7 Rules for Keeping Web Analytics Relatively Simple

Okay, let's be honest, 6 out of 10 web sites fail miserably according to a published Forrester report way back in 2003. Not surprisingly, some things change while others remain the same.

The unfortunate part about web site management is that Web sites fail.

But web sites often fail because they are simply mismanaged. Even after 10 years, there's still a lack of understanding around the channel.

So long as conversion rates hover at 2.5% there's still a lot of stars to be earned. Site managers still can't readily identify key performance metrics on their site.

Are you recovering from your 3rd redesign in two years?

Sorry to say it, but you aren't managing your business. Don't feel too bad though you are in the majority.

You can prevent this from occurring by simply focusing on Optimization in '08. Stop recovering! Stop building!

Getting More Out of Your Website through Website Optimization and Conversion

Let's define Web Site Optimization as the framework for identifying, analyzing and correcting potential problem areas on your site.

The smart site manager restricts these "problem areas" to activities that either generate profits or reduce spend, i.e improve the percentage of completed forms, increasing the number of site registrations, decreasing home page abandonment, or increasing the number of newsletter subscriptions.

Creating a Better Framework for Managing Your Website

It was really less than a decade ago, that logfile analysis was the only way to manage web sites, but in fact, most logfile analyzers were developed to measure server activity, not business performance.

Web analytics has changed how we measure the online business, creating new opportunities to better understand customer interactions.

If you really want success. Define it. Then work towards it.

Below, I've outlined what may be considered a framework for better managing and optimizing your site.

Rule 1 Prioritization
What are you trying to optimize? Start small. Develop your objectives early so you don't waste a lot of valuable time. Prioritize those objectives around activities that provide the greatest value and where possible the least amount of effort. If you try to optimize everything, you won't accomplish anything.

Rule 2 Apply the marriage of metrics
Develop key performance metrics around what you want to improve. Its okay to use universally accepted KPIs to run your business, but eventually you'll discover those that are unique to your needs.

Rule 3 Understand Your Own Business Model.
You'd be surprised at how often site managers don't know this. There are really 4 business models; Lead Generation, Content, Commerce and Self Service. Many websites are complex hybrids of all four.

Rule 4 Establish Site Benchmarks and Set Targets
After a few weeks of collecting data and defining problem areas, you'll need an understanding of where you are, before you can determine where your business can go.

Rule 5 Change Management
All of the data and performance metrics in the world won't help you if you don't take action. Don't let the sheer volume of reports you can run be your only success metric. Be aggressive. Stay focused.

Rule 6 Get the Right Web Reporting Tools for the job.
Find the right tools for the right job. There are many site management tools with strengths and weaknesses. Look to acquire those tools that truly fit your understanding of the business.

Rule 7 Hire Experienced Talent
Hire smart. They won't come cheap. Experienced analysts can generate salaries north of 100,000.

Look for web analytic professionals to measure and manage your site with at least 3 to 5 years of experience. Ideally, that person should be as familiar with reporting tools as he or she is with managing projects.

The ROI of Web Page Redesign

I've been asked the question several times over by both client and workshop attendees alike. It starts off something like this: "We are thinking about redesigning our Internet or intranet. What tips can you provide us?

As tempting as redesigning your site is and trust me, we've been down that road, it's usually a sure formula for disaster.

Four Reasons Why Redesigning Your Site is a bad idea

I'll give you 4 reasons why there is almost never an ROI for a complete redesign of your site and specifically why identifying key action areas of your site may ultimately help you reach your business goals faster than a redesign ever would.

#1 Complete Web Page Redesigns Can Actually Hurt Your Business

The immediate results of redesigns are almost always tempered with a lack of long term results.
Its true. You may see a temporary interest or climb in visitation, but it will likely be short lived. A redesign often adversely affects your conversion metrics.

Further, if you have been actively collecting user data from your site, you can essentially throw those numbers away. New Site=New Data often spells new problems.

I've seen redesigns that actually reduce revenues specifically because redesigns often affect search engine placement, at least temporarily. Practically speaking, web sites are inherently flawed. Don't take the risk. Think about realigning processes, not redesigning them. You likely haven't exhausted all of your available options. Be creative. Collect data about your processes for a few weeks. Let that be the litmus for change.

#2 A Web Site Redesign can be Costly.

Redesigns often costs thousands and proper programming can cost you even thousands more, which means you essentially have to recoup those losses before you can begin to calculate any significant ROI.

You'd be better off developing better landing pages that convert your visitors at higher rates, targeting your sales messages through segmentation, optimizing your homepage, or investing in pay for performance channels to help drive traffic to your site.
Do just about anything to avoid the final nail in the coffin of a redesign.

#3 Measure the effectiveness of areas on your site that help you drive business first!

Often its not the entire site that needs an overhaul, but rather the processes that connect it. Before considering a redesign, start by documenting key process or action areas of your site. These areas are often tied to things such as registration, promotional areas, entry pages, shopping carts, product pages, your homepage, forms, content pages, etc.
Measure the activity of these key areas. Are your customers abandoning your shopping cart on Step 2 of the registration process or are your call to action links simply not compelling enough? Consider the purchase of web analytic software to help you better manage your business.

#4 A Complete Web Site Redesign May not Actually Solve Anything.

If you want to better understand how your web site is performing, consider using funnel analysis to help you identify bottlenecks. Try surveying existing customers that did purchase from you to find out what was and was not compelling about the buying experience.
Try an overlay tool to help you visually understand customer behavior on your site, as well as the revenue impact of your links.
Sample with A/B testing and prove that one page design is more or less effective than another.
Increase your revenue by up selling to existing customers or exploring customer segmentation models.

