To do web analytics correctly you have to make a to-do list regularly.

That list should be done monthly or weekly depending on your organizational needs and should include:

• What marketing efforts or parts of your site have challenges.
• What you think needs to be improved.
• What things you want to test.

It should also include (based on your results and your resources):

• What efforts you should do less of.
• What efforts you should do more of.

Are you currently generating a to-do list to keep your goals on target?

I’ve got many other secrets to share on how to turn your web analytics into a money making machine, but I’ll wait to share those at Search Engine Strategies. Will you be there?

Do you have any tips you want to share?

[Editor's note: the author of this post is now blogging at bryaneisenberg.com]

So the natural thing to do is trim non-performing words and phrases in order to increase the efficiency of your PPC spend.  And that’s exactly what one client did, except rather than increasing his efficiency, he dropped his sales by 30%.

Why?

Because, depending on what you sell, lots of people buy on their second, third, or umpteenth visit to your site, rather than the first visit.  Those visitors are building confidence in you as they move through their buying process.  But most systems don’t (or can’t) track user behavior over multiple visits.   So when those early and middle buying-stage keywords shown up as non-converters, they get cut.

The shame is that not everyone is able to track the following sales drop off, which may not occur for days, weeks, or months, back to the act of cutting those keywords.

Trading away Dennis Rodman as a Non-performing Player?

Would you trade Dennis Rodman for non-performance?  Of course not, right?  Rodman’s defensive stats alone tell the tale.  At his prime, Dennis was pulling down a truly astonishing 18.7 rebounds per game.  For reference, the previous year’s league leader in rebounds (David Robinson) averaged 13 per game.

But if the only stats you looked at involved scoring, you’d get a different picture. Comparing Rodman’s 8-9 points per game against other star players’ 20 or more points per game, you’d likely have been misled into trading Rodman, only to find yourself wondering why you started losing games and everyone else’s scoring stats went up against your team.

Think of your assisting keywords terms as the Dennis Rodman’s of your PPC campaign, except you’ll get all the assists and none of the off-court shenanigan’s.

There’s plenty of other ways myopic analysis can leading you astray

A recent eConsultancy post discusses how Google’s default window for tracking cookies can distort traffic data.  Left in its default cookie window setting, Google Analytics (GA) will classify visitors as “search”-driven traffic for six months following a single search based click through to your site – regardless of how they got to your site previous to that search or how they might arrive at your site following that search. Here’s an example of how this might skew your results:

Let’s say you’re driving traffic to your site via radio ads and that a listener, after hearing your ad, types your url directly into his browser.  Later, he comes back but this time, he types your business name into Google and clicks through on a displayed search result.  Following that, he visits your site three more times via bookmark or directly typing your URL into his site. That’s a total of 5 visits.

Question: How many of those visits would GA classify as search-driven?

Answer: 4 out of 5.

GA would count the first search-based visit and then all of the remaining 3 visits, despite the fact that the following three visits didn’t use search and may have taken place several months after the initial search.  Multiply that by all your visitors/visits, and you can see how your understanding of what drives traffic to your website might be distorted in favor of search. And under the impression that your traffic was mostly generated by search and not, say, your radio ads, you might be tempted to cut them from your ad spend.   Obviously, the same thing could apply with e-mail campaigns, magazine ads, etc.

Bringing Clarity and Orientation to Web Improvement Efforts

Any experienced Web Analyst or Website Optimizer could extend this list of “gotchas” and “classic mistakes” almost indefinitely.  It’s just not that uncommon for an uncareful analysis of data to lead online marketers either to analysis paralysis or sub-optimal optimization strategies.  Is it any wonder that 70% of businesses collecting wed data fail to act on their analytics data?

Obviously this issue has been central to Bryan and Jeffrey Eisenberg’s Web careers since the beginning.  It’s why they helped found the Web Analytics Association; why they published The Marketer’s Common Sense Guide to eMetrics, Call to Action and Always Be Testing; why they created Persuasion Architecture; and ultimately why they’ve built the OnTarget program.

The central theme amongst all of these issues is bringing clarity and actionable insight to Web improvement and online marketing efforts.  They are all answers to the business owner who feels confused or disoriented by the data he’s given and want’s a clear direction toward more sales/conversions and improved website performance.

So, if you find yourself struggling to make sense of your online marketing data, or frustrated by non- or counter-productive optimization efforts, ask yourself: are you giving credit where it’s deserved?  Or do you need help achieving greater clarity and actionable insight from your optimization efforts?

When you break that sentence down, you start to understand how to optimize your conversion rate.

Step 1 – Let’s understand “number of people“

Who are these people? Are they all the same? Do they have different characteristics, needs, questions? Do all these people have the same amount of product/service knowledge that you do? Are they all at the same stage in their buying process? Do they know you already? Or have they never heard of you before?

How are you bringing these “number of people” to your website? Do they all come by directly typing your URL in their browser? Do some search for your brand? Do some search for your category? Or your products? Do some of those people come from organic search? paid search? emails? affiliates? Do these people come from different websites: Google? Bing? Yahoo!? Wikipedia? Twitter? Facebook?

Do you launch new marketing efforts regularly? Are the efforts last week different than this week? last month versus this month? Is there an important calendar event occuring (Christmas if you’re a retailer; Fourth of July if you’re a seller of fireworks; Mother’s Day if you sell flowers: etc.?) all of which may induce a “spike” in traffic that is different than usual.

There is no such thing as an average person. That is why your average conversion rate is a rough indicator but virtually worthless as a way to focus your conversion optimization.

You have lots of segments who come to your website. They differ by demographics, psychographics, behavior, or because they came in through very different marketing efforts. You can calculate a conversion rate for each one of these segments/marketing efforts and you should.

Step 2 – Let’s understand “the action you want them to take”:

If you are in retail, you want them to purchase a product.

If you are in lead generation, you want them to become a lead.

Are there no other actions that are valuable?

In retail, even in they don’t convert now would it at least be more valuable to know if they added an item to your wish list, or subscribed to your newsletter, or looked up your retail store hours, or added items to their cart versus, just bouncing off the site right away? What are you doing to turn that one-time customer into a repeat customer? Do they only need one product you sell or might they need different ones over the course of time?

In lead generation, if they don’t give you all their information and request to be contacted by sales, is it valuable to have them sign up for a whitepaper, or a demo, or your newsletter? Is it better to download specification sheets, engage in calculators, or print or forward pages rather than just bouncing off the website? These are all steps that move people through their buying process.

These are just some of your macro-actions. What happens when someone comes from one of your ads and gets to a landing page? Sometimes the action is one of those listed above, but what if that page is only meant to help your visitors to choose the right product or service and they still need to actually click on the right one for them? What do you do to help them take that action and not bounce away? These are the micro-actions that need to happen from step to step in the potential customer’s visit.

All of these are actions we need to optimize. You can calculate a conversion rate for each one of these macro- and micro-actions, and you should.

Step 3 – Let’s understand “total number of potential people who could have taken that action”

What happened to the majority of visitors who did not convert? Why didn’t they convert?

Did they land on your site incorrectly? For example, they typed in “shingles” into a search engine and they were looking for roof repair and not a skin condition. This is obviously a disqualified visitor. Did they try to purchase from your website and something went wrong? Did they have problems accessing the information? Could they not figure out how to take action on your website? Did they not trust you? Did they leave with questions that were not answered? Did you answer their questions for today, but they aren’t ready to buy now? Did you not instill a sense of urgency or desire in them? Did you not make them a great offer?

You need to optimize your website experience for these potential buyers through the hierarchy of optimization.

Click here to view the embedded video.

There are thousands of potential improvements to choose from. You need to prioritize these based on the level of impact that improvement can have and the resources available to execute them. If you don’t have a copywriter available at the moment, you shouldn’t focus on copy changes even if it would be the most impactful. That’s may sound like just common sense, but it catches many companiyes like a deer in headlights.

Your average conversion rate is the aggregated conversion rate of how well your website performs for each of your customer segments, and each of your marketing efforts for each of the actions you want them to take. You optimize your conversion rate by first focusing in on the elements that impact as many of these as you can, and then you have to work on these “micro-funnels.”

