So you want to buy a Saab. If you're looking to buy one in the UnitedStates, you might start your search at Saabusa.com. There, customerscan compare the latest models and find a dealer. Then they canactually go to the dealer showroom and buy a car. Or they could justmove to another site and forget about a shiny new Saab. In eithercase, the folks at Saabusa.com have no way of knowing whether they aremotivating online customers to visit a dealership.
So while the site's operators can track the number of hits and levelof traffic, they cannot analyze where or why a customer abandons thesite. "We need to move beyond hits and traffic and find out whatmotivates people to go to dealerships," says Richard Amling, thewebmaster for Saab Cars USA, based in Norcross, Ga. Amling notes thatSaab is in the process of shopping for a Web analytics softwarepackage so that it can analyze customer behavior.
During the dotcom heyday, companies slapped sites on the Web andwaited for traffic to pour in. They counted "eyeballs" and measuredtheir site's "stickiness" as a way to convey the online real estate'svalue to advertisers. When the Internet bubble burst, "stickyeyeballs" seemed suddenly worthless. Now, as the Web has moved frombeing a technology pipe to a sales channel, companies such as SaabCars USA need to update their Web measurement strategy with newmetrics and analysis tools that can help them analyze customerbehavior and improve their site's business success.
But while hits were once the metric du jour, the new metrics are notso clear-cut. "There is no standard metric that a company can rely onfor its website," says Randy Souza, an analyst at Cambridge,Mass.-based Forrester Research. "Metrics will be different fromcompany to company." Where a retail site might be focused onconversion rate (the number of online shoppers who actually buysomething), a business-to-business site might value site reliabilityand speed above all. In short, the most valuable metrics will dependon what you are trying to do with your site. Once that is determined,large enterprises should consider buying software to help analyze Webdata, while midsize and smaller companies should consider a hostedservice.
That's already happening and will likely increase in the next fewyears as companies come under increasing pressure to document theirwebsite's value. By 2006, Jupiter Research estimates, annual spendingon site analytics will reach $1 billion, by which time ASP-basedservices will account for 29 percent of spending. While IT leadersdon't always need to be directly involved, CIOs should be able tosuggest valuable metrics to marketing and operations departments.Measuring a website's success can also be crucial when CIOs are forcedto defend e-business spending. And IT leaders will need to partnerwith other business units on site redesigns that result from theanalysis of Web metrics.
"Web metrics should absolutely be the concern of the CIO even if it'shoused in another part of the organization," says Gary Massel, vicepresident and CIO at Boise Office Solutions in Itasca, Ill. "If you'reconcerned about your customer, then you have to be concerned aboutyour website's performance."
The following are descriptions of some of the most important metricsand analysis tools, depending on the type of website.
Business-to-Consumer/Retail Sites
Website metrics and analytics are especially important to companiesthat are selling goods on their website. First, retail sites should belooking at conversion rate and average order value in order to gaugesuccess levels. In addition, they should tie revenue-based metricswith customer behavior. For example, companies can use techniques suchas funnel-based analysis, in which they compare drop-off rates withlost revenue, says Matthew Berk, senior analyst at Jupiter Research inDarien, Conn. "Page views and visitors used to be key," says CharlesHachtman, CTO at Los Angeles-based Novica.com, a site that sellshandmade items from around the world. "Now it's back to basics. Everye-tailer has to have a Web analytics tool--otherwise they have noinformation about how their site is performing."
Here are a select group of metrics and tools that retail sites can useto help measure success.
Net dollar per visitor: When Novica.com first set up shop online in1999, Web managers wanted customers to stay on the site for as long aspossible. "Our mantra was: Build it and they will come," saysHachtman. "Now it's about finding the right customer and getting themto check out as quickly as possible."
Novica.com uses customer data gathered by Fireclick, an ASP that helpscompanies track online customer behavior using caching technology tocalculate the amount of money earned per visitor to its site. Theonline retailer uses that metric to compare its different advertisingcampaigns. Hachtman says he would be able to gather that data withoutusing an ASP or software package, but the amount of time and effort itwould take to go through the log files would be prohibitive.
Clickstream: More than a metric, clickstream analysis is a broadmethod for companies to analyze their customers' behavior. A widerange of Web analytics software packages and ASPs offer clickstreamanalysis, which can help a company analyze where customers enter itssite and where they exit.
For example, Web managers at Playboy.com in Chicago recently startedanalyzing clickstream in order to help grow the subscription side ofits business. The site relied on advertising revenue in the past butnow focuses on converting free visitors to paying members of its CyberClub in an effort to reach profitability. Using a service fromWebHancer, Playboy.com can examine where it converts customers andwhere it loses them. Webhancer's "e-business view" captures the enduser's activity rather than focusing on log server data from a smallapplication, loaded on the user's desktop, that tracks his movementson sites around the Web. Companies such as Playboy.com receive reportsand analyses that describe how traffic comes from other sites, whereconversions are failing and how the site compares with those ofcompetitors. "This has been a huge priority because our goal isprofitability before the end of the year," says Phil Jacus, seniormanager for e-commerce and marketing at Playboy.com. Jacus adds thathe expects an ROI from Webhancer by the end of the year.
