Analytics Guide - KPI’s

The problem with most e-commerce marketing strategy today is that companies don’t understand how they use things like web analytics. Most e-commerce directors or web marketers are given a budget and told to stick to it, and good analytics don’t usually come cheap. Without web analytics you can’t even begin to measure key performance indicators (KPI’s), which should be a part of any good e-commerce strategy. We often see that marketers face a problem in that they know they need Web Analytics, they just don’t know why they should pay for it and don’t know what to measure. This five part series of articles will hopefully help clear up some of the things that marketers should measure as key performance indicators concentrating on one KPI per article.

What is a key performance indicator?

In website measurement terms a key performance indicator is a metric which will help your organization define and measure progress toward your websites business objective. Key Performance Indicators are quantifiable web site measurements that reflect whether you are successfully meeting or falling short of your websites business goals.

That’s quite a boring definition of a KPI even if it is important, so in a last ditch attempt to keep you from falling asleep lets talk about Formula 1 (or the Indy 500) and the KPI’s they use.

What has Formula 1 got to do with KPI’s?

There are many minute factors in formula one that constitute being a winner. Everything down to the performance of the fuel, the tires, the speed of the pit stops, the quality of engine parts, the weight of the car, it’s aerodynamic ability, everything is measured and tested, long before the driver even gets into the car. The difference between the winner of a formula one race and second place can be as little as a hundredth of a second.

That extra hundredth of a second could be because the fuel used on that particular race day allowed the driver to get more out of his car than the guy in second place.

How did the race team know which fuel to use?

Because before hand they had tested maybe 50 different types, each one tuned for the demands of different circuits - or even different weather conditions.

They got that extra performance by knowing the key performance metrics of the fuel, so they could say with confidence that ‘fuel a’ was better for their car if ‘condition a’ was satisfied.

Condition ‘a’ might have been the cars weight that day the type of road surface and the weather. When all matched together it meant that the race team had a particular choice to make when selecting the fuel for the car.

The web site KPI I’m about to discuss is the fuel that powers your e commerce sales and lead generation strategies. Both are measured by practically all web analytics systems, but both not commonly measured to their full potential.

Page views per session, the fuel behind your web business objectives

For those of you that know why page views and sessions are important bear with me for a paragraph or two. For those of you that don’t here we go.

Why are page views and sessions important?

Page views are a metric that represents the amount of times your pages are viewed by the people that visit your website. On it’s own it might be an important measurement if you’re a very well trafficked content website looking to sell B2B advertising in the form of some kind of ad (banners for instance).

If you can accurately say to an advertiser that you have 10 million page views per week, it’s very likely that this alone will be one of your KPI’s, simply because if it goes down, your advertisers will most likely not want to pay you as much to advertise with you. It would be important in this case that you keep the page view count at least to the same level every week in order to keep the same level of banner revenue for example.

Sessions represent the amount of users (people) visiting the website over a given period. Again it’s a very important metric to know, the general idea being that more of the right kind of people visiting your pages will eventually mean your bottom line improves.

By combining these two metrics however we get a much more powerful way to use the figures.

Combining the two metrics as one KPI is done by taking a ratio of page views per session as an average. So if 1000 visitors viewed 2,000 pages the mean page views per visit KPI is 2, (2,000 / 1000 = 2).

Why is this combination important?

If your website e-store system required that you need to view 5 pages in order buy a product and your KPI is telling you that your site gets an average of 2 page views per session, then the site is under performing badly.

If it takes 5 pages for your visitors to buy something then your goal should be to get an average KPI of at least 5 page views per session. Otherwise it means that the vast majority of your visitors aren’t going deep enough into the process.

Much more importantly deciding on a KPI like this is giving you a measurable objective to work towards. If you know that the vast majority of people are abandoning your website after only viewing one or two pages there is a problem which you need to work hard to solve.