While you work on conversions, market conditions, competitive forces, ad copy, and even your customers’ needs change. This is why you need to continuously optimize your marketing efforts. You can’t afford to have a “set it and forget it” mentality to your marketing.

Those of you who have been reading our blog and books for a while might recognize these steps as the fundamental steps of Persuasion Architecture®.

1. Who do we want to take action? This is the “number of people” from step 1.

2. What action do we want them to take? This is “the action you want them to take” from step 2. Have you defined all of these clearly? Are you measuring them properly?

3. What do they need in order to take that action? This is where we analyze what content/effort went into understanding why the “total number of potential people who could have taken that action” didn’t. This is where experience helps a ton.

If you only focus on improving a few landing pages here and there, testing a few variations here and there, tweaking creative here and there you will never reach your highest potential conversion rate!

Don’t worry, your customers won’t go unsatisfied. I guarantee that sooner or later your competitors will figure out how to satisfy your visitors needs. Hopefully that will motivate you to start getting your conversion goals on target by investing in continuous improvement.

[Editor's note: the author of this post is now blogging at bryaneisenberg.com]

Cost Per Visitor (CPV) – How many advertising, marketing, SEO, etc. dollars do you need to spend to bring in each Website visitor you’re getting.   Don’t look at conversion just yet – it’s your website’s job to convert the visitors; marketing’s job is to get them there in the first place.  So Cost Per Visitor is the best starting point for measuring your return on marketing spend.

Also, feel free to break this down by channel: SEO, e-mail marketing, PPC, conventional media, etc.  Some channels are easier to track than others, but give all of them your best shot.  Now plot your CPV performance from the beginning of the year till now and see how you’re doing.

Revenue Per Visitor (RPV) – Top line revenue is usually easier to calculate and track, so we go with RPV, but if you’ve got the metrics to figure out bottom line Profit Per Visitor, all the better.  So basically you’re looking for how much money you are bringing in per Website visitor, and you’re looking to see how this metric is changing from the beginning of the year until now.

CPV should be decreasing and RPV should be increasing

What to do if these metrics aren’t moving in the right direction:

1. Take a look at your marketing spend. What’s working?  What’s not working?  Look at differing channels, keywords, time of day, etc.  Get accountability from the tactics you are using to drive traffic.
2. Focus on improving your conversion rate.  Your Website’s conversion rate can act as a lever to both CPV and RPV.  By examine keywords and marketing campaigns in terms of scent and scent trails, you can improve the performance of your campaigns and drive down CPV.  By improving micro-conversions throughout the buying process, you can increase macro-conversions, average order value, repeat customers, etc – thereby improving RPV.  For tools on how to do this, take a look through our archives, read Always Be Testing (or any of our other books), or give us a call.

Feel free to let us know how you’re doing, or to post any questions you have on these metrics and improvement tactics.  We’d love to hear from you.

[Editor's note: the author of this post is now blogging at jeffsextonwrites.com]

1) Where are they entering?

Most analytics packages (including Google Analytics) make it easy to view your top landing pages.  If you haven’t checked this before you might be surprised at the number of visitors who aren’t entering your site through the home page.  That can be crucial information.

Maybe your PPC landing pages don’t provide all the information visitors need and you’re not giving visitors clear links back to your main site.  Maybe your UVP is only clearly explained on the home page, so that someone landing on your services (or a product category) page wouldn’t get that info.

But more than all of that, you’re trying to get an understanding of how visitors move through your site and why they take the actions they do, so you’ll need to know visitor entry points.

2) How are they entering?

Your analytics package should let you analyze traffic, breaking visitors down by source: organic search traffic, paid ads, direct traffic, etc.  And for organic and paid search, you should be able to see what keywords brought the majority of your visitors to your website.  From this information, you should be able to get a sense of the following:

• What are their expectations? Given your visitors’ traffic source and keywords, what are they looking for?  What would they most expect to find when they land on your website?  What scent are they following?

• What are their likely goals? The same key word search could easily be used by people with differing goals.  Chances are you might be ignoring all but one of them.  For instance, I could be searching on “Pensacola Day Spas” because I wanted to buy a gift certificate for my wife.   Whereas my wife might search the same term to see if they take last-minute or walk-in appointments.  Or maybe she’s searching  to see if they have a specific treatment?  The point is, it helps to mentally force yourself to brainstorm as many real-world behind the search terms as possible.

• What do they already know? Someone searching on your name or on the name of a specific service or product line obviously knows more than a visitor entering from a general search term.  Use your keyword knowledge to get a sense of visitors’ differing stages of the buying process?   Are they just starting out and searching for general info?  Do they already know exactly what they want?  Or are they somewhere in between?

• How well is your landing page matching up with visitor expectations and goals? Would visitors find their keywords on their entrance pages?  Would they know that they are in the right place, based on a 7-second scan of the page?  Do your entry pages have high bounce rates?  What is the average time spent on the page?

3) Next-page navigation – where are they going when they first hit your Website?

Now that you know where visitors are entering your site and you have a sense of their motivation upon arriving at your site, take a look at where they navigate to upon their arrival.  What are the most popular next pages? Look at this information while looking at the actual landing page.

• Are the most popular “next pages” the same ones you would have guessed?

• Are they pages linked to by prominent calls to action or embedded links placed within the active window? Or are they pages only accessible through your top or side navigation?

• What questions would those pages answer for the visitor?  Why do you think the visitor is moving to those pages? Is that action congruent with what you’ve seen of visitor motivation from their keywords/scent?

After you see what those most popular next pages are, click through to them within your analytics package and see where visitors are going from that next page.  If the majority of entering traffic (for a given page) is clicking through to a couple of different pages, you’ll often find that visitors navigate to the remaining popular pages following their first click.  You should start to see patterns forming – key, or most navigated to, pages will stand out.

Watch out for situations where your most persuasive content is NOT one of those most navigated pages; you can’t persuade visitors with content they never see.  Also, watch out for situations where one of your most navigated pages are also exit points, in those cases the visitor either lost confidence or didn’t find what they were looking for.

4) Where (and Why) are they leaving?

First, let’s talk about the difference between bounce rate and exit rate. A bounce is sort of like it sounds, someone came in on a given page and left on that same page without going anywhere else on the site.  Unless visitors are also converting on that same page, bouncing is bad.  It means visitors are rejecting you – either because you are attracting the wrong visitors, or because your landing pages are not re-assuring them that they are in the right place to find what they came looking for.

An exit rate simply tells you how many of the people who came to that page also left your site from that page, including both people entering the site on that page AND people navigating to that page from somewhere else on your website.

• Planned and unplanned exits. Some exits are good.  You expect people to leave your site after buying something/filling in a lead form.  Customers who log-into a registered user domain from your home page will likely show up in your analytics as a bounce.  Etc.  But you obviously don’t want customers to leave before reaching their goal or your goal.  Often you’ll find visitors exiting from pages containing your conversion beacons – product pages containing the “add to cart” button, service pages containing your lead form, etc.  Or you’ll see cart/form abandonment, where visitors start to convert and then back out.

• Take a look at “time on page” for the conversion beacons. Abandoning a page after a few seconds isn’t the same as dropping it after a few minutes.  A few seconds means it was the wrong product or service for them.  Someone leaving your page after a few minutes engaged with your content and never got the answers to their questions and/or simply didn’t have the confidence to buy.  Take a look at the page itself, what information are you not giving them?  Are you using great photos, persuasive copy, points of action assurances, risk reversals, etc. in order to instill buyer confidence?  What about shipping information?  Most of the exits on both this page and the cart page are caused by inadequate information and content on these conversion beacon pages.

• Page prior and broken scent? If you find a high exit rate page, look at the most popular entry paths to that page.  Look for mismatches between expectations in moving from the prior page to the exit page.  What were visitors hoping to find on that exit page and what did they actually find?  Was the hyperlink misleading or was the content simply anemic?  Try to figure out the Piss-Off Factor.

