"Not everything that can be counted counts and not everything that counts can be counted." - Albert Einstein
You've worked hard to let people in your organization know that there is
this great tool called web analytics that can give them great intelligence
about the workings of the website, great leaps forward in optimizing
campaign ROI and great insight into the hearts and minds of the marketplace.
They appear interested, but only a handful reach out to ask for data. And
what do they want? Hits reports. You become the person that cranks out
reports instead of the person who provides valuable insights.
The less we know, the more time we spend interpreting what meager details we can extract from the systems we run. We started out with precious little log file data about what the Web server was doing and hoped that more data would be more revealing. But now, web analytics tools crank out more reports that can be imagined.
There is a wonderful story in a book called "Keeping Score: Using the Right Metrics to Drive World-Class Performance" by Mark Graham Brown about the new head of an overburdened financial reporting department who stopped the delivery of all reports for a week. This resulted in a very few phone calls from a small number of managers asking for a modest handful of reports.
In my role as a web metrics consultant, I spend a great deal of time explaining what *can* be measured, so that the advertising and marketing department, the customer service managers, and yes, even the Board can decide what *should* be measured. It all boils down to what they consider "success."
If you're running an ecommerce site, the goal is sales. Everything that contributes to more and better transactions should be measured. If you own an advertising-supported content site, the goal is more pages viewed by more of the sort of people your advertisers want to reach.
The Red Cross site may have many goals:
The fundamental metrics that help in all of the above are the ones you already know and love:
These are the kind of reports that end up in multi-colored charts and graphs stuck to cubical walls and summarily ignored. Management over-reporting is a very common ailment.
So it's time to look ask how the advertising and marketing department, the customer service managers, and yes, even the Board determine whether they are successful? Start with a specific goal, any goal, and work backward.
The manager responsible for monetary donations will set an average monthly contribution amount as the baseline. She will alter her direct mail, print and broadcast campaigns and look for an increase in the number of site visits. She will change the landing pages on the site to see if she can positively impact the number of people who click through to the donations page. She will alter the copy on the donations page to see if she can increase the number and size of gifts.
The Board is only interested in the number of visitors to your site if it results in _______. You'll have to ask them to fill in the blank. Without specific goals, those innumerable reports are only interesting if they include anomalies and exception alerts.
If asked for a hits report, wear your curiosity hat and ask why they want to know. How will these numbers help them do their job? What business problem are they trying to solve? How can you help them achieve their goals? Suddenly, you are a strategic business consultant and no longer a report monkey.
Jim Sterne is an international consultant who focuses on measuring the value of the Web as a medium for creating and strengthening customer relationships. Sterne has written eight books on using the Internet for marketing, is the Founding President and current Chairman of the Web Analytics Association www.WebAnalyticsAssociation.org and produces the eMetrics Marketing Optimization Summit www.emetrics.org
]]>I was dead wrong about web analytics. I wondered why companies had not invested heavily and speedily in education, training and web analytics tools. Measuring the success of your website is a fundamentally obvious opportunity to blow away the competition. Why would any company not want to set upon a course of continuous improvement? Why would any company turn down the opportunity to get a higher return on their Internet investment? Who would not want to optimize their online marketing and thereby boosting their return on investment?
By Jim Sterne
]]> The drawback, it turns out, is the word "opportunity." Organizations are overwhelmed by opportunity. Companies are too busy putting out fires to spend the time and money on yet-another-opportunity. Especially an opportunity that is so sophisticated that it requires technical, statistical and business people all working together to make the most of it.While web analytics does indeed represent a significant opportunity - and we are only just now learning to plumb its depths - it can and should be used immediately as a fire extinguisher.
Your website is burning money.
Do you know the monthly cost of hosting, maintaining, building, monitoring, managing, etc. your site? How much was spent in total in 2007 on all your online efforts? That includes search marketing, banners advertising, email as well as print and direct mail pieces that drove people to your website (i.e., all of them).
If you are not measuring the success of your online marketing, you are burning that money. A web analytics tool can help you get that fire under control and eventually shift from burning every dollar spent into investing every one.
So make your goal for 2008 the effective us of web metrics. Set your sights on following the return on the investment of every ad campaign and new content development. At a minimum, actively capture and monitor the following:
Start with a baseline of your daily website traffic. Then subtract out the predictable growth in order to gauge the impact of special promotional expenditures.
Actions or events are the replacement for pageviews. Chances are excellent that your website make use of enough technology that simple pageviews no longer represent visitor activity. Actions will give you a clue about whether and how much content your visitors are consuming. Paying for visits is fine, unless they result in a visit with no actions.