Customer drop-off rates: According toJupiter Research, 71 percent of sites do not analyzecustomer drop-off rates, even though 66 percent of consumersreported having abandoned a purchase while on a website.Companies can use clickstream analysis to determine theirdrop-off rate. In order to improve it, they can conductusability testing to see where users have troublemaneuvering on the site. Although Saabusa.com, for example,is still looking for a Web analytics package, it has used ahosted package from Vividence, which sets up panels of usersand then analyzes the data from their actions. Where SaabCars USA would normally count an online sign-up for atest-drive a success, usability testing can determinewhether the process of signing up was pleasant or awful forthe user. And most customer drop-offs come when the processbecomes awful.
Content Sites
Websites that offer free content need to be concerned with basicmetrics such as page views and unique visitors (those who visit a sitemore than once during a specific period of time) in order to satisfyadvertisers. Otherwise, metrics aren't as straightforward as they canbe for sites that measure success in revenue from sales. However,these sites--which run the gamut from media sites to governmentinformation portals--need to gauge how customers are faring. "We spenda lot of time and effort making sure that our online readership ishighly satisfied," says Michael Smith, CTO of Forbes.com in New YorkCity.
Here are some ways they can do it.
Loyalty index: PennWell, a Tulsa, Okla., company that publishes morethan 40 business-to-business magazines, tracks the number of visitorsand unique visitors to its site, as well as page views--all of whichare important to its advertisers. The company also looks at the topdomains and vendors that are visiting the site in order to show thatit is attracting the right audience for advertisers.
PennWell is able to track clickstream behavior and determine who isvisiting through its use of WebSideStory, a San Diego-based ASP. MarkHeimberg, who oversees 23 of PennWell's websites as director oftechnical marketing, says he can track a "loyalty index" bydetermining how many times a visitor comes to the site each week,month and year.
Customer satisfaction: Clickstream analysis can gather importantinformation about how users navigate a website, but it can't explainhow a person feels while they are doing it. Enter the online customersurvey. FirstGov.gov, a government information portal managed by theGeneral Services Administration, gets reports on customer satisfactionfrom ForeSee Results, which quantifies customer satisfaction throughonline surveys using the American Customer Satisfaction Index. "Themost important metric to us is the measurement of whether a user has apositive experience on our site and whether they will recommendFirstGov to another user," says Michael S. Messinger, director ofmarketing and communications for the site.
B2B Sites
When a businessperson goes to a website to buy supplies, she isusually going there to make a purchase and leave, rather than browse.Therefore, business-to-business websites need to worry most abouttheir site's performance and how easily and efficiently customers canget on and buy what they need. After all, most businesses are usingB2B sites to cut costs from their supply chain. "In B2B, there is acontractual relationship, so users can't just go to another site,"says Boise Office Solutions' Massel. "Therefore, if they go into yoursite and have problems, it's terribly frustrating for them."
Site performance: While all websites worry about how fast and easytheir site is to use, businesses are perhaps the most demanding andimpatient users of all. "We get a lot of feedback when things aren'tgoing well on our site," says Chris D'Agostino, e-commerce developmentmanager for Boise Office Solutions. D'Agostino says that rawperformance numbers are the most important metric for his site, whichsells office supplies to businesses. Boise Office Solutions uses aservice from Keynote Systems to evaluate its site performance. Usingautomated agents around the country, Keynote runs transactions typicalto a site and collects data on such metrics as how long it takes toplace an order. Boise Office Solutions can then access the data viabrowser.
User efficiency: At Englewood, Colo.-based IHS Engineering, whichprovides engineering information and resources to Fortune 1000companies through subscription and custom data, a full-time Webanalyst scours the log server files for user patterns and trends. "Forexample, if we see that a set of users on the system are searching forsomething too often, that might cause us to go in and take a look atwhy they are having trouble," says Paul Magin, vice president ofproduct development for IHS Engineering. Magin calls that approach"user efficiency analysis." "If they are having to conduct threesearches to get one answer, we've done something wrong," hesays.
Average time spent on system: In the past, consumer websites kepttrack of how long users stayed on their site, hoping to increasestickiness. Now, most Web managers--especially those working on B2Bsites--want to help users get on and off their sites as quickly andpainlessly as possible. "Our goal is to reduce time spent on our site,and that sounds counterintuitive," says IHS's Magin. "If our users aresatisfied, we should see more sessions and less time persession."
Like Saab Cars USA, many companies are just now deciding to getserious about Web metrics, even though the technology is not brandnew. "Until the recession really hit, there wasn't much urgency aroundWeb metrics," says Forrester Research's Souza. Now, the focus is ongetting business results, and quickly. "Ultimately, we need ananalytics tool that can work for our websites around the globe," saysAmling, of Saab Cars USA. "And we need to get moving quickly."