How well is your website performing?

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How well is your website performing?

How can you tell whether your website is a success? With measurement and metrics! Here's how to work the figures to your advantage…

Every website aims to achieve one or more goals. Some examples of website goals might be:

• Increase sales
• Save time
• Save money
• Generate leads

What are the goals for your website? Is your website working hard to achieve those goals? Is there anything you could be doing to improve your chances of reaching those goals?

There’s a big chance the honest answer to those questions will be, “We don’t know”.

The answer, my friend, is metrics

So how do you find out if your website is successful? The answer is in carefully measuring and analysing website visitors and their behaviour, using a set of ‘key metrics’ (a ‘metric’ is just a particular standard of measurement, applied consistently over time).

The good news is that measuring and analysing doesn’t have to be difficult!

• First, we’ll look at very basic website metrics that, although interesting give us next to zero information of real quality.
• Secondly, we’ll look at far more useful metrics that give us the important feedback we need.
• Finally, we’ll find out how to get this information.

Basic website metrics = fairly useless information

Traditionally, website statistics packages report a very basic set of metrics. For example:

• Hits – how many times each page is downloaded. This bears little relation to actual numbers of visitors.
• Visitors – the number of visitors to a site. However, this could feasibly be the same visitor returning again and again.
• Unique visitors – ah, getting closer! This counts only each visitor once, regardless of whether they’ve returned. But are these qualified visitors, willing to buy? Are they spending any amount of time at the site?
• Page views – the number of times an individual page has been viewed. Fairly useful, but only really as a direct comparison to other pages in the site, with little value for measuring overall website performance.
• Referrers – which websites are visitors coming from to land at yours? Great for finding out who is sending you traffic, but not useful on it’s own as a website metric.

Taken at face value, these metrics do have something to offer, but don’t really tell us if our website is performing well, or helpfully inform us to how we might improve the situation.

Example scenario: your site might have had 5200 unique visitors last month (hurray!) but only 8 of them bought something and it cost you £220 in advertising to get them there in the first place.

Is that good? Hmmm… The basic metrics mentioned above wouldn’t be able to tell you.

Furthermore, they’d give you no clue as to what the problems might be, or concrete advice on what to do about it.

The power of performance metrics

Thankfully, there are far more valuable metrics we can use to measure success. Here are 4 of them:

• Conversion Rate
• Cost per Sale
• Abandonment Rate
• Return on Investment (ROI)

Let’s take each one in turn…

Conversion Rate

Conversion rate is the percentage of visitors that turn into a sale, or a lead (or whatever your desired outcome might be).

The accepted industry average for a site selling goods is 2% – if you have 1000 unique visitors a month and you make 20 sales, you’re about on target.

The accepted industry average for a site promoting a service is 1% – if you have 1000 unique visitors a month and you make 10 sales, you’re doing fine.

Good website analytics software (more on this later) will not only tell you your conversion rate, but will give accurate data as to which parts of your site are working well towards conversion, and which parts are letting the side down, allowing you to make changes where they’re most needed.

After all, a 1% conversion rate means an awful lot of people are not buying, or not contacting you!

In the above ‘selling goods’ example:

• If each sale was worth, on average, £100 each, you’d be making £2,000 a month, or £24,000 per year.
• An increase of just 1% would increase that yearly figure to £36,000.
• Pop that up to 5% and that’s £60,000 per year – a whopping £36,000 extra!

It’s easy to see the benefits of knowing a bit more about your conversion rate, and how to increase it!

Here’s a handy Conversion Rate calculator which you may find useful.

Cost per Sale

Another important website success metric is Cost Per Sale. In other words: how much is it costing you to achieve your business goals? How much does it cost to get a sale (or lead? or prospect?) Which advertising strategies are more cost-effective than others in making that sale?

Cost per Sale can be defined by a simple formula:

Of course, please substitute ‘sale’ for ‘postive lead’, or ‘definite prospect’ – whatever best describes your own website’s goals.

Also, be careful to make the distinction between the cost of making an initial sale (which can be quite high) and the lifetime value of a customer over a period of time (which can be quite cheap if you can retain him/her). Again, good visitor tracking software will be able to tell you this.

For example: about a year ago we began running both an organic search engine campaign and a PPC (Pay Per Click) campaign for a client, in order to increase sales.

• Initially, the CPS (Cost per Sale) for sales resulting from organic search was £1.50;
• For PPC it was £80.

Already easy to see which is the more successful strategy…

After a 6 month campaign, sales were up 500% – great! But more importantly:

• CPS for organic search sales was down to just 55p.
• CPS for PPC sales was now £20.

Obviously, both results were a great improvement. However, knowing how much it cost to get each sale, from different sources, makes it easy to see where your efforts and money will be best spent in future.

This particular client now confidently spends most of his ongoing ‘search engine marketing’ spend on organic search results, as that has the lowest cost per sale, as well as the highest conversion rate too.

Abandonment Rate

Abandonment Rate is another measure of how successful (or not!) your website is in converting visitors. Unlike conversion rate, however, it measures the rate that people abandon your site, either from a particular page in the website flow (e.g. a product detail page; the home page, etc.) or just generally on arrival.

Be careful to look at abandonment in conjunction with other statistics, such as ‘referrers’ and ‘search terms’ – it could be that too many unqualified or accidental visitors are arriving at your site who wouldn’t have been interested anyway. This indicates that more work is needed on targeted SEO (search engine optimisation).

Also, take a look at what stage in the process they bail out: typically…

• 10% might bail out at the first page they land on;
• 55% at the 2nd click;
• An astonishing 80% by the 3rd click!

Ouch!

Good tracking software will help you find out where the abandonment is taking place, and give clues as to why:

• Do you need better call-to-actions in key places?
• Do you need to write better copy that addresses key concerns?
• Would a redesign of certain areas of the site improve the abandoment rate on particular pages?

Return on Investment (ROI)

Return on Investment (ROI) is a crucial website metric. It essentially tells you how your website is impacting on your bottom line – is your website making money, over and above what it’s costing you?

Calculating your ROI can be tricky, and depends a great deal on what actual spending you’re measuring it against:

• The cost of building (or redesigning) your website?
• The cost of ongoing search engine marketing (SEM) work?
• The cost of other forms of advertising?

Let’s say you’ve just spent £4000 on a year’s worth of search engine marketing. Here’s a very simple formula for working out the ROI:

Let’s break this down a little with some actual figures. In our example, has there been a significant ROI for the £4000 spend?

• Visitors to web site generated by search engines during the 12 month search engine campaign = 10,000
• 2% conversion rate = 200 customers acquired
• Average profit-per-sale generated by the website = £150

Based on these hypothetical figures:

£30,000 is (considerably) more than £4,000 (the spend on search engine marketing) and so the ROI is positive (excellent, in fact!)

Here’s a handy Return on Investment calculator which you may find useful.

How to get this information

Monitoring and tracking website visitors over time to measure these key metrics doesn’t have to be difficult. Here are 3 website analytics packages we highly recommend:

• Google Analytics – unbelievably free, and very, very powerful too. However, with great power comes quite a learning curve. A recent interface redesign has, however, made this package easier to use.
• Click Tracks – commercial website analytics software. Very well-respected and easily used by novices and professional marketers alike.
• Crazy Egg – doesn’t give full visitor tracking facilities, but does allow you to see where visitors are clicking and how they’re behaving, thus improving conversions. At Definition, we’re addicted to Crazy Egg!

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