We have access to more data than God wants anyone to have. Thus it is
not surprising that we feel overwhelmed, and rather than being data
driven we just get paralyzed. Life does not have to be that scary. In
fact a data driven life is sexiest digital life you can imagine.
In this blog post we are going to bring the sexyback. I am going to
attempt to significantly simply your life by recommending the critical
few metrics you should use to analyze performance of your digital
marketing campaigns and website. You'll be able to quickly go from "omg
what can I do!" to "omg what am I going to do with all the money and
fame I'm earning!"
The approach I'm going to use is to 1. Use my Acquisition, Behavior
and Outcomes framework to ensure an end-to-end view of important
activity and 2. Recommend metrics / KPIs you can use based on the size
of your company.
Each recommendation comes with hints on what analysis to perform once
you have the data, and what changes you could make to your campaigns,
content and overall digital strategy. [A summary in pictorial format is
at the end of this post.]
Excited? Let's do this!
Best Metrics / KPIs for Small Business Websites
Small business websites are a very fragile ecosystem. People working
hard to do the best they can on the smallest possible budgets. But not
to worry. They have to start with just four simple metrics to start
rocking!
Acquisition:
Clicks? Visits? Backlinks? Impressions? No. We have something magnificent.
Cost Per Acquisition.
Obsess about this metric. You have very little money. You need to
know, obsessively, what you get for it. This metric delivers that
insight. Oh, and everything has a CPA (not just your paid search or
display/banner ads). If you are doing SEO then you are likely paying for
someone. That's the cost.
Kill things that don't have an optimum CPA. Invest more in ones that do. Simple enough, right?
Tip: Remember this is just cost, not profit. If your product costs
you $15 to make then, in the above scenario, you are shipping a crisp $5
bill along with every Social Media order!
Where is it? Most likely in Excel. For Search it is
in your Google Analytics or Omniture Site Catalyst reports. But for most
other programs (Affiliate, Email, Social, Display) your Cost is likely
sitting outside your web analytics tool. So extract the # of
conversions, import into Excel, add a column for Cost, do the math, sing
or weep (based on what the data says!:)).
If you are paying someone to do web analytics and this metric is not
on top of the dashboard they've created for you, it might be time to say
sayonara to them.
Behavior:
Page Views? Time on Site? No. You can do so much better!
Bounce Rate.
I continue to be a believer in trying to prompt love at first sight.
Okay, okay, I'll settle for delivering relevance. :) Bounce Rate helps
you identify campaigns where you might be targeting wrong people (who
then come to your site and leave right away) or sending relevant traffic
to irrelevant (and often flash-filled hideous) landing pages.
Bounce rate helps you find campaigns and landing pages that need to be killed / improved. Everyday.
Where is it? Standard metric in every web analytics
tool worth anything. Look at your All Traffic Sources report and your
Landing Pages report.
Checkout Abandonment Rate.
I find the fastest way to make money is to take it from the people
who have already decided to give it to you. Obsess about checkout
abandonment rate (the percentage of people who click Start Checkout to
those who complete that process).
Focus on checkout steps with the highest abandonment. Tweak like
crazy. A/B & Multivariate tests are a good option. But you are a
small business… so just take away as many fields as you can, play with
where to show shipping cost (I vote for way up front), reduce the number
of checkout steps if you can, ask for account creation at the end of
the process rather than at the start. Try, test, measure, be rich.
Where is it? In Excel. Or if you use Google Analytics: In
Paditrack for free. (Google Analytics' native funnels are pretty sub optimal, ignore that entire feature.) For other tools: In
KissMetrics.
Create a funnel just for the checkout process (from clicking Start
Checkout to Thanks for your Order) and both these tools will give you
the metric automatically. They also allow you to segment the data! Make
love to it.
[Bonus:
What is abandonment rate?]
Outcomes:
My favorite Economic Value? No. As a small business I recommend…
Macro Conversion Rate.
You are a small business. Obsess about conversion rates, and
everything connected to improving them. What products are people buying?
Every single day (okay week) look at the All Traffic Sources report and
seek out the Conversion Rate metric. Ruthlessly punish sources that are
not working well and reward the pretty babies. Be they Earned, Owned
and Paid media – oh and have a marketing strategy that has each of those
elements or as a small business owner you are not going to win a lot.
