BuildDirect, a global online wholesaler and specialty retailer of building and construction materials in Canada, relies heavily on search marketing, spending substantially on generating traffic from many sources.
But simple reliance on search ads wasn’t enough. Higher visitor volume at www.builddirect.com was great, but the Vancouver, British Columbia, company needed to focus on conversions: Which traffic is quality and which is junk? Traffic that doesn’t convert does little good.
BuildDirect previously had no way to measure how customers and potential customers used its site: where they went, what they clicked on, when they bought. Measuring any sort of ROI on the company’s online advertising was a dream.
Then, in fall 2004, BuildDirect turned to Urchin, Google’s Web analytics service, which offered insight into not only traffic volume and source, but also quality: How much of that traffic turned into real sales?
The initiative paid quick dividends. Immediately after implementing Urchin, BuildDirect eliminated 18 percent of nonperforming keywords and dropped some traffic sources entirely, reducing search marketing spend 33 percent without affecting revenue. The company then raised bids on the best-performing keywords and within a few weeks increased conversions 37 percent.
In short, gauging visitors by conversion let the company reduce its online spend while boosting revenue and profit. Conversions have risen more than 60 percent in less than nine months.
BuildDirect next turned to e-mail campaigns, quickly learning via Urchin that its purchased e-mail lists produced almost no revenue. It was sending 600,000 to 800,000 e-mails at low cost, but getting only 1 percent or 2 percent of those recipients to its site, and turning very few of those into customers.
Urchin showed, however, that targeted online newsletters sent to a well-qualified opt-in list performed phenomenally well. This program soon converted three times better than general pay-per-click marketing. Now BuildDirect uses pay-per-click to drive sales and newsletter signups, compounding the value of both pay-per-click and e-mail campaigns.
Next up was site analysis. Urchin’s funnel-analysis reports, which let users see where site visitors are clicking and whether those clicks result in sales, helped BuildDirect determine that the site’s checkout process had too many outbound links. The company immediately reduced the checkout process from three pages to one. Conversions went up another 43 percent.
But BuildDirect still wasn’t done. Urchin’s Site Overlay report revealed that visitors who purchased a material sample became customers at a much higher rate than average. So BuildDirect began adding samples at every appropriate online location and streamlining the orders received as a result. Initial indications are that these adjustments are leading to another strong boost in revenue.
The advantages of these types of midstream adjustments transcend sales. A streamlined Web site and improved targeted marketing reduced BuildDirect’s hiring needs and lowered its average cost per sale.
A few years ago, most sales were closed over the telephone and Web sales represented less than 10 percent of order volume. Web sales now account for more than 50 percent. Metrics have been the key to improving BuildDirect’s operation, which is essential for an online-only company.
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