5) Form a hypothesis and test

Completing steps 1-4 should have shown you several mismatches between what you and/or your visitor expected and wanted to happen vs. what actually happened.  You should also be able to come up with some pretty good theories for why these mismatches are happening and what might fix them.  Even better, you should have a strong idea about what success would look like if your tested theory proves true.  In other words, you know what metrics are indicating a problem, so you know what metrics you should see change.  Congratulations, you’ve now made your analytics actionable.

Here are some further tips to help keep you going down the right path:

• Don’t test randomly - always test with a hypothesis regarding visitor motivation/behavior.  You’re after insight as much as lift – a “negative” test that gives you a better idea of what motivates your visitor is     actually better for your long-term success than a positive test that provides little or no new insight.

• The difference between micro-conversion vs. macro-conversion. Testing a page variable that reduces bounce rate and/or moves more people to a key persuasive page may or may not immediately impact your conversion rate, as you may be moving people down a funnel that’s leaking somewhere else.  Or maybe you’re engaging early stage buyers that won’t convert for another month or so.

• Know when to test for micro-conversions, such as moving from one page to the next; when to test for macro-conversions, as in how much bottom-line impact this change made; and when to set-up a secondary, earlier-stage conversion, such as signing for the newsletter or downloading a white paper vs. buying or filling out a lead form.

Bonus step – answer their questions, manage their anxiety, stoke their imagination.

When looking at a page in terms of visitor behavior and motivation, always ask yourself how well that page is answering visitor questions, how well it is re-assuring them emotionally that they are in the right place and on the right track to accomplish their goal, and finally how well it is appealing to their real desires.

P.S.  A quick note on how to integrate “best practices” into your optimization efforts.  Rather than blindly testing best practices, allow your knowledge of them to help you form theories about why visitors are or are not taking a certain action.  For instance, it’s a best practice to place your calls to action within the active window.  If your main call to action is in a side-bar and almost no visitors are taking that action, you might test moving your CTA into the active window.  For some fabulous books on best practices and testing, take a look at Call to Action and Always Be Testing.

P.P.S. If you enjoyed this post please consider Tweeting it please.

[Editor's note: the author of this post is now blogging at jeffsextonwrites.com]

In fact, whenever I work with B2B and complex sales clients it’s a sure bet their website won’t:

1) Adequately address the multiple decision-makers and influencers involved in securing the lead

If a sales manager needs to justify a training expense to his CEO and CFO, wouldn’t it help to provide your inside champion with messaging and tools to help him make his (read “your”) case?

It’s usually good to have sections of your website and messaging designed specifically for those secondary decision-makers and influencers that need to sign-off on the decision of your inside champion.  As an analogy to the consumer world, would you really want to construct a website that sells engagement rings without providing content and messaging for the prospective fiancee?

2) Have planned (and tracked) conversion points for visitors who are early in the buying process

To keep with the consumer analogy, let’s say you’re considering having a pool put into your back yard.  Assuming that one of your local pool suppliers/installers had a website with valuable early and middle stage content, how many times might you visit their website before actually contacting them and becoming a lead?

• You might come to them early on when doing preliminary research regarding what type of pool you wanted, what size, shape, depth, etc you should look at, what kind of associated expenses and purchases are involved, etc.  Reading this stuff might take 3-5 or even 15 different visits.  How would you know if any of these visits are successful?  How could you measure or get a handle on your Website’s influence on such a buyer?I’d normally suggest having a goal for these types of visitors.  Maybe it’s downloading a pool planning or pools for dummies report/PDF.  Maybe it’s playing with an interactive pool builder or pool cost calculator.  Whatever it is, having a trackable (and helpful) event for these early stage buyers helps to track your Website’s success in attracting and engaging

• Moving to the middle stage of the buying process, you might touch the site again when you are closer to buying and constructing a short list of potential contractors/installers.  This time you might drill down into why you should do business with them and not someone else, reading up on their installation timelines, the skill of their install crew, etc.You may or may not feel like filling out a lead form at this point.  But a valuable and well-merchandised free download titled something like, “10 Questions to Ask Any Pool Contractor,” might look far more attractive to you – especially if you only had to provide a name and e-mail (rather than the lead forms more detailed info requests) to get it.

• And then at the late stage of your buying process you might look at the site a third time to fill out the form or get the phone number to actually buy the pool. What a waste if the pool website only had the lead form as a conversion point, without ever providing (let alone tracking) any of the early and middle stage downloads and conversion events.  Questions would go unanswered, and prospective buyers would go unengaged / go somewhere else.

Needless to say, the exact same patterns of behavior occur for B2B sites as well.  And yet most B2B sites don’t have defined content and conversion points for their early and middle stage visitors.  Your prospective leads are going to go somewhere to get their questions answered, shouldn’t it be on your website not your competitors?

3)  Have metrics/analytics capable of tracking visitor behavior over multiple visits.

While early and middle stage conversion points help a Web analyst/website optimizer get a better handle on a sites overall success in engaging early and middle stage buyers, it still leaves them guessing at the big picture, simply because they can’t track a lead generation or sale all the way back to that prospect’s first visit to the Website.  This can be crucial for gauging the real success of a PPC campaign.  Key words that might look unprofitable (because they target earlier stage buyers) might be spectacularly profitable – but only after the 8th (or 20th) visit to the site.  Unfortunately, if you can’t track visitor behavior over multiple visits, it’s difficult to get a handle on real – vs. false- measures of keyword performance.

While I love, love, love Google Analytics / Google Ad Words, this is exactly one of these tools shortcomings.  And it’s one reason that we insist that our OnTarget clients install our software in addition to GA/GWO: OnTarget can bracket visitor behavior through keyword entry and track individual visit behavior over multiple visits.  It’s a wish-list come true for us Future Now Persuasion Architects and can be a positive boon for our On Target clients.

So there you have it: start matching your B2B and complex sale website to the real complexity of your sale.  I’ll be writing follow-up posts with exercises and steps on how to do this, but in the meantime, would it be too forward of me to suggest you sign up for On Target?

Here are 5 strategies companies use to become market leaders.

They have great operations -

Operations that let them be more efficient than you at getting order picked, packed and delivered so that customers’ expectations are exceeded. These efficiencies in operations also allow them to keep their costs down.  At the same time those interested in capturing additional market share invest those efficiencies back into improving the customers’ experience. Walmart.com online exemplifies this quality.

They do a better job at generating word of mouth -

Everything they do is focused in on delighting customers. They are driven by service. They understand that success is a long term strategy and can afford to do what they need to in order to please their customers. They go to every extreme to delight their customers and offer lagniappe in many ways.

They live on “life-time value” metrics. They are driven by a passion to serve and a philosophy that it is easier to keep a customer for life than to try and keep acquiring new ones. These some times over the top efforts that lead to so many of their customers sharing the amazing experiences they have had with the brand. Zappos.com exemplifies this quality..

They deliver as good of a product/service in a more customer friendly way -

I’ve seen this one happen so many times. One day you, the market leader, the first person to market with the product, with significant marketing budgets, and with the hugest market share become aware of some smallish competitor and ignore them because their product isn’t up to snuff.

They slowly start winning customers, that just need the basic features they offer. All the while they keep building up their product/service. However,  from the get go they eliminated many of the hassles of getting started with their business. Instead of a complicated sale processes, or in-the-way sales people they made their pricing transparent and made it easy to sign up online to get started right away. GotoMeeting employed this strategy when competing with Webex.

They do a better job at being found when people need them -

Location, location, location. Budweiser is not the world’s finest beer. However, they sell a lot of beer. Bud dominates so many channels that they are always available. We know Bud and so we order it because often good enough is good enough. Amazon applies this principle online.

Wherever or whatever you search for comes up on their site or on Google as being sold by them. I am not just talking about having a first place ranking for the most competitive single word key phrase, but they have invested in having content (a large portion customer generated) that spans the long tail, from early in the buying process to later in the buying process. Their pages tend to keep showing up time and time again. They thrive on generating content that is relevant and are thrilled to live off the 3 or 4 searches a month for a particular piece of content or obscure product as long as they have thousands of them that people are finding. Amazon has utilized this to keep adding product categories to their vast catalog.

