The Importance of Web Analytics and Measurement

Measurement is a fairly easy concept, yet web marketers and site managers often still have a hard time wrapping their heads around it.

There are so many data points you could track, that sometimes it’s hard to know where to start or what the purpose of measuring is if you don’t know what to do with the information.

Why Measure
Measurement leads to informed decisions. If you follow your gut without using data to back decisions, you can easily continue to waste time making the same mistakes over and over again. Sounds simple enough, right? Yet many web marketers continue to make decisions based on what their gut tells them.

Don’t guess! If you don’t measure, you can’t improve. You may be wasting $50K a year on an advertising campaign that has a horrible ROI. Or, you may be sending email campaigns that drive 15% of your online sales, but find that you could increase that even further and earn an extra $10K in revenue each month, just by optimizing your offers and featuring different products.

Web analytics are powerful, IF you know what to measure and how to make decisions from that data.

What to Measure
Every website should have a set of key performance indicators (KPIs) that they continue to measure over time and use to compare to previous time periods. Common KPIs for most industries are:

  • Visits
  • Bounce Rate
  • Transactions (or Conversions, such as form completion or content download)
  • Conversion Rate
  • Revenue (or Goal Value)
  • Revenue per Visit (RPV)
  • Average Order Value (AOV)

These core KPIs are a great place to start, but you should be tracking deeper into each channel and measure other data points that will help explain customer behavior, such as number of customer service calls, search volume, spend and revenue from online ad campaigns, etc.

To determine this, start by identifying your overall business and marketing channel goals. Then pinpoint what is it you need to know or answer to achieve those goals, and which metrics will help you answer those questions.

  • Which banner performed best in your spring ad campaign?
  • Should you cut spending on retargeting?
  • How many emails should you send each month for optimal conversion?
  • What are visitors clicking (or not clicking) on a specific page?
  • What content should be added to your site that visitors want to know?
  • Which products should you merchandise on the homepage?

How to Use Data
If you identify, for example, that a large portion of your site traffic is new visitors coming through paid search marketing, you can focus on this group of people. You may find they convert at a much lower rate than returning visitors. Why is that? You could guess, or you could use a scientific approach to formulate a hypothesis, dig deeper into the data, design a test and evaluate the results to find a solution.

For example, these visitors may often land on a specific web page and bounce after spending little time on page. You might test a new layout, different copy or better calls to action and determine that by making the page more user-friendly, you increase conversion rate for these visitors.

Data is powerful when you know how to use it. Start small and track data over time to understand trends and behavior. From there, you can work into more advanced tactics.

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