I love creating an advanced segment with just the people who buy
twice the average order size. I call them the Whales. Look at sources,
locations, product bundles purchased, keywords and campaigns and all
that to learn where/how you can find more Whales.
Where is it? Standard metric in all analytics tools.
Remember to look at both the rate and the raw number of conversions for
context. People make silly decisions when they don't do that.
That's it!
You are a small sized business and these four simple key performance
indicators will literally rock your world as soon as you start measuring
them. Cost Per Acquisition. Bounce Rate. Checkout Abandonment Rate.
Macro Conversion Rate. Don't look at any other metric until you feel
you've mastered them.
Tip: If you've hired the right analytics talent/consultant to help you, they'll be measuring these fabulous four.
Best Metrics / KPIs for Medium Sized Business Websites
What if you are a medium sized business? What key performance indicators are optimal for you?
First, you are going to measure the KPIs mentioned above. But because
you are running a bigger and more complex business you'll also measure…
Acquisition:
CPA
+ Click-through Rate
While CPA is a macro metric about your campaigns' bottom-line
performance, Click-thru Rate (CTR) is a deeper dive into analyzing the
creativity and relevance of your affiliate deals / search listing /
blinky banner ads.
In the context of Search (Paid or Organic), the text in your ads, the
number at which your listing is ranked, the match between the user
query and your ad's intent all help you receive a higher CTR. And if
someone comes to your site (and does not bounce!) then you get an
opportunity to convince them of your product or service's glory.
Small tweaks to the subject line of your
email campaigns
can have dramatic improvement in CTR. Recency and Frequency capping of
your display remarketing campaigns can have a huge impact. Changing
demographic targeting options in your Facebook ads can work wonders.
Etc., etc., etc.
Put another way… CTR helps you understand if you showed up at the
right place for your first date. Are you dressed okay. And if you are
smiling the right smile. Helpful to know, right?
Where is it?
Everywhere. Start at a campaign level. Drill down to individual creatives. Kill badness. Promote goodness. Rinse. Repeat.
Behavior:
Bounce Rate
Checkout Abandonment Rate
+ Page Depth
A very tiny percentage of visitors to your site will see more than a
couple pages. That's the internet for you. As you improve the user
experience, information architecture and relevancy of content on your
site, it is important to keep an eye not on the rather useless metric of
Average Page Views per Visit or Average Time on Site but rather on the
distribution of page depth. Here's how that picture might look like
(from a post I wrote in July 2006!)…
From the deep detail reported by your web analytics tool you can
choose to aggregate into buckets you most care about (like mine above).
Categorizing the visits into
Abandoners, Flirts, Browsers, One-off-Wonders, Loyalists
will dramatically change your view of content consumption. Over time,
as you move to deeper consumption, you'll see direct business rewards.
The above image emphasizes a sale/conversion at the end, but even if
you are a content-only website improving Page depth helps you because
more pages equal (at the very minimum) more ad impressions!
Where is it? The final table will be in Excel. If
you use Google Analytics the data you need is here: Audience >
Behavior > Engagement > Page Depth tab. If you use WebTrends,
Yahoo! Analytics, Coremetrics please click around to find the data. They
all have it.
+ Loyalty (Count of Visits)
If Page Depth helps you optimize for a single session experience,
Loyalty helps you optimize pan session behavior. Put another way… how
good are you at getting the same person to visit your website multiple
times? For ecommerce or non-ecommerce websites, loyalty can mean the
difference between life of survival and raking in profits like crazy.
First set a goal for the % of site Visits you would like for people
who've visited more than x times. [Set a goal for x too. :)] For
ecommerce websites use your Days to Conversion report (more on this
metric below) to set your goal. For content sites perhaps mirror your
content update schedule. If you are the
New York Times and you update the website 24 times a day then should the average person be visiting the site at least 90 times per month?
Your BFF, as always, is analysis and not just reporting the metric. Create this simple segment in five seconds…
Apply to your keywords and campaigns and referring sources reports
and identify which sources drive loyal traffic. Apply it to your content
reports and figure out which content drives Loyalty (Sports? Op Ed?
International? Cat Stories?).
Where is it? In every web analytics tool on the
planet. If you use Google Analytics the data you need is here: Audience
> Behavior > Frequency & Recency.
Outcomes:
Macro Conversion Rate.