They developed a culture that continuously optimizes the customer experience -

This is different than being customer intimate, it is more incremental, it is about being metrics driven. The key is to focus on key performance indicators that drive success for your business and being relentless and innovative in way to drive up those numbers. They may not often start off as the category leader but through relentless testing and optimizing they gain market share. These companies tend to be less risk averse preferring gradual and continuous change. This is a very powerful strategy for companies to leverage in a down economy, because while your competitors are trying to maintain status quo you focus on constantly improving. Many of Intuit’s brands exemplify this strategy.

How can you leverage these strategies to drive your own growth?

- Elaine in the movie Airplane

Does looking at an instrumentation panel like this (picture on the left) create feelings of information overload? It does for most non-pilots I know.

Pilots on the other hand, quickly identify the primary flight gauges and navigation equipment.  They know what’s immediately important for flying the plane, and can scan across multiple gauges (rather than fixating on one or two of them) to develop a “big picture” of what the plane is actually doing.

Even more importantly, when they make a control input (like adding power), they know where to look to verify its intended effect (e.g., altimeter and airspeed).

Web Optimization is a lot like that.

Emotionally, many business owners experience that exact sense of information overload when looking at traditional Web Analytics.  No one has taught them how to assemble a composite picture of visitor behavior – what measurements to look for first, what to look at in combination, and how to verify that website changes worked as expected.

Flying blind becomes the inevitable result.

Yet rather than looking for a pilot or investing in flying lessons, many business owners buy into optimization efforts based on sophisticated data gathering capabilities and overly complex testing methodologies.

Why would they do that when they need more actionable insight and situational awareness, and not more gauges to look at?

Because flight instructors are in short supply.  And because this kind of sense making, as a so-called “soft skill,” has always been a more difficult sell than hard-core data collection and taguchi testing.

But those interesting in learning to fly their web optimization efforts have a viable option:  Follow Bryan Eisenberg’s free Webinars and get free flight lessons each month.

On January 15th, Bryan and Jim Sterne (considered the godfather of web analytics) will cover specific techniques to get a composite picture of visitor flow and the importance of looking at analytics through the lens of visitor intent.  Consider it a first, free flight lesson that can be followed up with Bryan’s recorded Webinars.

And for those that want more, I’d invite you to check out FutureNow’s OnTarget product as an affordable way to hire an “on demand” flight instructor for your web optimization efforts.

In fact, his last e-mail was so good and applied so well to most lead generation websites that I thought I’d share it with you directly:

“…Leach recruited the BIGGEST OFFENSIVE LINE in college football (bet it’s bigger than most pro teams as well). These guys make the offense that Leach runs possible. They wear down defensive lines, protect the passer, open up running lanes … but guess what … THEY DON’T SCORE. They only make it possible to score.

I think great websites similarly open up the door of possibility but no matter how big the website is … and how many bells and whistles it has … there is a lot more to scoring points with the customer.  You still need to do all the other things right.

Southwest Airlines is aggressive online. I print boarding passes through the website.  I get my seat assignments through the website. I also get regular email offers from them. Sounds hunky dory but the Website AIN’T the reason I am booking flights. It is the cost, convenience and great service Southwest has been delivering to ME for a long time. The WEB just made my ongoing relationship with them even easier.

Amazon isn’t just a website … they do an incredible job of shipping my books to my doorstep … and yep, they send me customized emails about new books on subjects I read.

UPS lets my company do all its shipping on line … but it is the guy in the brown truck who picks up my packages on the day I want to ship that I am interested in … the UPS website is merely a tool.

The same concept applies to your clients. The WEBSITE is an extension of the business … it ain’t the business. The Man-Giants for Texas Tech don’t score … they make it possible for Graham Harrel and Michael Crabtree (i.e., the SALES TEAM) to connect and put points on the board  … the defense is the OTHER stuff we do that people may not notice (like delivering really awesome service).

I think that more and more energy is being put into websites (the Offensive Line) … and it is vitally important … but you still have to have a sales force (QB & Receivers) and combine it with excellent core service & products (Defense). Put it all together and you can win a National Title.

t”

Yet while Tom was taking this from a somewhat negative light by asking “are your company’s QB/receivers up to snuff?”  I was taking this from the opposite perspective of, the better the offensive line blocks, the more successful the rest of your offense will become.

More specifically, clients with lead generation sites are always more than happy with the increased number of sales leads we can create through Website redesigns and optimization, but that’s not what the rave about.  What they’re usually blown away by is the increase in lead quality and reduction in sales cycle time.

Why?

Because most clients weren’t thinking about – and therefore weren’t expecting improvement in – that aspect of lead generation when they hired us, so success on that front is more of a WOW for them.  And also because those factors can be even more important in bottom line success than increasing the raw amount of leads.

Of course, when you really focus on the fact that the website itself won’t complete the sale, it becomes second nature to ensure the sales team gets the best possible hand-offs and the most protection from time-wasting tire kickers “sacking” your QB.

So if you already have a solid sales team, the question I’d ask you is: how good is your offensive line, and how much more could you be scoring with a better one?

• Established his own (very successful) ad agency
• Launched the Dodge and Chrysler brands
• Hired and mentored Leo Burnett, creator of the Marlboro Man, Tony the Tiger, Pillsbury Doughboy, and many other advertising icons that made his clients rich
• Turned positioning into a fine art form half a century before Ries and Trout even coined the term.
• Helped establish Cadillac’s pre-eminence among early automotive marks
• Wrote “The greatest ad of all time,” as voted in 1949 – an ad still listed in the top 50 of Ad Ages Top 100 Advertising Campaigns.

Interesting, but why should you care?  Because MacManus’s – and by extension Burnett’s – approach was the yin to Hopkins’ yang, and because MacManus’s approach still works today.

And what was that approach?

In a word, it was to position the client while dethroning competitors in the minds’ of the audience. He wanted to create, in the mind of the public, a deep-seated prejudice towards his client’s brand.

If, in the words of the legendary Gary Halbert, the biggest key to success is to sell to a starving crowd, then MacManus aimed to persuade the consumer that only his client’s product would fully cure their hunger, and then wait for the more-cheaply-persuaded and much larger mass audience to get hungry as their individual circumstances dictated.  This would be in contrast to targeting only hungry people and then selling to them via direct mail.

And so the two poles of advertising continue on to this day, as is clearly seen in the following comments by an extraordinarily successful brand builder, Chris Maddock.  Chris was responding to my request for his opinion on Google’s recent attempt to track the effect of offline advertising upon online sales/conversions.   Here’s what he had to say:

Jeff,

I think Google’s traditional ad analytics are interesting, sexy, and certainly useful on some level.  But I think the program could also be dangerous, in that it could give some folks faulty impressions of what is actually happening – or what is right – because it assumes advertisers know things they probably don’t.

Let’s say a local hardware store runs some print ads, and compares the online response to another time they’ve run radio ads.  If the print ads were for a short term offer, and the radio ad of a more institutional bent, the print ad could drive more traffic to the website and have the hardware store owner thinking that print’s the ticket.  The reality in such a situation is that the print advertising is impressing and motivating a tiny, albeit palpable, percentage of the market to respond and go the the website, while the time-sensitive nature of the offer makes the advertising all but invisible to the bulk of the market.  On the other hand the radio advertising is likely creating greater long-term top of mind awareness, yet probably not motivating as many to go the website.  Mr. Hardware likely thinks that the radio campaign was less effective, when in fact most category dominant businesses are those that eschew short-term sales, offers, promotions and the advertising tools that make them work, while leaning on intrusive media such as radio and television to push long-term awareness.  Over time, radio could likely drive many more visitors to the website – visitors who will likely buy.

So my worry is admittedly Hamiltonian.  Years of interaction with average business owners and traditional ad people has revealed a startling blindness to things like buying cycles, differences in long and short-term strategy, and proper media selection.

So these new Google analytics are cool.  I just hope the good people using them understand what they’re trying to make happen, and what the numbers returned really mean.

