to most textbooks, is that you marketing expenses should not be higher than roughly one-third of total revenue. Aim for 30%.


Understanding how efficient your marketing is matters if you want to ensure sustainable growth. If you spend too much on marketing and don’t get enough revenue in return, you might lose money as you grow.

Calculate how much you are spending on marketing as a percent of total revenue and adjust your strategy accordingly.

Applying the 80/20 Rule to Search Keywords


Whether we are talking about paid search or organic SEO efforts, not all keywords should be treated equally.

If we apply the 80/20 Rule, which states that roughly 80% of the effects come from 20% of the causes, to your search keywords, we assume that 80% of all traffic to your website will come from just 20% of your keywords.

In truth, if your company is like the majority of others, the ratio is a bit more dramatic – closer to 90/10.

Prove It

At this point, some of you will not believe me. Others will have already heard this before.

Regardless of how you feel about the numbers provided above, it is important that you find out the truth for your business. And there are a number of tools available to help you do just that.

First, you can go to the person responsible for your SEO and PPC. Those may be two different people. They may be people outside of your company. Regardless, the tools that they use to track and optimize their efforts will have all the information necessary to judge what percentage of all the keywords they’re targeting bring in the majority of search traffic.

For those of you who are doing this for yourself, you can use Google Ads or Google Analytics reports to find the true ratio for your company. Look at the last 30 or 90 days and export a full list of the keywords that brought in traffic. Sort it from highest to lowest and then simply do the math.

How many keywords, out of all the ones searched, does it take to get to 80% of all traffic?

Why Does it Matter?

Now that you have proved to yourself, and your boss, that the majority of search traffic is coming in to your website on a limited number of total keywords, it’s time to let that inform your decision making.

A lot of efforts are focused on keyword expansion. And while this strategy is not misguided unto itself, the numbers above should suggest to us that this is not always the wisest initial option. The much bigger impact can be made by focusing your efforts on the keywords with the highest traffic.

You can capture even more traffic from those keywords – or acquire the traffic more efficiently – in a number of different ways.

  1. Why pay for the traffic if you can get it for free? If you know which keywords you’re spending the most money on in paid search, you should start targeting those keywords in your SEO efforts. If you can turn paid traffic into organic traffic, you save money that you can put toward other uses.
  2. Find out who is outbidding you. It’s likely your competitors are driving traffic from those very same keywords. But if you know who they are and what they are doing, you can compete and win a higher percentage of total search traffic.
  3. Rise up the first page. You may already be getting organic clicks to your site from high volume keywords if you are on page one. But that doesn’t mean your work is done. With each position you rise toward the coveted top spot, the percentage of total search traffic goes up almost exponentially. So don’t settle for page one, aim for position one.

What if Traffic isn’t the Point?

Traffic isn’t always the point. In fact, unless you are a publisher that derives their income from ad impressions, traffic is rarely ever the point.

Your aim is something else. Conversions.

Whether conversions mean leads, sales, donations, contacts, or anything else, you want traffic that takes action. And so instead of measuring which keywords lead to the most traffic, simply measure which keywords lead to the most conversions, using the same tools discussed earlier.

By gaining a deeper understanding of where your best traffic is coming from, you can refine your search efforts and spend your time on those activities that truly move the needle.