Setting good performance measures, a practice that guarantees success!
With the maturity of the Internet, it is now possible to better use Web performance measurement tools to check whether a site, a feature, a campaign or any other online tool has met the business objectives that we had settled down. Putting a website online without planning and studying these measures is like buying an item without knowing its usefulness. There is no longer any valid reason for this image to persist in the context of e-business projects.
Do you calculate the conversion rate of your visitors (transition from visitor to buyer online or offline)? What is the average purchase price online and offline? How many people visit your site and then buy in store? These questions must be answered in order to ensure that your investments bring you profits.
A recent study conducted by Adviso Consulting and the RBC Financial Group Chair on the online department store sector in Canada showed that they generally do not use adequate performance measures to determine the success of their websites. In fact, businesses in the retail sector use their Internet site little to better understand their customer's purchasing process and thus establish their priorities with regard to the modifications to be made to their site.
A survey conducted by Forrester Research in April 2003 indicates that 14% of retailers don't know their conversion rate and 43% don't know their shopping cart abandonment rate. These performance metrics are however of paramount importance and allow significant improvements to a site. Upon noticing that many of their customers were abandoning their shopping carts, Amazon, the largest electronic retailer with 9% of online sales in the United States in 2002, decided to prevent its customers from returning to shop when they clicked " Proceed to checkout " . By making significant changes like this to the site, it becomes imperative to check how customers react to such a change and to validate that the action taken has eliminated the previously identified problem.
Companies that use the raw data provided by various online tracking tools and extract quality metrics from it, thus gain a significant competitive advantage since they know where the money invested is most profitable. Take the example of the online flower seller FTD.com. This company invested in a reminder system on dates determined by its customers because it realized that when emails were sent on the dates requested by them, its conversion rate for email campaigns went from an average of 3-5% to 28%. Knowing that a conversion rate of 3 to 5% is considered average, a rate of 2% is rather low and a rate of 10% is high, it certainly becomes profitable for FTD.com to invest in such a tool.
These examples prove the importance of using web performance measurement tools, but like many managers, you're probably wondering where to start. Several solutions are available to you. Here are some steps to follow in order to associate performance measures with your e-business tools.
1. Define the business objectives related to the intervention. 2. Obtain raw data associated with your site and your media placement corresponding to the objectives defined in point 1. 3. Define online ratios that properly represent your needs and business practices. 4. Calculate ratios, analyze them and define those that need to be improved as a priority. 5. Define the actions to be taken to improve the selected ratios. 6. Make the corrections that will have been decided upon in the previous step. 7. Assess whether the actions taken have been successful. 8. Repeat step 3 to confirm that the selected ratios still have priority.
By taking these few steps, you will be able to substantially improve your use of the Internet and your online investments will be much more thoughtful, profitable and in harmony with your business strategy.