It means you know that somewhere within your web analytics you will be able to detect the areas of abandonment that are the problem. The simple fact of the matter is, if you have a low page views per session KPI then your analytics system (if it’s any good), WILL be able to show you where the problem lies. Once you have found the problem areas, congratulations, you’re becoming a web analytics expert. Now you know which pages have the problem and you just need to figure out the why.

Figuring out why is the real secret

It may be that you’re driving the wrong kind of visitors, such as people who aren’t interested in your offer. It may be that you don’t have enough compelling content to keep visitors interested. It may be that your shopping cart has a problem with abandonment or your lead generation process is too long or has a scary form to fill in. In all cases your page views per session KPI is the first warning signal and you can monitor it quite easily.

Other warning signals

The other side of the coin is if this KPI is too high. What if you have a 1000 people viewing 20,000 pages? Unless you have incredibly compelling content there is a problem. It probably means that people are very interested in something but can’t find it on your site. So having this KPI be too high is also a warning flag that means you need to analyze your web analytics and see where the problems are. Are people skipping around pages? How long do they stay on your site? (another KPI we’ll come to in the next article of this series), have you got site architectural problems with navigation?

Too high or too low, it’s all useful measurement

The point is to find out how to use the fuel remember? If you start measuring page views per session as a KPI, you will begin to see if you have a problem or not. You can get as deep and as sophisticated as you like, I’m just trying to show you the idea with this article.

For instance you could measure page views per session of visitors only hitting your shopping cart, or lead generation system. Content websites could use page views per session in particular content groups to work out how compelling particular kinds of content are. It all depends on the web site business objective.

To summarize

Developing KPI’s allow you to measure things on your website which directly effect your business objectives. In the example I’ve demonstrated by finding ways to improve the number of pages people view per session there is more chance that those users will complete your calls to action (buy, register, subscribe, whatever web business objective you may have). This first KPI that I’m suggesting you consider is an early warning signal that something is wrong and it’s very easy to determine how to set a measurement. The next KPI I’ll discuss is time spent on site and why it is also important as well as how you can use this in combination with page views per session.

Web masters spend a great deal of time carefully optimizing their home page, tweaking the keyword density, the meta tags, making sure that they have all of the so called proper on page factors just right.

And there it stops. The internal pages of a site end up getting treated like so many red-headed step children – just hanging there in cyberspace with little regard for their own Search Marketing Factors.

This is a killer mistake. One of your primary goals as a web master is to ensure that if you’re selling a product, you’re able to have your site found when people are looking for that product.

Now, one of the most common mistakes a web master makes is Optimizing their home page for too many keywords. They think that they can cause their home page to be ranked well for all of their products or keyword phrases.

And that’s just not true.

So, what’s the key to having your site rank well for a variety of different search terms?

Notice that I said “Your Site”?

The key is to make your site full accessible to a search engine spider.

You see, Google and Yahoo! rank pages – not sites. Ah HA!

That means that, all things being equal, any one page in your web site has the ability to rank well.

Now, your home page will usually rank better for a given keyword than an interior page (and there’s a reason for this), but if you structure your site the correct way, any interior page of your site has a fantastic opportunity to rank for a very specific keyword or keyword phrase.

That’s why you need to treat each page as a Search Engine Optimization Opportunity.

Make sure you spend time optimizing for every page in your site. If you’re having trouble ranking for a particular keyword, write an article or newsletter that uses that keyword as the subject, throw it onto your site and — MAKE SURE THAT IT CAN BE CRAWLED!!

That’s SO very important. You need to make sure that all of the pages in your site are able to be accessed from the home page. You see, most of the time, a Search Engine Spider will enter your site from your home page. There, it will begin to crawl through your site via the links it finds there. If one of your interior pages can’t be accessed from the home page, it could take a long time, or maybe even never, for the spider to find that page.

The moral of the story? You can’t cause your home page to rank well for more than 2 or 3 specific keyword or keyword phrases. In order to place in the SERPS for a number of different terms, you need to rely on other pages in your site that are optimized (both on page and off) for those alternative keywords.

