Organizations often use broad “wants and expectations” to create a storyline for success and then decide how to fulfill these goals later. Let’s say an organization wants to increase their company’s awareness in the online community by 50% by the end of next year. They already have marketing tactics they want to use, but do not know how to determine the efficiency and effectiveness of their efforts. The storyline for success is there, but the components of analysis are absent. Companies must measure performance through both financial and non-financial metrics to fully analyze and track success.
In this series, we will help define these struggles of measuring success and the best ways to improve your success into the future.
What Is Success?
In business, the typical measures of success are commonly understood to be: increased awareness, prospects, opportunities and eventually sales. However, sales are not necessarily the greatest measure of success. Some of the best ways to improve your website success is through the use of basic, best practice business operations. For example, routinely utilizing SWOT analysis, evaluating your company/product value proposition and comparative analysis is essential in understanding your company’s positioning with respect to your competition. These few steps are essential in determining where to focus your efforts to drive the success of your company, which then allows you to decide which success measurements to integrate within your overall website strategy.
How Do I Measure Success?
Organizations use Performance Measurement to supplement the tracking of Key Performance Indicators (KPI). Performance Measurement helps assess a company’s success in comparison to their overall strategic goals by using data and analytics to determine if the agreed upon KPI’s are being met and/or exceeded. KPI’s are predetermined, quantifiable, trackable goals that are typically tied directly to a company’s performance. In order to accurately measure performance, members of your organization must agree on your KPI’s in order to track visible progress against them throughout the year.
Measuring success is SMART… literally! SMART components of an effective KPI are:
Specific: The KPI pertain to the goal of the organization
Measurable: The KPI allow the organization to assess its progress
Achievable: The KPI are realistic in terms of the business environment
Relevant: The KPI directly link the business and the metrics
Time-Sensitive: The KPI place goal achievement in a certain time frame
All forms of information that can be gathered from your website, should be gathered. This information is pertinent to current success rates and future growth opportunities. Information can include the number of visitors to your website, how long they were on your website, the number of referrals, number of links to your website, number of forms filled out, average click throughs, site loading time and so much more. (Google Analytics is a great resource.)
Once information has been collected, it then needs to be analyzed and correlated against your KPI. The most current and relevant information will have the greatest impact on your initial results. Then you need to ask the right questions. The right questions will be different for each company, but some common measurements of success might ask:
- How does my number of website visitors compare to the competition?
- Does it correlate to my KPI selection?
- Is there improvement from last year? Last month?
- Are these successes organic or influenced through change?
- Do the results meet my anticipated return on investment?
Regardless of whether or not your website is an eCommerce site, KPI and information-gathering are always important steps in measuring your success.
How Do I Measure Success For My eCommerce Website?
The first Performance Measurement to come to everyone’s mind when thinking of eCommerce success is of course, sales. Though sales are important, they are not a measure of standalone success. Revenue is not impressive unless it coincides effectively with all other variables. These variables include basic business components such as fixed and variable costs, overhead, production turnaround times, and every financially influenced value you can imagine. These numbers must be configured correctly to influence adequate profit margins in respect to sales.
Ecommerce companies must measure the success of their operating practices, tools and website performance results in correlation to sales. Some of these results include the conversion rate of site visitors that become sales, completed abandoned shopping carts, return customer percentages, average transaction values and product reviews. Each value is important and has an impact to the success of an eCommerce business.
How Do I Measure Success For My Non-eCommerce Website?
Success in a non-eCommerce organization is more difficult to understand initially, but can be simplified: Giving quantitative value to variables in your company and its website allow you to measure the success of non-eCommerce driven organizations. For example, a 15% increase in website visitors in the month of July would be a quantitative value that acts as a measure of success. A few important measurements of success can include:
- An increase in customer awareness
- An increase in click rate
- An increase in referrals
- A higher number of filled out forms
- An increase of email-opens rate
- Better search engine results
- An increase in site visitors
- An increase of the amount of time a visitor spends on the website
How Do I Continue Success?
Specific value metrics and KPI’s help establish what items to measure. These metrics become a data log of information to help define past performances of your company and help visualize strengths and weaknesses. This information should also be analyzed to determine the best variables to test for future growth and success.
We will explain what to test on your website as well as when and how to test for success in our upcoming series of articles. We will cover everything from determining the best tools and testing methods to the length of time to test, and much more. Until then, if you have any questions or would like to share success metrics that work for you, please let us know. There are endless combinations of success measurements, but please share what has worked best or has not worked for your organization. We will include/correlate your answers in our future articles.