Harness Your Site's Stats to Measure Your Success
One thing all
successful businesses have in common is that they test everything,
and assume nothing. But in order to test, you have to be able to
After all, if
you don't know your site's vital statistics -- also called metrics
-- you won't see the danger signs until it's too late. Plus, if
you're not measuring the numbers that matter most to your business,
you could be missing huge opportunities to improve.
The good news
is that, with e-businesses, tracking results is a snap. But there's
a lot of conflicting and confusing information out there about web
site statistics, so in this issue, I'm going to give you a primer on
keeping a finger on the pulse of your venture.
To really know
where your business is and track its health, you need three sets of
- Your sales figures,
- Your subscriber and customer statistics, and
- Usage details from your web site.
you already have your sales, customer, and subscriber info handy, so
that leaves us with web site usage details.
one of your web pages and the files associated with it (i.e.
graphics, audio, banner ads, buttons, etc.) from
the server that
hosts your web site, these details are recorded in a file called a
You should be
able to access these files from your web host, either through their
own reporting system or as raw data that you can then analyze using
your own software.
Here are just
a few of the things your web logs can tell you:
search engines bring your site the most visitors.
keywords visitors are using in the search engines to find your
linking partners and ads are bringing you the most traffic.
- How long
your visitors are staying on your site and on individual pages.
- Which pages
your visitors are most interested in.
visitors are entering -- and exiting -- your site.
But the truth
is, some of these numbers are meaningless on their own. After all,
there are plenty of dot-coms out there who get loads of traffic but
still don't see many sales!
your site stats with your existing sales and subscriber information
that makes these metrics powerful.
Critical Stats You Should Be Tracking
the most important statistics are called "conversion rates." These
are ways of measuring how successfully you are achieving the goals
of your site, such as converting curious browsers into buyers or
converting first-time buyers into repeat customers.
have several conversion rates to focus on as you guide your
customers through the sales cycle, but here are some key formulas:
1. How many
visitors are you converting into customers?
Visitor-to-Customer Conversion Rate is one of the easiest stats
to gather, but also one of the most powerful. It's a quick
indication of how effectively you're convincing visitors to buy from
# of visitors
x 100 = Visitor-to-Customer Conversion Rate
So if you get
10,000 visitors a month and 472 of them become customers, then your
conversion rate is 4.7%.
2. How many
visitors are signing up for your newsletter?
Known as the
Visitor-to-Subscriber Conversion Rate, this metric tells you
how attractive your subscription offer is. Keep an eye on this
figure as you test different positions and copy for your sign-up
# of visitors
Visitor-to-Subscriber Conversion Rate
If you get 10,000
new visitors to your site in a week and 2,730 of them subscribe to
your free newsletter, then your conversion rate is 27%.
3. How many
of your newsletter subscribers are becoming customers?
Subscriber-to-Customer Conversion Rate is a good test of how
effective a sales tool your newsletter is. This is especially
important if your main product is a paid newsletter.
# of subscribers
x 100 = Subscriber-to-Customer Conversion Rate
If 120 of your
2,730 subscribers end up buying something from you, then your
subscriber-to-customer conversion Rate is 4.4%.
4. How much
revenue are you making from each visitor?
this Revenue per Visitor stat shows how much you're earning
from your average visitor. This is particularly valuable since this
number helps determine how much you can spend to acquire a new
visitor while still earning a profit.
# of visitors
= Revenue per Visitor
If you sold
$6,000 worth of inventory this month and had 39,000 visitors to your
site, you would know your revenue per visitor is about $0.15.
5. How many
people are clicking where you want them to click?
Click-through Rate shows the percentage of people who "click
through" from your salesletter to your order form (or any other link
you want to measure).
clicks on link x
# of visitors to page with link x
x 100 =
For example, if
you get 10,000 visitors to your salesletter, and 650 click on the
link to your order form, then your salesletter has a click-through
rate of 6.5%.
Advanced Stats You Should Be Tracking
basic metrics I've covered above, there are some more advanced
measurements you should be aware of. This powerful information will
give you even more insight into your business and ways you can bring
it to the next level.
1. How are
your customers moving through your site?
