Direct or Search? Organic Search or Paid Search? Social Media or Email? All of the above or All of the above? Understanding which digital channels are most effective at acquiring valuable customers is difficult to do on a regular basis. However, channel analyses is necessary so your business an answer questions like, “Where should we focus our new advertising campaigns?” or “How can we quantify how the last campaign performed?”
Let’s take a deeper dive into how we can use data to drive channel analysis. In a previous post, we discussed three simple metrics for an omni-channel business: Percent of customer acquisitions, lifetime revenue, and repeat order probability. Knowing these generalized metrics are crucial, but what else can we uncover? For this post, we will discuss some additional digital channel metrics you should be considering when analyzing customer behavior.
Sessions
Identifying the channels that drive the most traffic can help you determine where to focus your next marketing efforts. At the same time, you should be asking yourself “Is any of this information surprising?” Did you expect certain channels to perform better/worse relative to the others? In the example below, you can see how much traffic came in through each channel where the majority of customers are from direct channel. You can get a good sense of how your customer base is growing by comparing this to changes from the last period or year.
| Channel | Sessions | Change from last month | Change from last year |
| Direct | 15,318 | 205.49% | 433.12% |
| Organic Search | 3,988 | 30.22% | 1.09% |
| Paid Search | 2,104 | 4.06% | 130.03% |
| 587 | -40.95% | -10.11% | |
| Social | 120 | -20.44% | 52.72% |
Conversion rates
We can’t get the whole story from Sessions alone. After all, high traffic can only go so far if the conversion rate is low. Using the same example we can see that although the sessions for email are low, it has by far the highest conversion rate and has gone up 46.23% since last year. Does this mean you should focus all of your efforts on improving your email campaigns? Probably not, but it should get you thinking on how to slowly increase the traffic coming in through emails. Direct on the other hand drives the most traffic but has one of the lowest conversion rates.
| Channel | Conversion Rate | Change from last month | Change from last year |
| Direct | 0.29% | -90.11% | -83.30% |
| Organic Search | 1.87% | 7.14% | 14.35% |
| Paid Search | 1.33% | 1.90% | -3.55% |
| 6.28% | 2.71% | 46.23% | |
| Social | 0.21% | -90.41% | -93.63% |
Revenue by channel
Now that we’ve looked at Sessions and Conversion rates, we’ll last take a look at revenue. Some patterns we’ve seen so far in this example:
- Direct brings in high traffic but low conversion
- Email brings in low traffic but high conversion
- Organic and Paid search performs somewhere in between
Bringing in revenue will now help us paint a better picture on what the data is really telling us. Direct traffic has grown the most over the last year but still does not bring in the most revenue. Even though email had the highest conversion rate, paid search still generates more revenue just due to the higher traffic.
| Channel | Revenue | Change from last month | Change from last year |
| Direct | $7,497.44 | 205.49% | 433.12% |
| Organic Search | $9,240.32 | 30.22% | 1.09% |
| Paid Search | $4,663.00 | 4.06% | 130.03% |
| $2,699.20 | -40.95% | -10.11% | |
| Social | $460.83 | -20.44% | 52.72% |
In Summary
If you’re a business with an online presence, performing channel analysis is an important step to increasing your customer acquisition and retention rates. Your data may tell a different story and how you decide to interpret and act on this will depend on what your goals are as a business.
These are just a few example of how you can analyze the performance of your various channels. If you’re interested in exploring this further, contact us today!
