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How to Use Metrics to Improve Your Website

How to Use Metrics to Improve Your Website

If you are a Small Business Owner with a website, tracking the results is critical to your success.  But…where do you start?  The attached post gives an excellent discussion of 6 basic metrics and how you can use them.

The 6 Most Important Web Metrics to Track for Your Business Website


In a previous post, I talked about the 10 best tools for tracking online analytics data for your business. If you’ve started to use any of those tools—in particular Google Analytics—the amount of data they can provide can be overwhelming. When you log in to Google Analytics, you’re faced with a sea of numbers, charts, and menu items. It can be downright intimidating to anyone but a seasoned analytics professional.

But, it doesn’t have to be as overwhelming as it looks. If you are new to web analytics, the key is to start with tracking some basic numbers. Once you get a handle on these key metrics, you can expand your data portfolio and build your expertise.

Here’s my list of the top six metrics you should be looking at on a regular basis:

1. Visitors

Crowd of people in street 2Specifically, I like to focus initially on unique visitors. This is the number of people that visited your site during a specific timeframe (e.g., yesterday, last week, last month). Unique visitors represents the count of individual people that visited your site regardless of the number of times they visited your site. So, if person A visits your site once and person B visits your site five times, you will have two unique visitors and six total visits.

These numbers are important because they represent the size of the audience that you are reaching. As you expand your marketing efforts, you will want to see if they are effective. This is especially true if you do offline marketing that can’t get tracked explicitly in Google Analytics. So, if you run a magazine ad in the October issue and don’t see a corresponding jump in visitors during that month, perhaps that portion of your marketing budget could be better spent somewhere else.

As you get a handle on tracking unique visitors, you can expand to look at repeat visitors. If your number of repeat visitors is growing, this means that people are visiting your site once and then deciding to come back again to shop or read. This means that your site was compelling and useful, or “sticky” in online marketing lingo.

2. Referrals

ReferralsAs you get a handle on your visitor numbers, your next question will be, “Where did these people come from?” The referrals report is the answer to that question.

Referrals track users as they click on links in search engines, on other blogs, and other websites to your web site. The referrals report will show the number of visitors you are getting from social sites as well.

Understanding where you traffic is coming from is the key to understanding how the work you are doing to promote your business is working. Are people mentioning you on their blogs and linking back to you? Are your social efforts paying off?

The referrals report is also useful to find other companies or blogs that you might consider forging a stronger relationship with. If you are getting traffic from a specific site, you might want to consider reaching out to that site and establishing a more formal relationship.

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3. Bounce Rate

A “bounce” is when someone visits your site and immediately clicks the back button or closes their browser tab. What this usually means is that that user didn’t find what they were looking for on your site and decided to leave. This is the equivalent of someone walking in the front door of a store, taking a quick look around, and immediately walking back out the door.

Obviously, sometimes people just end up on the wrong site by accident, so getting your bounce rate down to zero is impossible. But reducing the rate is critical. Every lost visitor is a lost opportunity, so you’ll want to figure out why people are leaving and try to add the right content or navigation on your site to keep users around.

If you combine the referral report with your bounce rate data (Google Analytics does this for you) you should be able to see what sites are generating the highest bounce rate. Unfortunately, Google is no longer sharing search term data, so you don’t get to see what search terms have a high bounce rate.

4. Exit Pages

Strategy - next exitPeople often confuse “bounce” and “exit,” but they are very different metrics for you to measure. Unlike a “bounce”, when a user visits your site and barely views one page, an “exit” is when a user visits multiple pages and then leaves your site.

Some pages on your site may naturally have a high exit rate, such as your order receipt page. After all, a visitor is probably done with their purchase if they have reached the order receipt page after successfully completing a purchase.

However, having a high exit rate on other pages on your site may indicate that you have some problems. Take a look at your pages that have high exit rates and try and hypothesise why a higher number of people than average are leaving your site from that page. Are they not finding the information they need? Why are they choosing to leave?

5. Conversion Rate

Customer handing over credit cardOf all the metrics you might track, conversion rate is probably one of the most important. Conversion rate is the percentage of people who achieved a goal on your site. Goals are things like completing a purchase, filling out a contact form, or viewing a certain page on your site.

The reason conversion rate is so important is that it is the ultimate measure of how successful your site is. If your site has a low conversion rate, you are either attracting the wrong kind of visitor to your site or your site is not effective at convincing your visitors that you offer the right solution to their problem.

Monitoring conversion rate can also tell you if something is broken on your site. For example, if your conversion rate suddenly drops, that might mean that there is an error in your shopping cart or a problem with your sign-up form.

6. Top 10 Pages

Finally, it’s important to know what pages your visitors think are the most important on your site. By viewing your top ten pages report, you know which pages to focus on as you look to improve your site and which pages will have the most impact if you make changes.

If you run a content site, your top ten pages report may change frequently. In this case, the report will tell you what types of content your visitors find most useful and engaging, and which headlines you’ve written were the most successful. Use this knowledge to help determine what kind of content to create as you move forward with growing your site.

Start Small

Web analytics and metrics can be overwhelming. The key to avoid drowning in the sea of numbers is to start small. Pick a metric that matters to you and your business and track that one metric and try to improve it. By focusing on only one thing as you get started, you’ll get a better feel for the numbers and how you can impact them. As you get comfortable, you can expand the metrics that you track.

For much more detail and help with web metrics, I highly recommend Avinash Kaushik’s books: Web Analytics: An Hour a Day and Web Analytics 2.0.

