Posted by Karen
February 4, 2015
Most businesses today recognize that a compelling online presence is critical to their success. Without an effective website, chances Strat are you’re losing valuable business and customers to your competitors who do have effective and active online presences. A successful website should be an asset to your business that more than pays for itself either in the amount of business or customers it converts, or in the amount of money it saves by encouraging self-service.
Is your website successful? To determine this, you need to first define what success is for your organization. Then you need an effective web analytics strategy to measure your website’s performance relative to your defined success factors or goals. If you don’t have a solid strategic plan, you can’t expect to achieve your website goals, and if you don’t measure your website’s performance, you won’t even know if you have achieved your goals!
“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win” ― Sun Tzu, The Art of War
Strategy before Tactics
To ensure the decisions you make regarding your website and online marketing campaigns are being driven by your overall business plan, you need to put strategy before tactics. A strategy is developed and followed by tactics to make it happen. Although this may seem obvious, a shocking “34% of marketers reported that their analytics were not integrated at all with their business plan”*. All too often, organizations have tactics in place for web analytics but are not guided by an overall strategy that will lead to the accomplishment of critical business goals. According to the definitions of strategy versus tactic, it is clear that tactics should never take precedence over strategy:
Strategy: a plan of action designed to achieve a long-term or overall aim
Tactic: a device for accomplishing an end Any tactics you employ should follow an overall strategy, and your web analytics measurement plan should focus on that strategy. In most cases, you will use several tactics to successfully attain the goals and objectives of your strategy.
“All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.” ― Sun Tzu, The Art of War
To develop an effective web analytics strategy, first and foremost, it is essential to establish the primary goal(s) of your website. In other words, why does your website exist? You will not be able to measure the success of your website, unless you first clearly define the goals and objectives of your site.
The focus of a website should always be either on increasing revenue or reducing costs. The following are examples of types of websites, what their primary goals might be, and what the business objectives to achieve these primary goals might be.
Websites with a Focus on Increasing Revenue – are sites involved in the promotion of products or services with the purpose of increasing online and/or offline purchases.
Example A. eCommerce Sites: used by businesses that sell their products over the internet Primary goal: to maximize sales and profitability Business objectives:
Example B. Online Business Brochure/Catalogue Sites – are used by businesses that deal in products or services that are not sellable over the web such as enterprise software, health services, or day-care services. Primary goal: to increase qualified online leads Business objectives:
Example C. Community Building Sites – build online communities of people who want to interact with other people socially or meet people who share their interests. Examples of these are Facebook, MySpace, YouTube and LinkedIn. Primary goal: to maximize revenue by increasing clicks on advertisements Business objectives:
Websites with a Focus on Decreasing Costs – are sites that encourage self-service such as downloading documents, registering for assistance or filling in online forms. These actions reduce corporate costs by reducing or eliminating the requirement for users to call support centers or to mail in forms.
Example D. Informative Sites – such as government sites, news sites, medical information sites and educational sites are designed for self service. Primary goal: to reduce costs by increasing the usage of self service features on the website Business objectives:
Measures such as page views, most popular pages and visitor traffic are not indicators of website success. A site that has more visitors from one month to the next is a sure sign that visitor acquisition is increasing but does not suggest that the website is performing well. More relevant measures of website performance would be whether visitors are interacting with your site or performing the tasks that are in the best interest of your organization. For example, an eCommerce site showing a 50% increase in visitor traffic but no increase in sales would be viewed as a failure. Conversion of visitors to buyers is vital. Similarly, a self-service website displaying an increase in visitors to the site but a decrease in visitors downloading service patches or support documents could not be viewed as a success. Thus focusing on conversions is the key to success. Much more than just tracking successful shopping cart check-outs, conversions extend to all websites and numerous non-commerce activities such as:
“Less than half of analytics data collected is actually useful for decision making.”*
Building on the concept of focusing on conversions, we now must use that data to build actionable KPIs. Just like any other data set, web analytics data requires
context to be meaningful. Consider the value of the following web metric: a 20% increase in the number of page views on a website. If it’s an eCommerce site, and the goal is to build awareness of products and services, this metric could be good news. However, if it’s an informative website with the goal of increasing self-service, a 20% increase in page views could mean that visitors had difficulty navigating the site, in which case the same metric could be bad news.
KPISurprisingly, most users of web analytics don’t know where to start or how to identify and report on the insightful data that will help them make important business decisions. That’s because using web analytics effectively, requires a methodology to translate goals and business objectives into Key Performance Indicators (KPI’s). It’s not sufficient to just measure the total number of conversions. Instead, they must be compared or related to one of four calculations: ratios, percentages, rates or averages. These relative measures form the basis of KPIs and they should all be viewed over time, such as month over month. If we know that these KPIs are improving, we will have confidence that more leads are being generated. For example, KPI’s may be:
Well-designed KPIs quickly convey how a business activity is performing and how successful an overall website strategy is; therefore, it is crucial for any organization to have a sound methodology to define KPI’s and measurements. A KPI methodology is a logical process designed to facilitate understanding between business and technology teams. It should identify persons, departments and information sources for creating and supporting KPIs. This process is often arduous and time consuming but it’s well worth investing the required time and resources. Because the definition of KPIs for your business is critical to deriving real value from your web analytics platform and to the very success of your website, the development of KPIs will be covered in greater detail in the paper 5 Steps to Actionable KPIs.
“We have to build the framework in which we will execute the tasks.” ― LTG Christianson
There is tremendous value in tying web analytics data to other repositories and marketing tools such as e-mail, Customer Relationship Management (CRM), line of business databases, off-line purchase repositories, and phone systems providing sophisticated cross-channel analytics. Integrating and connecting disparate marketing tools will improve understanding of campaign results which significantly enhances campaign performance and insight on how those marketing campaigns are performing, and identifies those that are achieving optimal results. Well-designed integrations enable 1:1 marketing to facilitate a better understanding of individual touch-points and how visitor segments are performing. Strategic benefits can include:
“However beautiful the strategy, you should occasionally look at the results.” ― Winston Churchill
It is vital that you revisit the goals and objectives of your website. If you don’t, your strategy may fall by the wayside. This is part of your governance implementation. A good web governance model should include a number of things, including:
Accountability (e.g., roles, responsibilities, and duties) – Creating precise definitions about who does what, when, why and how
Accessibility (e.g., access to data, integration with other systems, availability standards) – Ensure that analytics and reports are accurate, available, timely, and of direct value to stakeholders
Community – Representation from all relevant business units with full participation by business owners and technology teams
Uniformity – Definitions and policies set for all analytics reports, terminology, KPIs & calculations, reporting cycles, information dissemination, and routine review of governance for enhancements.
Your progress towards goals should be tracked and reviewed on a regular basis, such as quarterly or semi-annually, and your strategic plan should be adjusted based on both your progress and changes in your business environment. Look at how your website is performing in terms of achieving its purpose. Are you getting the revenue or leads you are expecting? If not, your strategy may require fine tuning. Conclusion Website success cannot be determined by simply looking at web analytics reports. Those values need to be further analyzed as KPIs for greater insight, and the KPIs need to evaluate conversion as set by the goals of the web site. Equally important is looking beyond simple measures such as page views and visitor traffic and instead considering the purpose of the website and what its objective is. That will encourage the evaluation of conversions as an indication of how engaged visitors are and if they are navigating and behaving the way you expect.
*Econsultancy and Lynchpin, “Online Measurement and Strategy Report 2012,” July 9, 2012
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