This post was guest-written by Matthew Lawson, Web & SEO Manager, DRL Limited (Appliances Online).
In selling UGC to your executives internally, proving ROI is crucial. Focussing only on the end of the purchase path – the final sale – doesn’t tell the full story of your UGC benefit.
While it can be difficult to do, understanding customers’ online shopping habits is highly valuable for brands. Studying search to determine how customers travel through hundreds of products and categories can reveal insights worth their weight in gold.
As consumers search for products online, they commonly fall into three main “buckets.”
Researchers – these searchers have a need, but they’ve only narrowed it down to the product category, such as “washing machines.”
Browsers – these searchers have narrowed their query to the next level, and have started to apply their desired product attributes, features, and maybe even brands. They might search for “black Hotpoint washing machine.”
Shoppers – these customers have done their researching and browsing, and have decided on the specific product model they want to purchase, searching for “Hotpoint WMD960K Black Washing Machine.”
Breaking your customers down into these groups tells you something about their specific needs and motivations. Searchers in the Research stage, for example, are less likely to buy during their visit than those in the Shopping stage. By examining the search queries driving traffic to your site, and categorizing them in the same way, you’ll find that conversion rates for and revenue generated by Shoppers is significantly higher than Researchers.
This probably doesn’t come as a surprise. But traditional analytics attribute too much of the sale to that final Shopping stage, ignoring the work toward a purchase done in the Research and Browsing stages. Engaging searchers in these stages does the ground work, building the brand and making visitors more likely to return later as Shoppers and convert.
How can you do these early search stages justice, and show the ROI of UGC in every phase of the purchase path?
The illustration below shows the click path a searcher may take in researching and shopping for washing machines. Traditional analytics would attribute all revenue of the final sale to the last click – in this example, a PPC ad. Attributing revenue in this way gives no credit to the hardest working traffic –searchers in the Research and Browsing stages, brought to your site organically by your UGC.
To show the true value of social commerce, this revenue should be split among the various stages of search. Attributing 30% of revenue to the first click, 50% to the last click, and spreading the remaining 20% equally across the middle clicks, gives a more rounded and holistic picture of your search traffic and its value – and demonstrates the ROI of UGC on your site.
This model also opens opportunities to more cleverly target visitors in each search stage, allowing you to attribute value to previously unprofitable methods of marketing, such as generic PPC bidding.
On Appliances Online’s kitchen appliance ecommerce site, we found that the majority of traffic generated by our customer review microsite were searchers in the Browsing phase of their buying cycle. Attribution modeling, compared to attribution based on the last click, attributed 18.4% more revenue to the review microsite.
If you’re having trouble selling the business value of UGC internally in your business, attribution modeling makes it easier to prove the ROI of customer feedback.