3 Web Analytics Questions to Ask Before Buying a Company

I got an email from an entrepreneur contact of mine. He’s smack in the middle of the process of due diligence for the acquisition of an internet marketing property.

He wanted to include a web analytics as part of his due diligence questionnaire and asked if I had a checklist.

Having not gone through the process, I wrote up a few quick bullet points that I thought I’d share with you.

3 Web Analytics Questions to Ask Before Buying a Company

1.) What tool(s) are you using to measure and optimize your site? What process and personnel are you dedicating to use data to grow your business?

The goal here is to understand their relative dedication or lack thereof to continuous improvement.

There is a range of 7 possible responses here:

1. The analytics ignorant won’t have or know what tool they’re using. Be afraid, be very afraid.
2. The vendor-dependent might simply have reports from their partners, but not invest in site-side tools. That’s can be a problem when you switch vendors or consider campaign attribution.
3. Some might be relying on something in-house or what’s baked into their ecommerce platform or content management system. Tread lightly here, as these will vary wildly in sophistication.
4. An internet unsavvy organization might have slapped up one of the free or inexpensive, but have done little to act on the data.
5. A business with an average level of sophistication will have one or more tools and 1 person for whom part of their job is to use web analytics data.
6. More sophisticated marketers will actually dedicate 0.5+ full-time employees to analysis and likely be using a suite of tools, including one core web analytics package.
7. The most advanced will have great talent, good tools and a process for regularly analyzing and optimizing their site and marketing.

2.) Please provide a monthly breakdown for the past 2 years of traffic (unique visitors and visits), conversions (business outcomes) and value (revenue, if applicable) for all major categories of traffic: direct/typed in, organic (natural) search, paid search, email, affiliates, referring sites, etc.

The goal here is to understand where their traffic is coming from and how it’s growing. You may find they are lacking in an area of opportunity.

Not all business are or should pursue every channel. Strategically, you should be where your customers and prospects are, especially if your competition isn’t.

Competitive intelligence tools can give you a sense of how a site stacks up against the competition, but only the business own analytics will give you a fine level of detail.

It’s important to understand recent trends and ROI (or lack thereof) of their different acquisition and retention investments. It’s like buying a house: you could be getting a bargain or be sitting on a rotting foundation.

Caveat: if they’ve done a poor job of configuring their web analytics, these data could be useless. You can tailor this question to their business model.

3.) Are you using qualitative data (surveys, voice of the customer), user experience testing, a/b testing, multi-variate testing, on-site behavioral targeting or other systems to optimize your site? If so, describe the projects and results.

The goal here is to probe into how well your target acquisition has used all of the possible tools to boost results.

That’s not to say that you you need to have used all of them to be a good internet marketer. At the very least, they should have an awareness of these options. It’s even better if they’ve used one or more of them and can show a history of data-based optimization and improvement.

Of course, you could look at it on the flip side: an established, but unoptimized site could mean immediate boosts by addressing quick wins in the first 3-6 months.

Beyond that, I’d want to know about the cost-effectiveness (ROI) of each of their major initiatives for the past year and plans for the upcoming year.

If you were buying a company, what web analytics questions would you ask as part of your marketing due diligence?

Tagged as: due-diligence, marketing-due-diligence, Strategy, web-analytics-due-diligence