What web metrics do you track in your business? Let me know in the comments.

This post is a part of Small Business Tracking Week, sponsored by LivePlan and TSheets.

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Noah Parsons is the COO of Palo Alto Software, makers of LivePlan, the award-winning online business planning software. Follow him on Twitter. Follow Noah on Google+ 

Pick a Number…and Profit

Pick a Number…and Profit

As small business owners, we are constantly searching for data to tell us how well we are doing. One very effective tactic is to pick one metric and focus on it.  For instance, Southwest Airlines focused on being the lowest cost airline in the industry.  Here is a very interesting post on just how to do that. 

A single metric for business: Profit per x?

I’ve been profoundly affected by a book: Good to Great by Jim Collins which has studied hundreds of companies to understand what made some of those good and others great. The findings are just incredible and the way the book is written allows any business person to reflect on its own attitude and approach and try to pursue the path of greatness in business.

I won’t go into every points addressed in the book, although I wanted to call out one of the thing Collins noted: great companies have a very clear metric they were following relentlessly. It’s the denominator of the formula:Profit per x. Each of the great company had a clear profit per x. For example, profit per visit for Walgreen, profit per employee for Abbott, profit per region for Circuit city, etc.. It seems very simplistic but it drove billion dollars businesses’ strategy and became the heart of their culture. The shift of revenue metric from one denominator to another was often time the starting point of fantastic results.

As I was reading this I asked myself what could be the right denominator of a profit per x of a very small business, and how could this drive the strategy of the company. I was fortunate enough to run such a small business, Iniflux, in the past and I was trying to think what it should have been.

The first step is to determine what metrics we have and that is probably the biggest issue most small businesses are facing. When you are small, you often live day by day, each deal is important, be it outside of your realm of skills, focus is not a virtue, and because management is so close to the field there is no time to think too broadly about culture, strategy, hiring and investment. Accounting is outsourced to a CPA which role is mostly to help filling taxes and make sure the company pays the right taxes to the state and the visibility of the cost structure is very weak.

Building those metrics takes time initially but they are crucial to growing the business. You need to ask the right questions:

– What are my costs? How much does every employee cost really? What’s my total overhead cost (attributing overhead correctly is also very important)? What is my cost per profile of employee? per employee? per deal? What is my sale cycle length? by type of deal, by size of deal, by sales person? How much hours of each profile have been put in on each deal? How much do I spend in marketing? where? for what return? what is my support cost? How much is debt costing me? etc..

– What are my revenue? What margin do I make by type of product, by deal size, by sales guy? How much revenue by practice if you have several? by region? compared to last year? and the year before? etc..

The idea is to have a perfect picture of your cost and revenue structure. The goal of this exercise is not to just do it once but also to be able to track those metrics over time and see trends appear. Once this is in place, the company has to compare itself to the market, and comparable companies in particular if this data is available. For example, what’s a good revenue per Sales in the first year? the second year? Hopefully you will realize that you are good in certain areas and weak in others but overall, you will know, from now on, how to plan for the future. By understanding your core metrics, planning becomes much easier. Later you can always compare your plans with your metrics to see if you are on track. Another to know more is to talk! talk to other small business owners, go to networking events, ask questions, talk.. IT is in fact incredible to realize how much first hand conversation can bring, and often times how people are open to talk about their company and experience. Who does not ask gets nothing. Talk.

So, as you are planning, what should be your denominator? The x of profit per x. Force yourself to think about a single one. What should it be?

I will take a few example to illustrate the impact that such an approach could have on your business.

As a service company, the denominator could be: Customer. Profit per customer. If you are set on this what does it mean: The number of customer is not that important, what you want is increase the profit for each of them. That might drive you to go see your current customers more. It might drive you to drop customers with which the type of deals you have are not in line with your strategy (service versus pure software/hardware sales for example). It might drive you to expand partnerships with a single partner. It might drive you to diversify your offer into a more complete or global offering. You will try to find ways to cross-sell or up-sell products with existing customers. At the same time you will try to reduce the cost allocated to each customer which means you might want to have someone dedicated to each customer that knows them in and out and can be efficient, spending less time on each new deal. You may want to incentivize your sales team on this metrics as well.

Now as the same service company, the denominator could be: Practice. profit per practice. Let’s imagine you have a security practice and a database practice and you want to maximize the revenue per practice. To achieve that goal you will have to develop certain expertise that justify higher sales costs, maybe find product in those practices that have bigger revenue and margin, your training costs will be distributed differently to maximize for this denominator. You may even want to drop one of the practices all together. Overall your strategy will be quiet different that is your denominator is “customer”.

If you are a SaaS software vendor, you denominator could be “visitor”, “paying customer”, “server”, “marketing campaign”, etc.. and each of them will call for a different focus, culture and strategy.

Finding your denominator is going to be very hard and will certainly be the source of many debate internally. Be honest with yourself, face the hard reality of your situation. Don’t just come with a denominator, try to figure out what is going to be the strategy to increase it (using the great tracking you have put in place earlier). You might realize that this focus will be what takes your company to the rank of great company.

2 THOUGHTS ON “A SINGLE METRIC FOR BUSINESS: PROFIT PER X?

  1. Fantastic book and great blog.
    Our company is currently running through this book for the 3rd time and we still haven’t found our profit/x for either of our 3 businesses (construction, design, rubbish removal.)
    We have the other 2 parts of the hedgehog concept but this is by far the hardest!

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