-    Chris

Do you see how Chris picks up the standard of Theodore McManus, Leo Burnett, and Roy Williams?  Although I think it is possible to intelligently and rigorously compare media, I can’t help but agree with Chris’s larger point.  Creating a prejudice in the mind of the customer before they’re hungry is often a more effective strategy than trying to only target hungry customers.*   But it requires a longer time horizon.  So if you are only measuring on the short term, you’ll likely come to the opposite conclusion and then deem your position to be “scientific.”  It’s a perfect example of one of the deadly sins of Web Analytics.

So what’s your time horizon?  And have you implemented a measuring/analytics system that will enable you to measure accordingly?

* To be fair, there are certainly also times when it pays to directly target hungry customers, rather than engage in a lengthier branding campaign.  I’m not necessarily advocating one over the other; I’m arguing that you shouldn’t base your decision on skewed metrics.

We define Home Runs as triple-digit increases in conversion rate.  When we help our clients hit home runs, we ring the bell and celebrate.

But one of the dangers of early testing efforts is the problem that some baseball players have: “swinging for the fences.”  (Apologies for the baseball references, but it’s getting to be that time of year.)  What if your test, or series of tests, doesn’t appear to raise conversion rate?  Do you dismiss the tests as failures because they’re not home runs?

Of course not!

Worst case scenario is that you’ve learned something about executing meaningful tests, and about what does or doesn’t resonate with your customers.  But more often than not, you are affecting your website in more subtle ways.  Remember that conversion rate is often a blended, averaged, blunt instrument.  Especially when it’s averaged across large volumes of organic search traffic, SEM traffic, email house list traffic, different product lines, etc.

Here are some things you can monitor when your tests aren’t having huge impacts on your overall conversion rate:

1. Micro-conversion rates – If you’re testing product detail page layouts and “Add to Cart” buttons, check if those test variables are having an effect on the micro-conversion rate of adding products to the cart.
2. Funnel conversion rates – If  you’re testing lots of minor copy changes to your shopping cart, check for changes in your funnel conversion rate.
3. Bounce rates – If you’re testing images, copy, or other changes designed to build up the credibility of your site, watch for changes in bounce rates.

These types of incremental improvements are tests results to get excited about!  If your micro-conversion rate increases, and your funnel conversion rate stays the same, that’s still more money in your bank account.  If you reduce the bounce rate, you’ve gained the chance to convert that customer later, instead of your competitor.

So don’t dismiss the base hits because you’re disappointed about not hitting a home run (this time.)  Take it from a patient analyst who’s favorite baseball player was famous for lots of base hits and not all that many home runs

1. Office Depot 26.90%
2. 1800flowers.com 20.90%
3. FTD.com 20.30%
4. J. Jill 19.4%
5. ProFlowers 19.30%
6. QVC 18.20%
7. LL Bean 15.9%
8. Children’s Place 15.2%
9. Blair.com 14.9%
10. Zales 14.6%

*Source: Nielsen Online / Marketing Charts

New comers to the list include: J.Jill, Children’s Place, and Zales. Regulars to the list hat dropped off in July include: Lane Bryant Catalog, Eddie Bauer, VistaPrint and eBay. I think it is also interesting to note that FTD has done a great job staying towards the top of the list as ProFlowers seems to be dropping a bit.

Additonal June Retail Benchmarks:

Page Views Per Session 12.17
Product Page Views Per Session 3.13
Average Time on Site (in seconds) 469.83
Average Items/Order 6.56
Average Order Value $145.48
Shopping Cart Conversion Rate 31.99%
Shopping Cart Abandonment 68.01%
New Visitor Conversion Rate 1.81%
On-site Search Session 13.36%
On-site Search Conversion Rate5 .61%
On-site Search Average Order Value $144.41

Marketing Summary Benchmarks:

Direct Load:
Traffic % 51.18%
Sales % 72.94%
Conversion Rate 3.07%

Natural Search:
Traffic % 12.45%
Sales % 6.74%
Conversion Rate 2.02%

Referrals:
Traffic % 6.33%
Sales % 1.85%
Referral Conversion Rate 1.70%

* Source: Coremetrics LIVEmark Benchmarks US (PDF) – UK benchmarks PDF available.

Coremetrics LIVEmark leverages aggregate performance data across more than 300 participating brands to deliver over 35 benchmark metrics addressing performance indicators such as campaign and channel effectiveness, site stickiness and conversion rates.

If you need help increasing your personal benchmarks, let us know.

I was responsible for the performance of those sites, and I was the de facto “web analytics guy” within my company.  But I wasn’t a full-time Web Analyst, and I had lots of other strategic and operational things to do.

Sound familiar?

When I did look at my web analytics, I often skimmed the information contained in my default “dashboard,” and rarely dove into the real data unless someone came to me with a specific question, or I had to produce a report.

There’s an obvious downside to that approach: The data in the dashboard is very “averaged out” and may lead us to miss more specific data points that we can leverage to do a better job.  But how do we get at the juicy money making data, while not spending too much time getting buried in minutia?

The solution? Scheduling in regular, recurring “data dives” to make sure you are not getting addicted to the dashboard view of your website.  Maybe start with once a week, and put it in your calendar. (If you don’t you’ll likely never find the time ☺)

Note: I am using Google Analytics in these examples because of its ubiquity, but they should all be applicable to any modern web analytics system:

Here are 5 tips to get you started:

1. Instead of the default “last 30 days” view of your analytics, try exploring different extended date ranges.  For example, I used to keep a rolling, 90-day dashboard.  Using the “timeline” function in the date selector tool is good for this.  So is selecting “date range” in the comparison dropdown menu; that way you can compare the same date range in the prior year, for example.
2. Make sure you assign goals and dollar amounts to every conversion on your site.  Most sites have a primary conversion like becoming a lead, subscribing, or purchasing, but micro-conversions are important, too.  Tag your primary conversion goal with your average order value, your lead conversions with a value per lead, etc.  For micro-conversions, figure out what percentage of your visitors that take that action eventually leads to sales.  If 1% of blog subscribers turn into deals, and the average deal is worth $500, then that micro-conversion goal value should be $5.
3. Explore the Traffic Sources reports to get a better understanding of your traffic “mix.”  Segmenting by traffic source can often yield quick, actionable insights.  Try looking at your organic traffic over the last 6 months, or your referral traffic over the last 3 months.  What does the traffic graph look like?  How well or poorly are they converting?  Has that KPI remained consistent?
4. Dive into your Top Content reports, and try sorting by “$Index.”  Note: This value is only calculated if you’ve assigned goal values and e-commerce revenue values across your site.  And believe it or not, there are ways to assign e-commerce values to your site pages even if you’re not running an e-commerce site.  $Index calculates the values of pages according to how often they’re accessed en route to a conversion.  It works kind of like the plus/minus point system used in the NHL.  If a player is on the ice when a goal is scored, they’re “+1,” and if they’re on the ice when a goal is scored against, they’re “-1.”  So if a page is very regularly visited by customers who convert, it will have a high $Index value.  It’s a great way to figure out which high-impact pages you should start testing and optimizing.
5. If you have site search, spend some time hooking your web analytics up to your in-site search, then dive headfirst into the very valuable data the Site Search reports can provide.  Are you able to see which keywords are delivering “zero results”?  What keywords are being used most often in search?  Are visitors who search more likely to convert?  Do they spend more per transaction?  Are there products are services your visitors ask for that you don’t offer?  Should you?

I know there are more handy tips around, but I limited this to 5 because I’m sure our readership has some brilliant ways they can share on how to do healthy and productive “data dives.”

And if this was useful, let us know, and maybe we’ll do a part two.

One final note:  Data diving is healthy and fun, but just remember to come up for air once in a while . Even more important, don’t let the stuff you learn from your analytics just sit there, turn your learnings into action and let’s move our conversion needles together.

Outages happen all the time, but there is a scale at which this becomes amazingly rare and the amount of time of the outage was surprising. 30 minutes to two hours doesn’t sound like a lot of time, but when you consider the scale of a business like Amazon.com, it has massive impact to the sales of the company. Advertising Age estimated that Amazon may have lost $1.8 Million, based on the company’s last quarterly earnings report.

Personally, I doubt it was that large — considering Amazon’s revenue mix and the date/time of the outage — but it was a sizable chunk of change. Then consider the collateral brand damage of taking down the sites of all the small businesses who decided to trust Amazon.com as their platform for launching their businesses. Try measuring the true impact of that hit.

