The concept is called visitor segmentation: grouping visitors into segments according to specific actions you are trying to measure. You could segment visitors based on any number of factors, such as new versus returning visitors, paid versus organic search traffic, or converting versus non-converting users. The possibilities are virtually endless and the insights are absolutely valuable.

"Segmentation is not a new idea in traditional marketing," says John Squire, senior vice president at Coremetrics, an on-demand Web analytics and marketing solutions vendor. "The idea," Squire says, "is to target the people who have a high likelihood of becoming long-term customers. You have to find out what it takes to get them interested, how they use the site and what it takes to turn them into customers."

Such is the value of Web analytics. When you tap into these metrics, there are no expensive market research studies or demographic studies to conduct. No focus groups to gather. No surveys to execute. It's all right there in the data. Your job is to properly segment the data so you can clearly determine which business opportunities you could be cashing in on.

An Essential Tactic

Visitor segmentation is the first essential tool for producing crisp metrics and analysis, says Gary Angel, president and CTO of Semphonic, a Web analytics consultancy and search-engine tool provider. What's more, he says, visitor segmentation is fundamental to understanding what each piece of your Web site is supposed to accomplish. From his view, there is almost no Web analysis problem that doesn't require a visitor segmentation first.

"Almost every Web site serves a variety of constituents with different interests and concerns," Angel explains. "Judging how well a Web site is performing demands understanding of how well each piece is serving the appropriate set of visitors."

Web sites are especially prone to misinterpretation because they often draw many unqualified or misdirected visitors. This traffic typically distorts almost every "average" or key performance indicator (KPI) on the site, including conversion rates and reach metrics. Segmenting the visitors helps avoid this scenario.

Defining Visitor Segments

The visitor segments you choose are inherently business- and industry-specific. They are also specific to a certain kind of analysis. For example, if you are looking at the effectiveness of a particular area or tool on your site, your visitor segmentations will often revolve around usage of that tool. (continued...)

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