Analyzing Your Website Statistics – Part II
What the data tells you
In the first part of this article, I discussed the basic tools that should be included
in any website traffic statistics package. Here I will continue by discussing those
tools that are not often found in basic services, but are critical to obtaining
a thorough knowledge of your e-business and where it is going.
High Power Tools:
ROI (Return On Investment) aka Sales Tracking:
Since in any business, we are most concerned with Sales and how to increase them,
this is the most powerful tool available. It is amazing how many website statistics
services and software do not even mention it, much less provide the information.
Somewhere around 75% of all websites do not track sales, although the number is
now beginning to decline.
It is simple to implement a simple tracking system on your own, but it is very important
that your website traffic analysis service provide you with certain key information.
Unfortunately, most services do not.
You need the following information to be provided by your Web Stats service:
Total Sales (Units and / or $)
Number of New Visitors
Number of Return Visitors
New Visitor Sales
Return Visitor Sales
Total Units Sold
Conversion Ratio
Drop-out Rate
In addition, you should be able to see a list of all sales by IP address, referring
pages, number of visits before purchasing, the amount of time on site and a number
of other items.
Total Sales
This is a unit count based on the number of times that your ‘Thank You’
page gets hit. This page is only accessed after a sale is made, so it is easy to
spot among your other statistics. But it becomes ultra valuable when combined with
visitor information.
Again, this should be compared to the prior period to evaluate progress. This number
is actually representative of your site’s overall success.
If your ‘stats service doesn’t provide this data, you could dig it out
of your other site stats on your own. But since you are paying for a website traffic
analysis service anyway, you might as well get it in the package. You have enough
to do already.
Number of New Visitors and
Number of Return Visitors
It is very important to be able to see the number of sales from Returning Visitors
against New Visitors. You may be surprised to see how many visits a person makes
before the ‘Buy’ decision is made. In fact, the bulk of your sales will
probably be from return visitors.
Be sure to carefully examine the pages they visited prior to making the purchase
for clues as to what caused the final ‘Click’ that made you money.
You should also be able to watch the referring page for each sale. This will be
used later to tell how well your ad campaigns and affiliate programs are working.
Conversion Ratio
For any number of visitors, you will make a sale. This ratio, Visitors to Sales
is known as the Conversion Ratio. This is the basis for all sales analysis. Combined
with your Ad Tracking module, it will tell you how effective all of your efforts
have been, and how efficiently your money is being spent The closer the ratio gets
to 1:1 the better you are doing. This number may also be presented as a simple decimal
number, such as .0175 or something like that. In this case it would mean that 1.75%
of website visitors bought your product.
You will see the conversion ratio used again in another context when we examine
Ad Tracking.
As in all our other analysis, we again want to monitor current sales against previous
sales and note the increase or decrease. Shifts in the conversion ratio are very
important, so if this number drops, it is time to locate the reason using your other
tools to head off trouble. Watching it increase will tell you that you are on the
right track.
Drop-out Rate
The Drop-out Rate is the ratio between the number of people starting the sales process
and the number of people actually finalizing the purchase. It is surprising how
many people will abandon the sale at this point.
Incredibly, something like 71% of websites do not even monitor this valuable statistic,
even though 66% of customers report abandoning the purchase before completion.
The primary reason for drop-outs is that the sales process is too complicated, or
something is required that the customer finds offensive. Navigation problems is
another reason.
Trend Analysis and
Percentage of Change
These two items don’t really stand alone, but should be part of many of the
other modules in your e-business arsenal. I mention them separately because they
will give you the clearest understanding of your current position. Unfortunately,
not many services provide these numbers.
The Trend Analysis is usually drawn as a line on a graph. An upward slant shows
that the item under evaluation is improving, while a downward slant implies the
opposite.
The Percentage of Change is the real meat of any analysis package. It not only tells
you where you came from and where you are going, but how fast. You will know instantly
that not only have sales grown, but by how much.
Ad Campaign Tracking
Ad Tracking is very similar to Sales Tracking, but with some differences. First,
the setup is usually done a bit differently. Your ad link is pointed to a special
tracking page, or a special code is added to the end of the URL string so that the
particular advertisement can be tracked. This is then simply combined with your
other analysis tools, including Sales, for the final result.