And the best way to ensure that those pages have a fighting chance at finding their way onto the first pages in Google or Yahoo!? – make sure that your site is structured so that a spider can find just about every page in your site from links on the home page.

Finding that difficult to do?

In the next chapter, we’ll talk about using a Site Map to help the Search Engine Spiders find their way to the pages you want them to.

*TEST* To quickly check and see how many pages of your site have been indexed by Google, go to the normal Google search box and search as follows:

site:yourdomain.com

This will tell you at a glance not only how many of your pages have been crawled by Googlebot (Google’s spider which shows up in your server logs), but more importantly, it shows you how many pages have been actually indexed.

In the coming lessons will talk about mistakes to avoid in order to get high rankings, but Step One is to make sure each page of your site can get crawled and indexed. And remember, use the interior pages to rank for all your relevant keyword phrases – it’s not all about the home page.

Knowing how to use offline advertising in internet marketing can give you a significant advantage over your competitors, since many do not use offline methods to advertise their products.

Offline advertising is particularly relevant if you are selling a product, or offering a service, that attract customers locally. For example, you could offer a fitness aid at your local leisure center. Many leisure or fitness centers will allow you to put a free poster offering your product, but even if they charge you for it the price is usually small. Perhaps you have a golf training aid that you can advertise at your local golf club.

Local classified ads are also a good means of getting your product some local publicity. The classified ads pages or even adverts placed on selected pages of your local press, frequently provide you with local orders. The beauty of these is that they are very easy to follow up, either with back-end products or new ones. You need not even restrict yourself to the local press. How often have you seen an internet marketing advert on the national press? They are not uncommon, and although expensive, they must produce a good return.

If you have a niche website, it could be worth your while browsing round your local newsagent and checking out the magazines on display. You know the kind - all these racks upon racks of magazines on every topic you can think of. Have a word with the newsvendor and find out some of the more popular magazines that cover your niche. These could be good publications for placing your adverts, especially if they are not too expensive and they have a good circulation.

Poster campaigns can also work well. You can advertise with posters in many shopping malls, and some stores also offer you the opportunity place an A5 poster for only pennies a week. Have your own business cards printed with your internet business contact details, such as website address and email address in addition to your phone number. Put your website address on everything, and have a signature that use on all correspondence. Not just emails and forum postings, but also offline correspondence such as letters, invoices, receipts and anything else you send to other people.

Another form of offline marketing that most people have never heard of, let alone use, is buzz advertising. This type of advertising has been growing in popularity recently, especially by offline businesses. It is used extensively by some auto companies and by cosmetics companies. Buzz advertising involves getting a verbal buzz going about your website or product. Some companies pay people specifically to verbally promote their products by approaching strangers, striking up conversations and bringing up the product in the conversation.

“Say, have you heard about the latest perfume from —-!” While not yet common it is getting more popular. Of course, the buzz need not be started off by someone you have employed to do it, but you can do it yourself. You can get your family and relatives involved as well. Before you know it, everybody might be talking about your product or your great new website. That’s how YouTube and MySpace got so popular.

If you have a van or pick-up get your business name and website address painted on the site. It’s easier to get a buzz going if people see your website in their face all the time, on vehicles, on posters, in newspapers and magazines, and even chalked on walls! Well, perhaps not the last one, but that would sure get people noticing your website! Do you get the idea? Get your website name known in every way that you can.

How about a local radio slot, with you explaining the virtues and benefits of your product, service or website? Stress the benefits, and you need not restrict it to local radio. Try for a national radio slot or even TV if your business is sizeable enough. There are no restrictions to the advertising methods you can use. Hire a loudspeaker and shout it from the rooftops!

Online advertising methods are very effective in internet marketing, since they can be visible to people all round the world, but if you know how to use offline advertising it can also work very nicely for you, and bring you a lot of business you would not otherwise have.