After the visitors show up and click around your site, what was the business result? Did they view a certain number of articles? Did they register for a seminar? Did they download a whitepaper? Did they join a discussion? Buy something? This requires that you actually have business goals for your website. Not everybody does. Strictly monitoring your business outcomes reveals the most important piece of the ROI puzzle.
Does a visitor to your website feel better about your organization after their online experience? How would you know? Well, here we need to step out of strict web analytics and move over to customer surveys. It's critical that you open your ears to the voice of your online customer to determine the nature of the additional visits and clicks you generated. Were visitors pleased with your new site additions or did they spend more time and click more often because they were frustrated? If you don't ask, you can't tell.
Until then, that slight smell of smoke around the server room has little to do with broken air conditioner and everything to do with your online investment blazing away behind the door.
It's time to grab the fire extinguisher.
Jim Sterne is an international consultant who focuses on measuring the value of the Web as a medium for creating and strengthening customer relationships. Sterne has written eight books on using the Internet for marketing, is the Founding President and current Chairman of the Web Analytics Association www.WebAnalyticsAssociation.org and produces the eMetrics Marketing Optimization Summit www.emetrics.org
]]>Besides being fun to say and a legitimate excuse to wear my "Mind The Gap" hat purchased the last time I was caught in the rain in Covent Garden, the Feedback Loop Gap is the most pernicious problem faced by those in large companies tasked with running large, sophisticated Web sites.
By Jim Sterne
]]> I don't for a minute discount the trials and tribulations of those plagued by shrinking budgets, incredulous senior executives, or IT departments facing mergers and acquisitions. I am not turning a blind eye to the pending economic downturn. I am simply responding to what I hear from clients, audiences, blogs and online discussions.Your Web server generates a great deal of information. It creates logs. Mountains of data are collected in your server logs every day. The assumption is that this information is generated to help you determine how well you're doing. Nice thought, but not the case.
Log files are merely the result of good, solid engineering. If you create a system that does something, it's a good idea to record what happened. That way you've got a history file to look at when things go bump in the site. Log files are, therefore, the results of a server doing its job, and not a formal effort to capture valuable business intelligence.
The business management side of large companies went to the Web-heads and asked for reports. The log files were available and were delivered. Ever since, mankind has been trying to interpret log files like astrologers, phrenologists, and readers of the I-Ching. Log files do, indeed, contain more data than, say, the configuration of the bumps on your head, but it's a matter of torturing usable information out of them.
Here then, is the data torture process practiced by multitudinous multinational corporations:
1. Capture Log & Page Tag Data
Everybody's happy to lasso the data that Web servers spit out on a daily basis. It's just a matter of file storage - rather mundane, actually. And it gives everybody hope.
2. Cleanse the Data
Some data are useful, some are not. Some are informative, some are confusing. It usually requires a couple of rounds of attempted comprehension before the dirty data (robots and spiders, internal traffic, etc.) are revealed and can be expunged.
3. Report
Nice, crisp, colorful charts and graphs adorn the walls of technical and marketing offices. "Look! We have an active, interactive Web site and people are doing things there!" These charts are pretty to look at. They are proof that people are paying attention. They are useless.
4. Analyze
At some point, one of the technical committees squints at a series of reports over a several months period and begins to wonder why some numbers are going up, some are going down, while others do not change in the slightest. They wonder what external forces are at work. They scratch their heads and come up with seventeen technical explanations for the change over time of the appearance of the pie charts, bar charts and diagrams.
5. Deliver
Convinced that they have discovered something important, the technical team calls a meeting with their business compatriots and presents the findings. They expound on the statistics and the resulting graphical depictions in terms of how many people showed up when, how often, for how long, and to what end. The marketing staff are thrilled to receive actual data - hard evidence that the work they've been doing has had an effect.
The End.
Notice something missing?
Several things in fact?
Here's what I have found only in the rarest organizations:
6. Interpret
Technical people and business people gather enough knowledge to actually understand what the charts, graphs and diagrams really mean.
7. Plan
Based upon a thorough understanding of the reported results, a team made up of information system, designers and business people map out the changes necessary to improve usability, increase customer satisfaction, and boost revenue. Armed with an understanding of site visitors' desires and frustrations, new designs, new content, and new applications are devised and developed.
8. Execute
The best options which will result in the greatest impact at the lowest investment in time or money are selected. Upper management support is secured. A timeline is created. Stakeholders buy in. The project moves forward.
9. Repeat
Capture, measure, and analyze the results of the changes and incorporate those results in the next planning cycle. Ad infinitum.