You should be able to see the following information from your website traffic analysis
provider:
Entry Page
Referring Ad
Number of Hits for both the Current and Prior Time Periods
Number of New Visitors
Number of Return Visitors
Conversion Ratio
These may or may not be combined with Sales information to show which of your ads
led to Sales rather than just visits. However, most Ad Campaigns are just meant
to drive the greatest number of qualified visitors to your site. If the visitors
have been targeted effectively, the sales figures will follow.
When some vendor guarantees you ’10,000 hits per day to your site’,
you can use these numbers to see if the expectation matches the reality. Here is
proof positive of your ability to draw in new visitors.
Using these numbers is very easy. See how many hits each of your ads generates.
Get rid of those that are not performing well and move your money on to other areas.
Entry Page
Referring Ad and
Number of Hits for both the Current and Prior Time Periods
The entry page can be any page on your site, but usually it is a sales page. The
referring ad is sent along as part of the URL. This is a unique number attached
to each advertisement. By reviewing each of these pages, you can identify which
ads are driving the most traffic to your site.
Watching the increase or decrease in the number of hits over time will tell you
when an ad is playing out. Comparing the numbers various ads and layouts will show
you the effectiveness of each.
Number of New Visitors and
Number of Return Visitors
It is important to be able to separate new and returning visitors in your ads. Most
hits will come from first-time visitors, but when return visitors come from your
ads you know that the ad is believable to the customer. In other words, it has credibility.
It also shows that potential customers are actually remembering and seeking out
your ad. Note the ratio between these two numbers.
Conversion Ratio
The conversion ratio is sort of the magic number of advertising. This measures how
many visitors to your site actually became customers. Ratios vary widely from industry
to industry, but what we are watching is the change over time.
As stated many times before, compare this number with the prior period and look
for changes. Your ‘stats service should provide you with a separate conversion
ratio for each ad.
Affiliate Tracking:
Better than search engines! Originally I frowned on this marketing method as being
nothing more than a pyramid scheme, but it is simply not true. These are nothing
more than commissioned sales people working for you.
Many companies report that they get more traffic and sales from their affiliates
than they do from search engines! There are even companies that derive all of their
business from nothing but affiliates.
One reason for their success is that visitors from an affiliate site are pre-qualified.
That is, they come specifically to see and purchase your products. It doesn’t
get much better than that.
Use the same techniques and services as in the Ad Campaign section above to evaluate
the success of each affiliate.
So there you have it. In two major sections we have looked at some very powerful
tools that can make or break your e-commerce business. If you are operating without
the benefit of these tools, you are trying to run a race with one foot in a bucket
and a bag over your head. It would be hard to imagine how you could do worse.
To recap a bit:
We have looked at:
The Basics:
Overall Traffic Summary
Visitor Statistics
Pages Visited
Search Engines
Keywords and Phrases
Browsers, cookies and other technical data
And the Gorilla Marketers’ tools:
The Power Tools:
ROI (Return On Investment)
Sales Tracking
Conversion ratios
Drop-Out Rate
Ad campaign tracking
Trend analysis
Affiliate Tracking
Trend Analysis
Percentage of Change
The first group of tools is the minimum you should have. They will cover the essentials
of monitoring your website, and if well presented, will not cost you heavily in
time. The second can actually save you time and money by providing data that you
would otherwise have to hire outside or add staff and overhead to accomplish in
house.
In either case, don’t leave home without them.
I hope that you have found this article informative and useful. If you have comments
and suggestions, I would love to hear from you. I can be contacted at will@webstatsgold.com
Regards,
WG Moore
Bio and Shameless Self-Promotion:
WG Moore is a long-time international businessman, programmer and website developer.
He has worked and provided services in such diverse places as Mexico, Canada, Germany,
Singapore, China and many others. He is the author of the Web Stats Gold Analysis
package and Managing Director of webstatsgold.com a statistics and analysis service
that provides most, if not all, of the tools and services discussed in this article.
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