Practical Ecommerce

An Analytics Consulting Model for Small Businesses

Editor’s Note: This article was originally published by Web Marketing Today. Practical Ecommerce acquired Web Marketing Today in 2012. In 2016, we merged the two sites, leaving Practical Ecommerce as the successor.

How Things Stand for Small Business Web Analytics

Here’s how I see it in a nutshell:

  • Nearly all small businesses have a measurement system in place for their website (though too many aren’t aware of the analytics data available from their web hosting service for no additional cost).
  • Good to excellent web analytics tools are now available for small businesses for free or at low cost, so no one can say these days, “I can’t afford the software.” In particular, Google Analytics (www.google.com/analytics/) is within reach of nearly all small businesses.
  • But small businesses just aren’t able to do much with the data at their fingertips.
  • Because larger businesses use analytics and testing and small businesses seldom do, the performance gap between large and small business profitability becomes greater every year.

Why Consultants Are Needed

The gap, in my opinion, is because small businesses don’t have a person on staff who has the training, the time, and the focus to gather, analyze, and act on the data, resulting in improved efficiency of the website and higher conversion rates.

Here’s my conclusion. Small businesses that “get it” and really are willing to pay the price to improve must find and engage competent and creative web analytics consultants for several hours per month.

Reports. Frankly, you don’t merely need expensive analyst reports on what’s happening on the site or in sales. They’re important, but that’s merely maintenance. Google Analytics and most other professional analytics packages can be set up to e-mail you regular reports. Reports, properly configured, may alert you to problems, but reports alone will not move you forward.

Analysis. Consultants need to be engaged to:

  1. Study your data regularly over a period of many months,
  2. Make recommendations for how to improve your site and online sales,
  3. Design and implement tests that can determine whether these hypotheses are accurate, and then perhaps
  4. Help you implement the changes on your website, if you don’t already have a web designer or webmaster who can do that for you.

A Consultant Model

Here’s a possible shape that a web analytics consultant contract might take:

Hourly rate: $75 to $200 per hour. This may sound like a lot of money, but we don’t flinch when we take our cars for repair. Well, we may flinch, but we do it because we must. A consultant’s hourly rate will depend upon experience, the number of hours contracted for each month — and, frankly, exposure to large companies that expect to pay higher hourly rates. If it makes you feel better, compare consultant costs to the lost opportunities and the potential gain. Getting a good consultant should make you many, many times more than you pay, so long as your business has potential.

Set-up Phase. When you first engage a consultant, he or she will want to set up your analytics package so that provides the data that will be most helpful to your kind of business. This might include determining appropriate KPIs (Key Performance Indicators) for your company and setting up reports that can be generated automatically. This phase might take 4 to 6 hours, more or less, depending on your business and the current state of your analytics.

Monthly Analysis. I recommend that you engage an analyst for 4 to 10 hours per month to study your data and make recommendations. This is time consuming, hard work. Unless you have the training, you won’t be able to dig deep because you won’t know from experience where it is most productive to dig.

Testing Cycles. Two to four times per year you’ll want your analyst to run tests that you and your analyst agree upon. These tests will typically help you optimize your landing pages, navigation system, user interface, etc. Setting up tests is time intensive, and typically includes test design, graphics design, page layout, and then analysis of the data once you have collected statistically significant data. The results might then suggests a couple of other tests to optimize a page. Such tests might take 20 to 40 hours per cycle.

Here’s how this might look in terms of dollars.

$75 per hour $125 per hour $200 per hour
Set-up Phase (one-time only), 4 to 6 hours. $300 to $450 $500 to $750 $800 to $1,200
Monthly Analysis, 4 to 10 hours per month $300 to $750/month $500 to $1,250 $800 to $2,000
Testing Cycles, 20 to 40 hours per cycle $1,500 to $3,000 two or three times per year $2,500 to $5,000 two or three times per year $4,000 to $8,000 two or three times per year.
Annual Costs  $6,900 to $18,450 $11,500 to $30,750 $18,400 to $49,200

This model, at least, provides you a way to look at the task and discuss it with an analyst, though you and your analyst may want to change the approach to suit your needs better.

I believe that a small business owner who hires a analyst on this sort of basis will look back a year from now with profound appreciation for how far they’ve come. Yes, it’s expensive. But the payback for most small businesses will be 10-fold to 50-fold or more on their investment. That encourages me. What discourages me is that way to many small businesses are so short-sighted and cheap that they choose not invest in web analytics consulting and are thus doomed to maintain the status quo — and fall behind their competitors.

The final piece of this solution is finding an analyst who is both competent and open to working with small businesses. The Digital Analytics Association (www.digitalanalyticsassociation.org) might be a potential source of small business consultants, though their current job board deals only with full time employment positions. Google has certified a number of Google Analytics Authorized Consultants in various countries (www.google.com/analytics/support_partner_provided.html).

Dr. Ralph F. Wilson

Dr. Ralph F. Wilson

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