The problem facing most large companies today falls between items 5 and 6: the dreaded Feedback Loop Gap. We have the data, we have the pretty reports, but we do not have an educated team made up of technical and business people who can take the resulting statistics and turn them into meaningful plans. Feeding Web server statistics, customer satisfaction surveys, sales data, etc. back into the process of creating Web strategy and executing on Web tactics has gone missing.
We need to sufficiently educate those controlling the marketing and customer service budgets so that they can interpret the data they get. At best, they will understand the metrics reports well enough to make well-informed plans for the next step *and* instrument the execution of those plans so that the right information is gathered with each iteration: the Feedback Loop. When this process begins running like the well-oiled machine it can be, the result is continuous improvements.
We can only hope. In the meantime; Mind the Gap.
Jim Sterne is an international consultant who focuses on measuring the value of the Web as a medium for creating and strengthening customer relationships. Sterne has written eight books on using the Internet for marketing, is the Founding President and current Chairman of the Web Analytics Association www.WebAnalyticsAssociation.org and produces the eMetrics Marketing Optimization Summit www.emetrics.org
]]>My job is to help companies understand and strategize around the use of web metrics to optimize their marketing. It starts out with measuring the success of a website, moves on to improving specific online customer processes and finishes with analyzing web behavior data to transform the business as a whole.
After explaining the massive multitude of measurements one *could* tabulate, it's time to decide what the organization, department, group or project *should* measure. With so many measurement options, the question is seldom about standards or technologies, but always about goals. What are you trying to accomplish?
By Jim Sterne
]]> You can answer that question as a corporation: raise revenue, lower costs, increase shareholder value, etc. You can also answer that question as a profit center: increase profit, grow market share, increase customer satisfaction, etc. But the answers to these questions are so often so nebulous that I am no longer surprised by the need to ask at the individual level - How are *you* compensated?The manager who will only make his or her quarterly bonus if customer satisfaction goes up X% doesn't seem to mind going a bit over budget. The one whose income depends on cost cutting has a more conservative perspective. But compensatory motivators are seldom considered when discussing measurement and review processes.
Having spent ten years carrying the bag as a salesrep, thoughts of compensation are hardwired into my head. I am forever trying to accomplish one of two things:
1. Alter Compensation to Match Organizational Goals
2. Align Metrics With Compensation
It's tough to get people to talk about how they earn their paycheck. They were given a speech about their productivity and contribution when they took the job, but discussions about recompense are far and few between and are considered an inappropriate topic for public conversation. I don't want to know how much you make - that's none of my business. But unless you know and are willing to discuss the basis for your income, you can't implement metrics to help you measure your success.
So begin with your organizational goals. Yes, we want to raise revenue, lower costs, increase satisfaction and beat the pants off the competition in terms of the number of patents filed and cool tee-shirts handed out at trade shows. But which of these takes precedent?
A manager's paycheck should be tied directly to specific changes in specific metrics over specific time periods and within specific budgets. It's important that the recipient not control the measurement methods (so he can't game the system) but has a contract that stipulates the rules of engagement will not change. That way everybody can track the numbers with confidence.
So clarify your goals and the proper metrics will become apparent, as will the systems to capture the data necessary to track those metrics.
If my goal is to increase online sales, then only measuring sales will not give me any visibility into the selling process. I'll want to track clickthroughs, and pageviews as well as revenues. I can drill down deeper and measure clickstreams - the various paths people take as they meander around my website - in order to improve usability and speed the sales process. I can measure the effects of altering the words I use to describe my offerings. I can track the types of questions the call center fields and try to answer those questions in an FAQ before people have to ask.
With state-of-the-art web analytics tools, I can measure every keystroke and the X-Y coordinates of each and every mouse movement in order to assess customer behavior within every page on my site. This is where the return on investment question gets some airtime.
If I collect too much data, if I produce too many reports, if I have too much information to consider, the cost of collecting, storing, analyzing, and reporting that information is more expensive than the benefits I can derive from its use as a decision making tool.
So measure, but not too much. Analyze, but don't go over the top. If you align your organizational goals with your personal metrics and those of the people who report to you, you give everybody the power to track their own success and do their best to meet their (and your) goals. Just don't let them get bogged down in the details. Make sure your metrics are useful, rather than merely interesting
Jim Sterne is an international consultant who focuses on measuring the value of the Web as a medium for creating and strengthening customer relationships. Sterne has written eight books on using the Internet for marketing, is the Founding President and current Chairman of the Web Analytics Association www.WebAnalyticsAssociation.org and produces the eMetrics Marketing Optimization Summit www.emetrics.org
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