The most chilling impact, though, is how much forward momentum was just wiped out for the company and the marketing team responsible for reaching their targets. How many of the hard-fought growth numbers for the period are just negated by technology failure.

This type of impact sneaks up on a company as it matures. It reminded me of an instance in my career, managing acquisition marketing for a large online subscription business. On a particularly high traffic day, the store went down and I was shocked when no one dropped everything to start fixing it.

The problem was scale. In the past, when the company was small, an outage like this wasn’t a big deal because they only lost a few sales. But as the company had grown (with the same people in the same roles), the scale and impact of such a problem was forgotten. It wasn’t until I brought management an estimation of the 5-6 figure number we were likely to lose because of the issue that the whips started cracking and the problem received the attention it deserved.

There are insights to be gained from both examples that any effective marketing team should put into practice:

1) Analytics and Tracking: Make sure you as marketers are watching the health of your site and ads. Most analytics packages have alerts for metrics. Build reports that allow you to see critical areas of your site in real time. For instance, I had a real time view of all the steps of our purchase funnels on my desk at all times and it saved the day a few times.

2) Marketers, understand the importance of building it right as well as fast. Sometimes we push developers too hard to deliver in tight time-frames and scalability and fail-safes are sometimes the first code to get cheated. Developers, empathize with your marketing team’s critical deadlines and don’t go overboard on scalability.

3) Understand, in real dollars, the impact outages have to the top and bottom lines and invest appropriately to protect your performance.

Sounds like something the dev team should do, right? Well, yes, but this is one area where two eyes are better than one and where healthy collaboration helps the entire enterprise.

And to Amazon.com, your recent outage sent the bookworm-like staff here at FutureNow into a raw panic, but we empathize with your recent pain and hope you’ve learned many powerful lessons from the issue.

. .

About the Author: Brian Bond is VP of Marketing and Product at FutureNow, Inc.

A week ago, my friend called me to ask, “What’s the industry average time spent on a site?” Her boss asked her to find out because she was doing a presentation to the marketing team and would be attempting to describe what was happening on their website.

My friend was looking at her analytics reports, assuming they should be reporting metrics like “time spent”, but she couldn’t give me any explanation as to why they were measuring certain things or how it all fit together. This marketing team had no idea what their analytics were trying to tell them.

Sound familiar? Whether or not we care to admit it, this problem is all too common. By themselves, the facts can be deceiving. If the facts don’t fit into a larger story line, they’re meaningless. Just because something happened, that doesn’t make it newsworthy. That’s why…

Marketers should think like news editors.

Your web analytics program works for you, not the other way around. It’s the news wire that serves your staff of reporters and, as editor-in-chief, it’s your job to decide which stories are most important.

There are two types of approaches to web analytics reporting:

• The beat reporter reliably follows the same story from day-to-day. If you tell the beat reporter to follow “time spent”, she will diligently explain where visitors spent the most time, how much time they spent overall, and how much time they spent today versus yesterday, last month, last year, and so on.

• The investigative reporter tries to find the meat of the story; to get the bottom of what truly matters. If you tell the investigative reporter to follow the “time spent” story, she’ll start to ask big picture questions. She’ll want to know why time spent matters, how it relates to your other metrics, whether “time spent” means one thing on one page and something very different on another, and whether it even matters if visitors are spending more — or less — time on your site verses the competition’s. She even wonders if this whole “time spent” thing is really a distraction. She doesn’t want to spend her time chasing false leads.

Like other default metrics, average time spent tells us nothing on its own. The company that my friend works for has over a thousand employees. Most of the staff in their home office and brick-and-mortar stores use computers every day, and many of them likely have their browser set up to go directly to the company’s homepage automatically. Each day, a large amount of their traffic probably comes from employees, not potential customers. If this is the case, the average time spent on their site tells them very little about the customer experience on their website, because employees’ time spent would skew this number. Likewise, the traffic sources would be skewed and the average page views and bounce rates from the landing page would also be skewed.

Don’t use your analytics tool just to report the facts. Become an investigative reporter. For each piece of information you find, ask yourself why it matters. Ask how the metrics tie together. Most importantly, ask yourself how the web metrics you report on tie into your overall business goals.

That’s how reporters break news.

. .

About the Author: Melissa Burdon is an investigative reporter (or Persuasion Analyst) at FutureNow. She’s also a recovering Canadian. Oh, and it’s her birthday.

But this confusion among smart people makes sense when you think about it. When was the last time you had a face-to-face conversation with someone, only to realize they weren’t listening? How can we expect to measure engagement with metrics, when we often can’t tell if the person right in front of us is truly engaged? In fact, the only people who can reliably tell when you’re tuning out are your friends, family, and significant others. There’s a reason for that. They’ve seen your behavior before, analyzed it, and suddenly, in their minds, you’re easier to predict than Paris Hilton.

Likewise, engagement means different things to different websites. Since each site has its own unique characteristics and purpose, engagement must be defined by your site’s goals — not by Amazon’s, eBay’s, or Ms. Hilton’s.

The first step is to define how an engaged visitor behaves in terms of your site’s goals.

• What is the ultimate purpose of your site?
  • Content site example: Get people to read my cooking blog.
  • Commerce site example: Get people to buy hats from me.
• What actions do visitors exhibit when they’re interacting with the site and moving toward its ultimate purpose?
  • Content site examples: Reading articles, signing up for newsletter, subscribing to RSS.
  • Commerce site examples: Viewing products, reading reviews, viewing about us page, adding items to cart.

So, what exactly does an “engaged” visitor do on your site? What are some of the clues that engaged visitors leave behind in your analytics?

• Do they stay long?
• Do they click a lot?
• Do they visit the site many times?
• Are their repeat visits days apart? Weeks apart?
• Do they penetrate deep into the site or bounce off of it?
• Do they view lots of pages?
• Do they take a given action like sign-up for a newsletter, refer a friend, or download a file?
• Do they leave comments on your blog?
• Do they link, Digg, Stumble, or otherwise find you del.icio.us?
• Do they purchase?
• Do they purchase repeatedly?

Some sites will have an even harder time than others at capturing the elusive engagement in their analytics and may instead need to combine the quantitative data with qualitative analysis, like surveys. (Here are three great survey questions.) But proceed with caution. While many sites could benefit from using surveys on their quest to find missing pieces of the engagement puzzle, it’s easy to be mislead by what customers tell you in a survey. Ever take an online survey where the questions were fundamentally flawed? Do you prefer the taste of New Coke to CocaCola Classic? (The folks who were surveyed did.)

What’s even more dangerous is that only certain personality types bother to participate in surveys in the first place. (And good luck getting a Spontaneous customer to fill out a survey unless they’re either angry or bribed.)

A common approach to getting an initial handle on engagement is to take certain metrics that relate directly to your visitor’s main goals: those that measure if visitors are taking the actions you want them to. Monitor them closely, and see how these metrics play off each other when certain changes happen — e.g., changes in season, updates to a checkout process, special promotions, inactivity on a blog, industry trends — affect the site.

When Metrics Lie

When selecting which metrics to use, keep in mind that it’s easy to be deceived by your own numbers. Proceed with caution by giving an in-depth look into the stories these metrics can tell you before placing your trust in them. In order to be sure that your metrics are an accurate reflection of engagement, you shouldn’t take one-off metrics at face value.

“Page Views” are a great example of a metric not worth trusting on its own. In this case, it may very well be that a visitor isn’t finding what they’re looking for. Perhaps they’re “pogo-sticking” from page-to-page in search of what they need. Now you’re keeping them on the site longer, thus increasing “Time Spent,” which, again, can be deceiving by itself. Although wasting the customer’s time — so long as they don’t leave the site — will increase the page views and time spent, it may not mean you’re actually engaging visitors. (Not in the way we’d hope, anyway.)

