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Traffic, Visitor, and Customer Analysis – Getting Started

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I keep getting more and more requests for information on how to use visitor analysis to improve web site profitability.

And that makes sense, because people are beginning to discover you can dramatically improve profitability, double and triple it, just by understanding which traffic is most likely to convert, what it is people do (and don’t do) on your web site, and how to measure the effectiveness of changes you make on the site to improve visitor conversion to action.

Visitor analysis is very important, but it seems like few people are using it in an actionable way. By actionable, I mean something other than just cranking out reports on page views and server geek reports for the sake of it. When you generate reports, they should tell you something that leads to taking an action (or reversing an action taken). So I’m going to show you some of the data I use and the metrics I create from the data, along with explanations of how to use this information to get more visitors to do what you want them to do. But first, let’s talk about web site data and analysis in general.

Be Trendy

People seem to complain a lot about the quality of web data, and some hard-core stats people have various problems with the way both log-based and tag-based analyzers measure activity. I say, get over it. What matters most in tracking interactive behavior is trends, and even if the data is not 100% accurate in some way, as long as you continue to use data collected in the same way each time, you can still build trend charts. People obsess way too much about finding an absoluteanswer (hard exact numbers), wasting a lot of time and resources, when a relative answer (is it getting better or worse) can be just as insightful, if not more. Trend charts are a great way to look at relative performance stats, and that’s what I use. So do the best you can to get clean data to work with, but don’t waste a lot of time and effort looking for needles in the data haystack.

Think Action

If you want the results of your analysis to be actionable, it’s a good idea to create key metrics around your objectives. If the objective of the site is product sales, counting page views is not very meaningful; your page views could go up or down and sales remain flat. When you create a key metric, you want it to be actionable, directly related to the objective of the site. What would be meaningful for a site selling products? How about sales per visit? If you are tracking sales per visit, you have a metric related directly to the objective of the site. Sales per visit is a productivity metric, it tells you how good you are at converting traffic into sales. If you can improve sales per visit, you make more money. The metric is directly related to the objective of the site.

Key metrics are usually a ratio of something measuring an “action” to visits or visitors. What percent of visits signed up for the newsletter? What percent of visits lasted for more than 20 minutes? What percent of visits viewed more than 10 pages? These are examples of key metrics that might be aligned with the objectives of your site. Think about what your objective is – what action you want people to take at the site – and then think about how you might measure the success of this action.

Know Your Data

Traffic analyzers doesn’t really create many metrics by themselves, they generate raw data you can use to build metrics. It is worth the time to really understand how this data is generated, so when you create your metrics, you understand exactly what you’re looking at and can draw accurate conclusions.

For example, if you want to study sales per visit, do you want to include visits from spiders and robots, which (at least for now) don’t have a clue on how to make a purchase from you? If you include these visits, you artificially decrease your sales per visit. So make sure you know what you are measuring. In the case of visits, you may want to filter out robots and spiders, link checkers, uptime pingers, and your own development activity if you want a “clean” visit number.

Also, when you create a metric, make sure you are using data from the same time period for each part of the metric. If your metric is “Percent of Visitors Bookmarking the Site”, make sure the “Number of BookMarks” and “Number of Visits” you use are calculated over the same time period each time – a day, a week, a month. Otherwise comparing them and looking for trends won’t work.

Get Continuous

How do you use metrics? Measure, manage, maximize. First you measure and track to see where you are. Then you try to manage the metric by making changes to the site – when you make changes, did the metric get better or worse? Then using what you learn, you try to maximize the metric by making further changes. It’s a cycle of continuous improvement, of ongoing testing. Every time you learn something new about your visitors, think to yourself: what could I change to take advantage of this knowledge?

I have a client who started out with sales per visit at about 70 cents, which is pretty high to start with. She now does about $3.50 in sales per visit. How did that happen? First we measured total sales per visit, and tracked it over time. Then we started testing changes to the navigation, one change at a time. Make a change, track the result. Did sales per visit go up or down? During this managing process, we learned what kinds of changes made the biggest difference in sales per visit, and began building a picture of what visitors wanted and what caused them to buy. We made it up to about $1.50 in sales per visit this way – more than a double, but we couldn’t get it to go any higher working on the “whole site”, in this case, with the persistent navigation.

So then we starting the maximize process – instead of looking at the whole site, we began breaking down traffic into different segments. Sales per visit by search engine, for example – some search engines produced much higher sales per visit than others. Some pay-per-click ads produced higher sales per visit than others – for the exact same search term! Some products on the home page produced higher sales per visit than others. And so on. At the end of this process, which still goes on today, she was doing $3.50 sales per visit.

Measure, Manage, Maximize.

In the next two articles, I’ll provide two examples of metrics you can use to get more visitors to do what you want them to do. If you can’t wait, you can get a free visitor metrics tool that takes numbers from your traffic analysis reports and creates important visitor metrics for you. To go to the download page for this free metrics calculator click here.

Jim Novo has nearly 20 years of experience using customer data to increase profits. He is co-author of The Guide to Web Analytics and author of Drilling Down:Turning Customer Data into Profits with a Spreadsheet. If you want more visitors to take action on your web site, try using the free conversion metrics calculator, downloadable here. If you need to sell more to customers while reducing marketing expenses, get the first nine chapters of the Drilling Down book free at http://www.drillingdownbook.com.

Ask Jim a Traffic Analysis Question!

Traffic, Visitor, and Customer Analysis – Getting Started
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