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The Importance of Web Analytics and Using Your Analytics Properly

November 11th 2005

The Importance of Web Analytics and Using Your Analytics Properly

Website Analytics

Analytics are very important to your web marketing campaign.  If you do not use analytics properly you may not understand how effective your search engine marketing is.
 
In this article I look at some practical examples of when to use analytics and some things you need to identify in order to get the most out of your analytics.
 
I came across a situation today that I thought Iíd share.  It has to do with a clientís analytics.
 
Many times, as a search engine marketer, it is up to us to tell the client what they should be looking for in their analytics.  Right away this seems odd to me.  Itís like me telling my client what their business model is, or how they should be selling their product online.
 
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But this does seem to be a common thread among some site owners.  They had an idea for a product or service and they wanted to promote it online. So they had a website built, and may have initially had it optimized.  But that is as far as their experience goes.
 
They have no idea on how to track progress or improvements.  All to often the numbers they do look at are not the best results to view.
 
There are two perspectives on analytics ≠ SEO and client.
 
With my client today, we were trying to nail down what should have been important numbers.  And it was a very similar case ≠ they had invested in this super-duper analytics package that was collecting and displaying data upteen different ways, yet they had no idea how to interpret the numbers.
 
They thought their traffic was increasing, but they had on idea why, really, nor did they have any idea what their customers were doing once they hit the website. And, as sometimes happens, we fell into the trap of telling them what they should be looking for.
 
ďYou want to see search engine referrals going up. That means itís workingĒ or ďincreased page views is a good thing.Ē But this really isnít solving their problem is it?   Sometimes as search marketers, we need to step back and say ďI know what I need for numbers, but what does my client need to see.Ē
 
So this was the approach we took today ≠ letís have a discussion with the client and focus on what they want to see, not what we need to show them to prove our value as search engine marketers.
 
When we were done, we had not only shortened their monthly analytics report to a few key metrics (down from pages and pages of statistical analysis) but we had also decreased the time required to complete this analysis. Sure we still will do some of the analysis for our own purposes, but does the client really care how many backlinks or pages indexed they have?  Not likely.  Nope, more often than not, the client wants to know that they are making money.  Pure and simple.
 

So, if you can show them that they are making money, thatís all they really care about.  You can add value as a search engine marketer by showing areas of improvement (ďdid you know that your Google referrals went up by 15% this month?  That proves the value of our services, yada yada yada...Ē) As long as you can illustrate the bottom line to the client in terms they understand, at that it is improving, then you as a search marketer have done your job.

 
Keep the pages indexed, backlinks, referrals by keyword and other non-client related data to yourself and present a concise simple report that even the CEO (who has 25 hours per day of work) can look at and understand that the SEO program is paying for itself.
 

Now letís look at analytics from the clientís perspective. If you are a client of an SEO firm, or just want to get a better idea of just how your site is doing online, first you must decide what it is you want to see.  Do you want to see sales figures? Or would you rather just look at the aggregate numbers like total visitors and search engine referrals?

 
What has more value to you ≠ reams and reams of data, or a simple, one page summary of overall performance? As a recommendation, Iíd say you only need enough data to make your business decisions.
 
In other words, if your website is e-commerce based, all you really need initially are the sales numbers over time.  You should also understand how the sales cycle works, and perhaps look at your conversion funnel to see where people are dropping off.  Most good analytics packages offer some sort of funnel analysis.
 
Understanding your sales funnel can also help you improve your sales.  Sometimes an analysis of the sales funnel can help you determine where the drop offs occur.  By modifying the funnel you can improve your drop off rate, increasing your sales.  And really, this has less to do with SEO and more to do with traditional business marketing.
 
For example, letís say your site gets 2000 visitors per month.  Letís also assume your site has a 3 step sales process, and your average sale is $11 per item.
 
If half of your siteís visitors start down the sales path, that means 1000 start (a 50% drop off rate at the first step ≠ this could be due by a requirement to sign up to browse your site).  If 40% of that total drop off at the second step, and 30% of that group complete the sale, that equates to $495 in sales, about a 2.25% conversion rate as only 45 of the original 2000 people purchased.
 
Now letís experiment with the sales funnel:
 
If you can improve the final step of the sale by just 10% - that equates to an additional $165 in sales, a 3% conversion rate. However if you can improve the first step of the conversion, reducing that 50% bounce rate to 25%, you can increase your sales by $247.50 ≠ a 3.38% conversion rate.
 
Further, if you shorten the conversion funnel by 1 step ≠ making a 2 step sale, rather than a 3 step sale, you can increase your sales by over $330 ≠ a 3.75% conversion rate.  Thatís still assuming the same number of monthly visitors start down the conversion path.
 
However, if you donít or canít find this data in your analytics package you wouldnít be able to perform such analysis. And this is where, if you are dealing with an SEO firm, you must get the data you need.  Simply knowing how many referrals you got from Google or Yahoo! wonít help you make the business decisions you need to make.
 
So whether you are an SEO firm or professional, or employ one, be sure that the metrics you see are the ones you need to make your decisions.
 
As a client, donít be afraid to ask ≠ what does this do for me?  Because unless youíve discussed your needs with your SEO, they will likely provide you with the numbers they deem as the best.  That is, the ones that illustrate their value to you. Thatís not to say that those numbers are invalid, its just that they donít do you as much good as those you need to make your business decisions.
 
Similarly, as an SEO, if you donít know what your client needs to see, in terms of numbers, how can you justify your income from them. If search engine referrals have gone up, but conversion havenít then there is no immediate value to the client.
 
Sure you can say ďbut we got you all these top rankingsĒ but unless they are turning into sales, your contract with that client wonít last that long.  So be sure as you work with your SEO firm or client that you nail those metrics early, so there is no misunderstanding, and everyone knows what successes are measured by.
 

By Rob Sullivan
Rob Sullivan - SEO Specialist and Internet Marketing Consultant. Any reproduction of this article needs to have an html link pointing to http://www.textlinkbrokers.com

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