Engagement Metrics + Toolkit

With your site’s goals in mind, and a rough understanding of how an engaged visitor behaves, here’s a sample of some metrics that may be useful relative to your site’s purpose:

• Visitor Engagement Index = (Visits) / (Visitors)
• Take Rate = (# of Visits Taking Part in Desired Activity) / (Visits)
• Repeat Visitor Share = (Repeat Visitors) / (Visitors)
• Heavy User Share = (# of Visits with X or More Pages Viewed) / (Visits)
• Committed Visitor Share = (# of Visits Lasting Longer Than X Minutes) / (Visits)
• Committed Visitor Index = (# of Page Views in Visits Lasting Longer Than X Minutes) / (# of Visits Lasting Longer Than X Minutes)
• Committed Visitor Volume = (# of Page Views in Visits Lasting Longer Than X Minutes) / (Page Views)
• Bounce Rate = (# of One Page Visits) / (Visits)
• Scanning Visitor Share = (# of One Minute Visits) / (Visits)
• Scanning Visitor Index = (# of Page Views in One Minute Visits) / (# of One Minute Visits)
• Scanning Visitor Volume = (# of Page Views in One Minute Visits) / (Page Views)
• Average Order Amount = (Total Sales) / (Total Orders)
• Sales Per Visit = (Total Sales) /(Visits)
• Repeat Order Rate = (# of Orders From Existing Customers) / (Total Orders)
• Order Acquisition Ratio = (Marketing Expense/Number of Orders) / (Marketing Expense/Visits)
• Conversion Rate = (Number of Sales) / (Visitors)
• Page Views per Visitor = (# of Page Views) / (Visitors)
• Average Time on Site

(Eric Peterson even offers his own complex engagement calculation, and discusses the web analytics community’s challenges to it.)

Once a set of metrics is selected that directly relates to potential engagement on your site, constructing a weighted average of the set might help. This needn’t be some painfully complicated multivariate regression model, needing someone with rocket science experience like our buddy John to make sense of it; just some metrics that can serve as a collective vital sign to measure how well your site is engaging people while carrying out its core mission.

Jim Novo makes a potent case for using visitor recency to measure engagement and how to leverage it. If you can collect information relative to the history of each specific user, and the recency of their visits, his approach can send your ROI skyrocketing.

Novo’s approach shows how recency can explain a visitor’s potential value, given their propensity to return to your site frequently, as represented by the horizontal axis below. The vertical axis, meanwhile, shows how often the visitor has taken the action being measured.

Although fuzzy and directionally correct at best, engagement is vitally important to measure because it’s a predictive metric. If your current visitors are exhibiting behaviors indicating that they’re engaged, they’re likely to return soon — and often. If you see signs that visitors are becoming less engaged with the site, it’s safe to suspect that recent changes to your site or the flow of its traffic may be working against you. Either that or your competition’s finally outdone you. Regardless, it’s always good to know when to hang it up and try something new.

Engagement can also be a useful measure of the effectiveness of your branding. If visitors are showing signs that they’re engaged with your site, they’re generally showing affinity for your brand.

While engagement has become a heated buzzword, and arguably an excuse, it’s important not to be mislead. Since it’s a state of mind for your visitors, and therefore not easily quantifiable, there’s no simple way to measure engagement. But attempting to measure will help you to keep your site from proposing on the first date.

Do you have any unique approaches for measuring engagement? Let us know. We’d love to get a conversation going in the comments.

The Conversion Rate (CR) tracks how well your website is achieving its main objective. This goal will vary depending on the type of site. An e-commerce site’s main objective, of course, is to get people to buy product. Here’s how a commerce site would calculate conversion:

CR = Number of Sales / Visitors (A metric often related to CR, especially with content-driven sites, is Take Rate.)

The higher the CR, the better the ROI (Return on Investment). Improving conversion increases the amount of money you can make with the same amount of traffic. To determine exactly how conversion affects ROI, calculate your Order Acquisition Ratio.

Understanding what affects conversion requires an in-depth look at the entire online marketing strategy. To begin, break down the steps involved in the site’s sales process. For instance, a retail site would look like: Homepage -> Category Page -> Subcategory Page -> Product Page -> Cart -> Checkout.

Along with these steps, the Exit Rate for each must be calculated. Exit Rate shows how many people are not converting by leaving the site at various stages in the sales process — often thought of as a funnel, although it’s slightly more complicated in reality. Still, the funnel gives us a visual representation of where to find the biggest leaks, so we can fix them and optimize the experience to recapture money that would otherwise be left on the table (if you don’t mind me further mixing metaphors).

Each stage in the process is a micro-action that will lead the visitor closer to the macro-action of converting (e.g., purchasing). The best way to diagnose why various steps, or micro-conversions, aren’t performing as well as they should is to ask three simple questions:

1. Who is the audience at this step?

2. What action would we like them to take?

3. What information do they need to feel confident enough to be compelled to take that action?

When asking these questions, it’s important to recognize that a website is not one size fits all; it should be many sizes fit all. Multiple scenarios, or pathways through a site, need to be planned ahead of time in order to suit different personality types and how they prefer to behave online. It’s also important to take into account how close a person is to making a decision. Are they early on in their buying process and just researching, or do they know exactly what product they want? (Bryan’s recent screencast shows how to appeal to different buying modes and temperments.)

To help understand why visitors may not be taking the necessary micro-actions to move closer to converting, the Hierarchy of Optimization provides a useful guide in addressing potential problems. This hierarchy forms a pyramid and starts with basic requirements, then moving higher up toward the top, where persuading visitors to take the action is the highest aspiration.

Let’s look at them in reverse order…

• Functional. Does the site offer something that the visitor needs?
• Accessible. Is the visitor able to access whatever it is that the site offers?
• Usable. Are there unnecessary difficulties or roadblocks that cause friction for the visitor?
• Intuitive. How well is the site’s sales process structured? Is it compatible with how the visitor likes to buy?
• Persuasive. Does the visitor truly want and understand the problem by clearly knowing that it will solve their needs? Do scent trails carry through to the more funnel-like, conversion point on the site (e.g., the checkout process)?

If your CR is less than 10%, you should focus on optimization — but there’s always room for improvement. Along with taking steps to remove obstacles that impair the visitor’s buying process, causing them to waste their time thinking instead of doing, the most potent tool is empathy. Anticipating your visitors’ motivations will help you to answer their questions at each step — and that requires a good deal of planning.

Remember, a website exists to help its visitors achieve their goals. Give people visiting your site all of that, and the ROI will be well worth the effort you put into it.

1.) Visits to your site

2.) Number of orders placed

3.) Total marketing expenditures (which can include fixed costs associated with maintaining the site, but let’s focus primarily on marketing expenses)*

With these variables in mind, we will get two contributing metrics with which to calculate order acquisition ratio.

Cost per Visit (CPV) = Marketing Expense / Visits

CPV measures how much you’re paying to attract each single visit to your site.

Cost per Order (CPO) = Marketing Expense / Number of Orders.

CPO tells you how much you’re paying in terms of marketing budget to get a visitor to your site who converts and becomes a customer. This is directly related to your Conversion Rate.

Order acquisition ratio is then calculated by taking the CPO and dividing it by the CPV.

Order Acquisition Ratio = (Marketing Expense/Number of Orders) / (Marketing Expense/Visits)

It should be a positive number (if not, you’re in trouble). The lower the ratio, the better your marketing budget is being used. Some of the best ways to lower OAR include:

• Boosting conversion! Increasing conversion lowers your CPO. Since conversion is the website’s primary goal, there are literally thousands of factors that affect conversion. (Conversion is so important to online health and wellness that improving is integral to everything we do for clients.)

• Improving organic search rankings with relevant content. When you spend the time and money to create relevant content, the CPV and CPO should both drop — and you’ll further lower CPO by converting more visitors.

• Targeting quality traffic sources. In your analytics, segment your site’s incoming traffic by source in order to identify where to put those marketing dollars. (Bounce Rate is a great starting point for this.)

