Understanding Web Performance Metrics

Countless articles and specialists assert that the primary strength of the Internet is its ability to obtain, in real time, a vast range of statistics about the behaviour of web site visitors. Yet to truly benefit from this advantage, a basic understanding of the main indicators is necessary, as is the ability to put these indicators into perspective by establishing relevant ratios. With this goal in mind, here are the ABC’s of web performance metrics: [1]

A) Setting Objectives

In our consulting practice, it is not rare to find that organizations fail to apply the same rules to their online ventures as they do to all their other investments. In fact, many managers are completely unaware of the returns (or costs) of their web sites. Yet, just as with any other investment, it is crucial to set clear objectives and to establish measures for evaluating the success of your web site.

What is your objective?

• To build notoriety? Then the number of visitors to your site and their acquisition costs must be calculated.
• To boost sales? Then the number of visitors to your site is secondary. You should focus on calculating your ratio of sales per visitor, the size of your customers’ shopping carts and the sales opportunities that your web site generates. [2]
• To improve customer service? Then useful indicators to watch are reductions in calls to your customer service centre and the average cost of this service.

By establishing concrete objectives and metrics, business managers can not only evaluate the efficiency of their Internet team (internal or external), they can also compare it to investments made in other publicity channels (e.g.: TV and newspaper) or distribution channels (e.g.: store branches and telephone).

B) Understanding the Main Indicators

It is important to know how to distinguish between the main indicators and to understand their limitations. With a basic web data analysis tool, it is possible to determine the number of unique visitors to your site, the number of pages consulted by visitors (pages seen), as well as the number of sessions each visitor carried out on your site.

The number of pages viewed per visit and the time spent per visit are good indicators of how well your online content captures visitors’ interest. In the same way, the number of sessions per visitor enables you to judge whether your site is successful at building visitors’ loyalty.

Other basic indicators that are easy to use and that will help you gain business intelligence include: the sites that refer visitors to your site, the keywords used to find your site in search engines, and your site’s most common exit pages.

As for limitations, you must keep in mind that these statistics are not 100% reliable. This is because not all your visitors are people; they can also be robots (sent by search engines or intelligence tools). And even if certain statistical tools take this possibility into account, the results can be skewed nonetheless. Moreover, it is possible for many different people to access your site from the same workstation, which could be falsely interpreted as a unique visitor who frequently visits your site.

C) Gaining Perspective with Ratios

The elements presented above are of little interest if they are not applied to previously established objectives. In order to know how efficient your site is for selling products or for inciting people to subscribe to a newsletter, you need to know your conversion rate , which is to say the number of times a given action is performed compared to the number of visits recorded.

Take this a step further and you will be able to identify your site’s problem zones. For instance, let’s look at the example of a site designed to build a database of visitors subscribed to a newsletter. It is of some interest to know your rate of newsletter subscriptions per number of visitors, but how can you improve this result? The solution is to establish a ratio for the number of times the subscription form is consulted per number of visitors, and another ratio for the number of subscriptions made per the number of times that the subscription form is consulted. This information will let you know whether your site should be optimized to bring more visitors to the form or whether the form should be simplified to generate more subscriptions. Many tools are available to analyze your web stats and to help you set various business objectives for your site. Such tools will also enable you to evaluate the conversion ratios of these objectives and of the behaviour of visitors who fulfilled these objectives.

If you operate a web site open to the public, you can also accurately judge your site’s level of traffic by calculating your coverage rate (reach). In other words, you can ascertain the number of Internet users you reached compared to the number of total Internet users who visit sites in your geographic region (e.g.: Quebec or Canada) or in your industry (e.g.: tourism).

As you can see, your web site is a vast source of information about your visitors, your customers and the efficiency of your promotional network. All you need to do is to get equipped to bring this information to light and then start making it work to your advantage.

[1] To find out more about the steps necessary to evaluate your online performance, see: Setting proper performance measures: a practice guaranteed to succeed! by Simon Lamarche, M.Sc. E-Commerce, Adviso Consulting.

[2] To find out more about metrics for merchants’ sites, see: Five metrics for online retailers by Jean-François Renaud, M.Sc. E-Commerce, Adviso Consulting.