+ Micro Conversion Rate
Pick your favorite benchmark and you'll notice that less than 2% of
visitors convert. Focusing on just the Macro Conversion Rate means you
don't care if you received any business value from the 98% that did not
convert. I refuse to accept that uber-lameness.
Identify your
Micro Conversions (/Goals) and obsess about the long and short term business value they deliver. You'll quickly realize the
Economic Value
they create for you is often far greater than the Revenue your Macro
Conversion reports! And optimizing for that will ensure you win HUGE.
Where is it? In Google Analytics it is here:
Conversions > Goals. Even if you are a content site the data is
there. Details in the Goal URLs report. Setting up goals takes two
minutes, setting goal values might take you a week (see
measurement strategies here). If you use other tools, please check with your vendor.
+ Per Visit Goal Value
This
Key Performance Indicator
1. helps you move beyond the obsession of focusing on the 2% (because
it forces you to focus on Every Visit!) and 2. encourages you to create a
business that uses the web to deliver multiple outcomes to your
visitors.
Every visitor will not convert, but every visitor will, hopefully,
deliver some Economic Value. Looking at this metric helps you identify
Goals that contribute higher value, and and understanding of simple
things like where you should focus on. If Twitter delivers 87 cents of
Per Visit Goal Value and Google delivers 97 cents then perhaps I want to
keep focusing on my SEO strategies rather than following the advice of
the Social Media Guru who's just informed me Search is dead.
Where is it? In pretty much every single report in every single web analytics tool. Click on the Goals tab.
That's it!
For a medium sized business we ended up with nine metrics. Seems
about right if you are making more than five million dollars of economic
value. They key difference from websites that are in the small business
category is that we are going to shoot for multiple conversions, deeper
site engagement and better analysis of acquisition efficiency.
Time now to deal with the big boys and girls… large websites!
Best Metrics / KPIs for Large Sized Business Websites
Acquisition:
CPA
Click-through Rate
+ % New Visits
My choice of this metric perhaps betrays my refusal to rest on my
laurels. There are clearly a finite number of people in the world
relevant for any business. But staying hungry and staying foolish is a
popular mantra for me. I use this metric to constantly calibrate my
acquisition strategy to understand which inbound marketing efforts are
bringing new "impression virgins" to the business.
If you look at your Earned, Owned and Paid media then this metric is
especially important for your Paid media efforts. Except for your
re-targeting / behavior targeting campaigns, you want your paid search,
display, affiliate, and social efforts to bring new visitors to your
franchise.
Where is it? It's like air, everywhere! Don't forget to segment for optimal analysis.
Behavior:
Bounce Rate
Checkout Abandonment Rate
Page Depth
Loyalty (Count of Visits)
+ Events / Visit
Every awesome large website delivers complex experiences (videos,
demos, dynamic slideshows, configurators + + +) via sophisticated
technologies (Flash, AJAX, Gadgets + + +). Almost all of the time we
leave measuring their effectiveness on faith (or the HiPPO). I love
event tracking because it helps us measure these often astonishingly, expensive initiatives.
Of 110,842 visits to the site, 9,054 interacted with your delightful
experiences and each of those visits had 2.24 Events per Visit. Is that
good? Bad? Could be better? Are these 2.24 interactions delivering
higher economic value to your business?
In the above case the answer was a big NO. In your your case you'll
decide based on your strategy and goals. At the end of the analysis
you'll make significantly smarter decisions about your content
(especially because the Analysis Ninja that you are, you'll triangulate
performance of this metric with first, Page Depth and, second, Loyalty).
Where is it? Most web analytics tools do some type
of event tracking. Please check with your vendor (it might not be called
event tracking in their lingo, just describe my first paragraph above).
In Google Analytics the data is here: Content > Events.
Outcomes:
Macro Conversion Rate.
Micro Conversion Rate
Per Visit Goal Value
+ Days to Conversion [or Time Lag for Content sites]
Another pan session metric I adore.
Life, no matter how hot you are, is not a series of one night stands.
Yet because of how they analyze the data most companies end up
optimizing their web marketing campaigns for one night stands. Come here
and convert NOW! If yes: Oh, I love you. If no: Kill the campaign!
That approach is not just short-sighted; it is an insult to your
visitors. Convert them at a pace they are most comfortable with. This
metric helps you understand how quickly or slowly your visitors convert.