• Optimizing PPC campaigns. With an effective PPC campaign, you’ll be able to convert more visitors. While this will increase your CPV, but when done correctly, it will yield a larger decrease in CPO by converting a higher percentage of traffic.**

Order Acquisition Ratio is based on more traditional bored boardroom metrics because it has a close relation to traditional financial statements. It has nothing to do with “Web 2.0,” “Web 1.0,” or Facebook. So, it’s great for sharing with your boss since it’s directly tied to the bottom line. There’s even a cousin to this metric; a non-ratio, cold-hard-cash version of the Order Acquisition Ratio known as the Order Acquisition Gap. To calculate it, simply subtract the CPO from the CPV to get a negative number. This number shows how much money you waste in marketing dollars on visitors that don’t convert.

Order Acquisition Gap = CPV – CPO

There are other close relatives in this family of metrics, all of which focus on costs associated with generating new customers. To calculate these similar metrics, you’ll need to be able to track the same figures discussed above — except they need to be further segmented. Track the following numbers, and you’ll also benefit from a few additional metrics (listed in the bullet points below):

1. New visitors to the site.
2. Number of orders placed by new customers.
3. Total new customer marketing expenditures.

With these figures you can see the effectiveness of your new customer acquisition efforts:

• Customer Acquisition Cost = (New Customer Marketing Expense) / (Total New Customer Orders)
• New Customer Cost per Visit = (New Customer Marketing Expense) / (New Customer Visits)
• Customer Acquisition Gap = (New Customer Marketing Expense/New Customer Visits) - (New Customer Marketing Expense/Total New Customer Orders)
• Customer Acquisition Ratio = (New Customer Marketing Expense/Total New Customer Orders) / (New Customer Marketing Expense/New Customer Visits)

[*Regardless of the expenses you include, it's crucial to set a standard and stick with it in order to accurately measure and account for the specific impact of such changes.]

[**When monitering your order acquisition ration, never tolerate any increase in the cost per visitor without an accompanying decrease in cost per order.]

To qualify as a bounce, analytics tools will typically take all visitors who only see one page and leave. Time may also be used to qualify a bounce (e.g., any visit under 10 seconds as a bounce).*

To calculate bounce rate, take the number of bounces and divide it by the number of visits. You can measure bounce rate for your entire site and measure the bounce rate for specific landing pages.

Example: 10,000 bounced visitors / 30,000 total visitors = 33% bounce rate.

There are many elements that will effect the bounce rate. The main idea is that people coming to your site are following a scent. If they arrive on your site and have no trace of the scent they were following, they will immediately leave. Some of the main elements to investigate when looking into your bounce include:

• Traffic source. Are certain traffic sources consistently delivering visitors that are more likely to bounce?
• Inbound links to your site. Look at the link and surrounding text that links to your site. Do the links give the visitor an accurate idea of what to expect on your site, and does your site contain what the link leads them to believe they will find on the page?
• Keywords. If you are measuring the traffic coming from search engines, are the keywords the visitor searches for visibly present on your landing page?
• Stating your unique value. Do you have a unique value proposition? Is it present across the site and particularly on your landing pages?
• Page title. Do you have a relevant page title that is telling of what your page contains.
• Headings and headlines. Are there relevant headings and headlines that tell a visitor where they are and what to expect.
• Global Navigation. Is your navigation intuitive? Does it use words and naming conventions that your visitor understands? If your sitewide bounce rate is high, this sitewide feature may be contributing.
• Load Time. Are your pages loading too slow for people to even give them a chance?
• Page descriptions. Are the page descriptions you created relevant to the page?
• Perceived length. If your pages are very long, they may be perceived as a waste of time, thus causing people to bounce. This also relates to forms. Are there any intimidating forms present?
• Look and feel. Does your site’s aesthetic match what a site in your industry typically looks like? Is your site cluttered and lacking in white space?
• Server. Are you testing to see if your server is up to par?
• Browser compatibility. Are different browsers viewing your pages correctly?

Bounce rate is a great starting point when analyzing important aspects of your site. Here are some of the important elements you can measure with bounce rate:

• Where should your marketing spend go? By getting information about which traffic sources are delivering lower quality traffic, you can optimize these campaigns by analyzing the elements listed above and in the meantime divert your money into campaigns that are outperforming them.
• Which keywords should you be paying for? Use bounce rate a starting point for analyzing your keyword performance.
• Are your optimization efforts successful? If you are making changes to a page or sitewide feature, has the bounce rate gone up or down?
• How effective are your landing pages? If your landing pages are bouncing more than one out of three people visiting your site, you may want to investigate why this may be happening.

Avinash Kaushik has even called bounce rate the “Sexiest Metric Ever” — and I agree. As far as web metrics go, bounce rate is sexy. Don’t ignore the other metrics in light of bounce rate’s beauty.

So, get testing, and be sure to check out the next installment, where we cover “Order Acquisition Ratio.”

. . .

*It’s important to check what your analytics program considers a ‘bounce’ before analyzing any data.

[Editor's Note: Want to get less bounce to the ounce? Future Now can help.]

Key Performance Indicators or KPI’s (define) are the critical Web metrics you should be monitoring to evaluate the effectiveness of your site. Key performance indicators may differ depending on the business topology (ecommerce/retail, lead generation, content or self-service/support), but understanding them broadly is critical to any organization’s online success.

In this first installment of Unlocking KPI’s, we’ll discuss the “take rate”; the amount of people taking you up on a given offer on your site. It’s not necessarily your “conversion rate,” because that term is generally reserved for the site’s primary goal, or macro-conversion (e.g., acquiring a new lead, processing an e-commerce order). Take rate is used to measure micro-conversions. These can include:

• Newsletter subscriptions
• Downloadable materials such as ebooks
• Case studies
• White papers
• RSS subscriptions
• “Add to Friend” links for social networking sites
• Up-sell and cross-sell offers added to shopping cart

To calculate take rate, simply find the number of successes for the action being measured and divide it by the number of people exposed to the action.

Example: Lets say I write an ebook about where to find the best pizza in Brooklyn. 8,000 hungry people downloaded this ebook from my site last month. And during that month, my site received 80,000 visits. Of those visits, there were 40,000 unique visitors.

Take rate = 8,000/80,000 = 10%

This can also be done with unique visitors.

Take rate per unique visitor = 8,000/40,000 = 5% 20%

So now that we have the calculation behind take rate, lets look at what influences the take rate. Ultimately, the presentation of the material you want visitors to take has to be perceived as relevant and valuable. The specific elements that will influence how a visitor perceives your presentation need to be tested and optimized to find out what is working best. You will know you are moving in the right direction when your take rate increases.

Here’s a list of some main elements to test on your site that will influence its take rate:

• Call to Action. Does it consist of an imperative verb and an implied benefit? Is it clearly noticeable?
• Title. Is the title of the section containing your offer relevant and noticeable?
• Point of Action assurances. Are you easing the visitor’s concerns about taking the action? For instance, two commonly overlooked assurances regarding newsletters are privacy policy (i.e., that their email address will not be shared with third parties) and telling the visitor they can cancel anytime.
• Benefits associated with the offer. Are you speaking in terms of benefits that the people who accept your offer enjoy? Are you picking the most persuasive benefits relative to the segment of traffic you see the page attracting?
• Tell the visitor what to expect. If the material is downloadable, tell the visitor how large of a download is required. If it’s a newsletter, tell them how often its sent.
• Location of the call to action. Are you presenting the call to action (e.g., text link to white paper download, newsletter sign-up) above the fold? Is it in an area where the visitor can expect to find what your offering?
• Targeted keywords. What are the keywords you targeted to attract people to the page the offer is presented on? Are they relevant to your offer?
• Look and feel. Does the offer look like a banner ad? Is it contrasted against the rest of the page enough to stand out and be noticed?

Now that you have a framework of understanding what a take rate measures, and elements of its presentation to test to optimize, lets have a final look at why take rate is important to your site.

In planned scenarios, the take rate can be viewed as a leading indicator for the short-term performance of your site. Viewing a take rate as a micro-conversion point to indicate interest in your macro-conversion goals will tell you if people are moving forward in their buying decision process. If your take rate increases, you’ll qualify more people to move to your macro-conversion goal — like plugging holes in a leaky bucket.

For the next installment of Unlocking KPI’s, we’ll cover the ever-important “bounce rate.” Until then, if you have any questions, we’d love to hear from you in the comments.