Avoid Costly Web Page Redesigns

Taking smaller, incremental steps and documenting change can help you better reach your business goals than any full scale redesign could. Invest the time in learning more about your existing web site now, you'll find it can help you both identify and manage strategic changes that positively affect your bottom line.

Web Measurement that Matters

It's been an interesting road over the past weeks. Now faced with mounds of data and the daunting job of learning new analytics tools. One good thing has occurred. In order to gain confidence in new business processes, I had to go back to class.

In my mind, there are several fundamental steps in ensuring effective Web Performance Management and here they are:

Ensure Tracking

Why would I include tracking? Its the nucleus of web analysis of course. The analyst relies on the efficacy of the data he observes through vendor tools. If the data is either erroneous or simply missing (perhaps undiscovered), he may make bad observations, or perhaps even more specifically, he misses opportunities; the fundamental objective of the analyst. Make sure your analytics tool can report on what you need. You may have to introduce a hack or two if needed, but get that data. Your conversion rates may rely upon it.

Further, poor observations can cost an organization thousands. Dare I say millions? No pressure. Many companies are willing to pay top dollar for blue chip analyts. They (companies) expect you to understand the nuances of effective vs. ineffective web tracking, independent of vendor selection.

Establish Benchmarks

No kidding on this one, right? Not so fast. When you've been analyzing and making decisions through analytics for awhile, you can to some degree predict success. Think about it. Ignore industry standards around email (2.5%) and direct mail conversion rates for a moment. What conversion rates are you used to seeing based on YOUR marketing efforts? Do your email conversion rates change depending on vendor? Offer? Audience? You say you aren't sure? Maybe its time to collect that information along with clickthrough and open rates? There are other metrics that take place offline that should be considered. Be sure to include them.

Set Targets

Another no brainer, right? How many organizations really set goals for themselves before they spend marketing dollars? Its irresponsible marketing, but we've heard it before. Start with the end goal in mind and work backwards. You have the benchmarks now set the targets. That may help you make better sense out of your marketing budget and better predict success. Is that Cost Per Lead allowing you to reach the black based on your spend or conversion ratios? Be sure to subtract marketing cost from your revenue goals to realize net profit. Finally, use your analytics tool to track ongoing success. Are you on target? Line that data up and then set alerts.

Identify the Metrics

At this point, most analysts should be familiar with identifying core metrics and setting KPIs based on the type of business model your site embraces. There are too many resources to illustrate so I won't cover them here.

Don't be afraid to create your own calculated metrics to help business owners better understand performance. At the same time, don't try to measure too much. More metrics doesn't necessarily mean better management. One final note, use the language that matters to the business. Don't call something a conversion if the business wants to call it a prospect. Don't call it a lead, if its really just a record. The language of online conversion is meaningless if it has no connection to the business.

Develop effective KPIs

I offer only one statement here. Keep it simple. Identify the levers to success. More often than not, measuring those things that affect money is a far far better use of the analyst's time.

Segmentation

There are many sides to the problem of analysis. The analyst should be able to identify top performing paths, referring URLs, keywords, affiliates, lead source, etc and tie that to online success or failure (mainly money). The analytic tool of choice should be able to help the analyst segment data/groups quickly (no 24 hour delays..apologies to some vendors). Segmentation is discovery. By its very nature it is often adhoc. If you want to manage your site's performance, you'll need basic level segmentation tools. No need to pick of that SPSS package just yet.

Share Results

Analytics is still so very new. To reference the title of Eric Petersen's book; 'Demystify Analytics'. Share data. Keep it in the context of business results and review marketing performance often. Set targets and reminders. Above all else, the analyst must share results and finally, make appropriate changes that make the metrics matter to the business.

Web Success: Think Process over Web Data

I recently changed jobs and with that change came a new level of accountability. Angst began to set in as I realized that my level of analytic responsibility increased nearly 2000%

How would I scale?

Under these circumstances, How can a web analyst improve the chances of success?

The answer is pretty simple: Maintain your focus on process, not data.

Every process has an opportunity for success -- and yes, some processes clearly have more value than others. Beware. Data paralysis has been the downfall of more than a few organizations. Therefore, work on the processes that will likely bring immediate impact. You think I am talking about ROI? Nah, 'RSS'.

What is RSS? Well certainly not Real Simple Syndication in this instance. R.S.S is an acronym for Revenue, Savings and Sales.

You want respect as a web analyst? Then, monetize every process you manage. Don't get me wrong, the concepts of conversion and KPIs are well meaning and serve a purpose, but what makes CMOs happy is the bottom line impact of profit.

Here's what I mean. Your web site currently has a browse to registration ratio of 6%. Very good. You've added that to your scorecard and you've done your job, right?

Your metrics are moving up? But you're not done.

You'll need to determine the financial impact of your change. Certainly improving the browse to registration KPI from 6% to 8% is a real milestone, but beyond the incremental change in registrations, how does that impact 'Money' beyond counting metrics?

Its time to monetize!

In this instance we are monetizing a non revenue event. Certainly increasing registrations by x has some sort of bottom line impact, right?

Turns out that every registration meant about $50. How did we figure that? Because, more often than not we purchased lists. A viable prospect could be purchased from a vendor at $10. We estimated that if the prospect was engaged by the brand we've added 5 times the value to that prospect. Who sanctioned this metric and its value? Never YOU the web analyst, but Management.

Ultimately, this is money you are now SAVING the organization. Improving the registration ratio from 6% to 8% not only meant 40,000 more registrants, it saved the organization $200,000 quarter over quarter. Now here's where it gets interesting. For every 1,000 registrants we acquired, we generated 1 lead. Okay the prospect to lead ratio was horrible, but a lead was valued at 100,000!

I know you love your job and I want you to keep it, but how much of your reporting efforts actually contribute to the bottom line?