You can, at the very minimum, change your campaign messaging and come
hither calls to action and adjust your landing pages. If the Days to
Conversion are much longer, then create a robust (slow dance) micro
conversion strategy.
If you have a non-ecommerce website then there is something delightful for you in the Google Analytics
Multi-Channel Funnel reports. Checkout the
Time Lag report
. It is showing you exactly the same data as the Days to Transaction
for Ecommerce sites. The metric you see immediately above is called
Conversions. It is essentially your Goals (/micro conversions).
Optimize your "
hello, nice to meet you, what would you like, here
is what I have to offer, why don't you check with your spouse, come
back and check it out again, multiple times, I'm still here, you ready
to convert / deliver economic value, here's how… " process.
Where is it? Days to Conversion is in the Ecommerce
section of your web analytics reports. It is a standard report. (Don't
forget to segment your sources. Deep insights await.) Time Lag may or
may not be a standard report in your tool. Please check with your
vendor. In Google Analytics it is a standard report here: Conversions
> Multi-Channel Funnels > Time Lag.
+ % Assisted Conversions
This is the newest metric I've made standard for all my clients / partners / BFFs. And it is a sweetie.
Assisted Conversions
builds on the above mental model. It takes a while for a majority of
your visitors to convert (macro and micro conversions), so why does
almost all of web analytics focus on single channel analysis and
optimizing that single channel in a silo? Just because the Affiliate
click was the last one before conversion should it be optimized for that
conversion? Especially if the Visitor originally came via Facebook (or
Google or whatever)?
How many of your conversions had more than one ad / media / marketing
touch prior to converting? Really smart Analysts at really successful
companies understand that…
…and then use that data to optimize the
portfolio of channels rather than individual channels for the company.
Even if you don't do portfolio optimization (and desperately hope you
do) you can easily see how the above data will cause you to execute a
different marketing optimization and expectation strategy for Email
(1.18 Assist / Last Interaction rate) vs. Organic Search (0.61).
I am being modest when I say that this metric and subsequent analysis will have a fantastic impact on your company.
Where is it? % Assist Conversions may or may not be
in your web analytics tool. Please check with your vendor. In Google
Analytics you'll find it here: Conversions > Multi-Channel Funnels
> Assisted Conversions.
And we are done!
For large businesses we've identified 13 key metrics that would give a
robust end-to-end view of business performance. The key difference vs.
medium sized businesses is that we are really, really, really focused on
pan-session (multiple visits) behavior. Put another way, we really care
about people here and not just a single visit.
Here is a summary of the metrics I am recommending in this post…
I hope the picture above will quickly help diagnose where current gaps in your measurement strategy might be.
Additionally if you are a small business you'll know what else to
measure when you start to become medium sized and if/when you cross that
threshold you'll know the metrics that come with your large business
status. :)
You'll notice that I'm not focusing on KPIs like AdSense Ads CTR or Page Load Time or Actions per Social Visit or
Search Exits (I love this metric!) or
Content Distribution vs. Content Consumption Rate or
Conversation Rate
(in case of a content site) etc. That's simply because these KPIs tend
to be unique to the type of business you are running. My strategy above
was to focus on just the KPIs that would be applicable across all types
of businesses.
That brings me to a very important point.
While it is my hope that you'll find my recommendations above
relevant and yummy… the most optimal way to identify that best key
performance indicators for your company will come using the process and
structure outlined in the
Digital Marketing & Measurement Model.
I'll end with the thought I started this post with… we have more data
than God wants anyone to have. But web analytics does not have to be
scary or impenetrable. Use the roadmap above, focus on all three
elements (acquisition, behavior, outcomes) and I promise you'll soon be
on your way to being as happy as God wants everyone to be.
I wish you all the best!
Okay as always it's your turn now.
Does your business use the above recommended metrics / key
performance indicators? Do you have an absolute favorite metric that's
not mentioned above? Which metric above do you find most useful? Which
one most useless? What is your strategy for identifying the most
relevant metrics?
Please share your suggestions, critique, and helpful best practices via comments.
Thank you.
PS:
Couple other posts on metrics / KPIs you might find interesting:
99.9996253% of Web Analytics reports produced are utterly useless. 
Someone asked me this very simple question today. What's the difference between web reporting and web analysis? 
