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Measuring Key performance Indicators May 02, 2006 |
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In the previous segment in this series of articles, we talked about identifying the most important Key Performance Indicators (KPIs) to track, based on the type of website you have. We also touched on the notion that different roles with an organization will only want to see the KPIs that are important to them. In this article I will illustrate how to accurately measure KPIs by using a fictional company called Jasra Corp., identifying the company's needs, and then accurately measuring specific KPIs to help to solve its needs. I'll start with a brief background of our fictional company. Jasra Corp. is an online publishing company in the health care industry. It has loads of content, written by hundreds of industry experts on topics such as medicine, patient care, pharmaceuticals, etc...Their website receives 120,000 page views a month and their revenue model is advertising based. Their monthly online revenue is approximately $50,000. Jasra Corp.'s stakeholders have little understanding of how their website is performing (in terms of the effectiveness of ad placement in driving leads to advertisers) and how they can show value to their advertisers (being able to bring business to them). Currently, Jasra Corp. does not have any web analytics implemented but are tracking page views and referrer data through log analysis. Needs Identification Our first step should always be to sit down with stakeholders and identify their needs. This is important because it will help us establish KPIs that matter to the client. I recommend that you narrow the list down to only 3 or 4 major metrics; otherwise tracking so many numbers becomes misleading, obscuring the few metrics that truly provide a clear picture of how the site is performing, based on the client's business model. Jasra Corp. has 2 major needs:
After speaking with Jasra Corp.'s stakeholders, we determine that our KPIs will be:
Tracking KPIs Anyone with an online business should have some form of analytics set up on their websites. Without analytics, it is very difficult to measure how effectively your website is at improving your business's bottom line. As mentioned in a previous article, "Analytics: you can't afford NOT to track", there is no need for business owners to make decisions blindly when they have the ability to make educated decisions using analytics. In the case of Jasra Corp., my first recommendation is that they purchase some Web Analytics software that has the capabilities of tracking conversions and visitors paths. Major players such as SiteCatalyst, Web Trends, and HitBox all offer good solutions. There are also free solutions available through Google Analytics, StatCounter, and ClickTracks. While implementing tracking, Jasra Corp. should make sure to set-up conversion triggers on the final page of the ad sign-up event; to accurately track ad sign-ups. It is also recommended that when implementing analytics code, they code the pages they're tracking using meaningful page names for each page. When they are reading their dashboard reports, these meaningful page names will make the reports more intuitive to understand. Strategically using KPIs After viewing our new Analytics reports we can begin to make some conclusions about current site performance, and confidently identify actionable items that will help us improve each KPI going forward. We can start by looking at the ad sign-up conversions reporting we've set-up. The reports will be able to tell us the exact number of sign-ups we had for any date range. If we dig a little deeper, we should be able to see the referring domains that helped drive the conversions, and if we drill even farther, we can begin to see where in the conversion process users abandoned the form. Some analytic tools allow users to create custom conversion funnel reports which immediately identify the rate of abandonment per conversion step. The other two metrics, Time Spent and Unique visitors will be important to Jasra Corp. because they will help the stakeholders understand how engaging the website content is. These 2 metrics are also useful because they can act as marketable numbers in order to help entice future advertisers. Advertisers are more likely to purchase ad space from a website if it continually receives new visitors who are engaged longer than 30 seconds with the website. Tracking ad impressions and clicks is the only way Jasra Corp. can show value to their advertisers, who will want to know if they are actually receiving any return on investment. Ad impressions and clicks can be tracked individually and can also be tacked to form a ratio of the number of times an ad was shown compared to the number of clicks. Jasra Corp can show their advertisers the click thru rates for their ads, which will help the advertisers determine how effective their campaigns are. Jasra Corp. (as well as all other companies) should take their KPIs and set up dashboards to help them stay on top of the stats, in order to analyze trends and identify follow-up actions. This can be done manually by exporting numbers from the analytics into Excel, or if your analytics package offers it, customized dashboards within the software's reporting framework. KPIs should be revisited and fine-tuned periodically because the needs of stakeholders and end users (in our example, advertisers) are ever-changing. In our next article, we will provide examples of key performance indicators based on the various site types: Content, E-commerce, Lead Generation, and Self Service/Support. |
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