For any site
that has more than a page or two, this is a crucial -- but often
ignored -- set of metrics, referred to as Clickstream. It
basically involves tracking how visitors move through your site,
including where they enter, where they exit, and what pages they
view along the way.
this category are stats like your homepage "bounce" rate: How many
visitors to your homepage leave (or "bounce") without going any
deeper into the site. If 75% of your visitors don't click a single
link off of your main entry page, you'll need to find out why, or
you're wasting valuable traffic.
clickstream will also show which pages people are leaving your site
from. For example, if more people leave the site from your order
form than any other page, you might need to assess how "user
friendly" this form is. This can be a crucial way of seeing how
effectively your navigation system is guiding your visitors toward
2. How much is it costing you to attract new visitors to your site?
per Visitor (CPV) stat tells you how much it costs, on average,
to get a visitor to your site. If you're using paid advertising,
this can be a particularly valuable figure. Just compare your cost
per visitor to your revenue per visitor, and you'll know whether or
not your advertising is profitable.
# of visitors
= Cost per
If you spent
$1,200 on a campaign and it brought 2,700 new visitors, then your
cost per visitor is $0.44.
3. How much
are you paying to gain each new customer?
per Customer (CPC) is a key number to track to make sure you
aren't paying more to attract each customer than you make in profit
from each sale.
# of customers
= Cost per Customer
If you spent
$1,200 on a campaign and it brought 327 new customers, then your
cost per customer is $3.67.
Unless you have a custom-built system, you won't be able to view all
of your stats in one place, so I recommend setting up a spreadsheet
in Microsoft Excel, where you can plug key sales numbers and stats
into one "dashboard" to track all of your key metrics over time.
Once you figure out all of the formulas, you can just type in your
new details each week to track your progress.
Tools to Analyze Your Site Traffic
There are a
few basic tools to help automate how you measure your site’s
server logs is a good first step in getting hold of some of the key
information you need to measure your success. Some web hosts already
have log analysis software, which makes things really easy. They
will import your server logs into their database, and automatically
turn all of the numbers into easy-to-read reports, graphs, and
If your web
host doesn't offer this service, you need to ask them for your
server logs, which you can download via FTP. In many cases, what you
are going to get is raw log data -- piles of numbers and symbols
that are almost impossible to interpret! But there are dozens of log
analyzing programs out there that will make sense of this
Here are a few
of the programs that I'm familiar with. Many are either free or have
free versions. This isn't an exhaustive list, so you may also want
to do some research of your own to match your site's unique needs.
logs are rich with information, they have their limits. They can
tell you how many visitors you get in a day, for instance, but not
how many are coming to your site for the very first time. That's
where ASP (application solution provider) tracking solutions are
Using an ASP
to measure your stats usually involves pasting a nugget of HTML code
When a visitor comes to your site for the first time, they may be
assigned a "cookie," which is a small text file that records their
The ASP then
tracks visitors through your site and provides a web site where you
can check your results. (Note: If you use an ASP solution,
Here are a few
ASPs that offer tracking services. ASPs generally charge based on
the number of page views. Some offer free versions, but require you
to display a banner or small button on each page, something you
should obviously try to avoid if you can.
If you are
using software like
AssocTRAC to track your affiliate sales, then you may also use
it to track the metrics behind banner ads, text links, buttons, or
any type of advertising you pay for, including PPC campaigns down to
This can be a
powerful way to track such vital metrics as Sales per Visitor
and your conversion rates on paid advertising much more accurately
than otherwise possible. You'll be able to track these statistics
for each link into your site by assigning each a distinct tracking
results is one of the most important things you can do to ensure
that you are always increasing your profits. After all, if you don't
know what the problem is, how on earth can you expect to fix it?
But make sure
the key metrics you're focusing on apply to your site's specific
needs, and continue tracking them as you test various solutions to
the problems you've identified. Of course, numbers won't always tell
you the whole story, so you may want to consider combining these
results with other sources, such as usability studies, customer
satisfaction surveys, and focus groups.
If you have a
custom-built ordering or database system on your site, it may well
produce data of its own, so make sure you can capture that as well.
If you've got technical resources available to you, a simple
customized solution might also capture the specific metrics that you
need to track.
businesses that do take the time to carefully track their results
are going to be the most successful, and it's for the simple reason
that they are able to fix problems as soon as they discover them. If
they find that their revenue per customer is lower than the cost of
acquiring those customers, they can search for less expensive ways
of attracting new customers while trying to boost the amount each
existing customer spends. If they're getting lots of visits to their
salesletter but not converting sales, they can make changes to the
copy right away.
This is why
marketing over the Internet is so exciting and so lucrative. It is
the only medium where you can measure your success in real time, and
then make changes based on what you've learned -- all within just
hours or days!