These business leaders are asking the right questions. In most cases, there is room for improvement – and a strong business case, too, given that online is a low-cost, proven channel that generates measurable results.

That is, attracting more customers, generating leads, creating buzz and awareness, or simply improving business efficiencies.

Quantitative analysis is the fastest and most effective way to find out how you can better leverage the online channel.

Quantitative analysis the key

The best way to understand how well your website is currently working is through quantitative analysis. This strategic tool paints a clear picture of the best and worst aspects of your site; and, as long as you are prepared to act on the findings, your site’s performance will improve.

I have talked in the past about the importance of quantitative analysis, and the message is as relevant as it ever was.

When we help our clients analyse their websites, we start with the absolute basics:

• Are customers coming to your website?
• What are they doing on your site?

From this baseline, we can identify the gaps or pitfalls, develop a roadmap to plug these gaps and ultimately improve the performance of the online channel.

It sounds simplistic, but of course we cannot reach any conclusions without a comprehensive understanding of our client’s business and their strategic marketing approach.

Reassess your KPIs

During the assessment phase, it’s important to cross-check the stated objective of the site against its KPIs. Setting up good KPIs is critical for the ongoing monitoring of a site’s performance, and it ties in beautifully with a quantitative analysis.

With a vast array of measurables to choose from - page views, cost per acquisition, new visitors, the list goes on - there’s absolutely no point in trying to do it all. Rather, you should realign KPIs to match current business priorities and focus on getting accurate, timely data to support these KPIs.

The right KPIs enable you to track issues, identify opportunities and provide relevant recommendations to senior management about the online channel.

Augment with benchmarking

Once you have identified gaps in your website, it pays to check out what the best of the rest are doing. Seek out best practice in your industry and benchmark against comparable sites. This enables you to gather fresh ideas and set a clear direction for your own site.

In conclusion

Rationalising your website. Realigning it. Resetting it. Call it what you will – but any form of strategic re-evaluation of your online channel now will pay off in the long term.

I know it works. Having provided website analysis services for many clients in the past few years, and seen these clients reap measurable rewards from the changes enacted, it’s a proven investment.

Knowing that your website is doing OK is more than just about peace of mind. If it’s not up to scratch, you need to know how you can fix it. If you just ignore the problem, then you run the risk of losing customers – and at a time like this, every single visitor counts.

With so much data on hand, the online channel is still struggling to figure out an effective way to report its performance. Many organisations are now exploring Key Performance Indicators (KPIs) for reporting due to their simplicity, widespread recognition and powerful communication.

A good KPI should be easy to understand, states the current level of performance, sets direction and prompts action.

However, while reporting on raw data – such as number of visitors, page impressions, number of exits per page and so forth – might be useful for operational purposes, it will not impact strategic decision making.

A major concern for web analytics professionals should be how best to use the data to impact decision-making, and then how to make sure the data is easily understood throughout the organisation.

KPI reports for the online channel should embed the following best practices to improve relevance and enable better decision making:

1. The data the reports are based on must be accurate, and free of bias. KPI reports that rely on inaccurate data sets are not only invalid but also dangerous as they may cause the wrong decisions to be made.
2. KPIs need to be tailored to the objectives of the audience group, and be industry specific.
3. Data captured via the online channel is rarely enough to deliver the information required by management. Web data should be amalgamated with customer data.
4. Web data requires timely analysis and interpretation – data is captured instantly and reports must support immediate action.

Each of these best practices is described below.

Accurate data and free of bias

It should go without saying that KPI reports cannot be based on inaccurate or biased data, but it is not uncommon to see that campaign tracking has been setup incorrectly and results are being misinterpreted.

Similarly, marketers often only report on high level results by campaign and channel, but are not able to explain how the responses of one channel (eg online) were influenced by another (eg DM).

Common lapses occur due to:

• Inaccurate tracking
• Overlap between channels (online, DM, email, above the line)
• Overlap between ads on multiple sites
• Not knowing which individual components of a campaign worked (price, text, headline, colour, placement, etc)
• Uplift provided by paid search vs natural search

Most inaccurate campaign data can be avoided by designing campaigns up front using techniques such as Experimental Design or at least A/B testing; then analysing the results using multivariate analysis. Without this, campaign results often just rely on high level reporting and estimation.

Yet, according to Bienalto’s Australian Web Analytics Survey 2007, very few companies or agencies conduct multivariate campaign analysis.

Tailored KPIs to match specific objectives

KPIs need to be defined specifically for the job role of the receiver – for instance, executives would require different KPIs than operational personnel.

The crucial first step is to define your reporting audiences. These may be senior management, but are also likely to include marketing, sales, finance and product managers. Online managers also need the right reports to function in their role.

Next comes the identification of what each one of these reporting audiences needs to know, what the information will be used for and how often it is required.

This has to be considered in the context of the specific business objectives for each audience group – what information does the audience need in terms of reaching their business objective.

Remember, the information requirements of management are rarely met by generic reports. It is, for example, little use for a bank’s Retention Manager to know how many customers use online banking. But it will be a relevant KPI to track the percentage of accounts that have active Bill Pay.

Similarly, for a Credit Card Product Manager it is useful to know what the cost per response was for the most recent online campaign, but this KPI needs to be tracked alongside KPIs for approval rate, churn rate, and profitability per card.

This links to the requirement of reporting on online data as well as offline data.

Encompassing offline and online data

There can be a disconnect between website data and the customer data in CRM systems. By keeping website data separate to offline data, you get a pile of tactical reports that are difficult to interpret in terms of impact on business.

The online channel should be integrated into the overall marketing strategy. A company might, for example, email customers who have undertaken certain actions on a website, or compare the web data to transactional data.

Typically we differentiate between three types of data:

1. Behavioural – the user’s behaviour on the web, described via click-stream analysis
2. Profile data – typically demographic or descriptive data supplied by the user and collected via log-in or surveys, but can also be third party data appended at segment level
3. Transactional data – offline transactional data eg banking data, insurance data, purchase history, etc.

Some companies only report on behavioural web data in their KPI reports. Most companies should be able to append some degree of profiling to the web behavioural data. Few companies are able to overlay their transactional data to their web data.

Web analytics is linked with customer intelligence. Particularly with the current focus on event based marketing (EBM), it’s more important to use online and offline data within a data mining environment. This will identify triggers or changes in behaviour that suggest a certain demand. Analytics will determine the best offer which can then be communicated to prospects and customers through both the online and offline channels.

Best practice suggests an integrated multi-channel approach by which the same offer is communicated to the customer consistently across multiple channels.

A multi-channel approach means marketers use different campaign channels in combination and are aware of their impacts on each other. For example: What is the overlap between those being targeted for DM and email and those that respond via web? What measurable lift does a DM campaign have on leads captured via the web? Did the DM campaign impact the behaviour of the high demand segments, or would they have responded via the web anyway?

Timely analysis, interpretation and action

By its very nature, the web channel allow for data to be captured instantly and actions to be applied immediately. It’s surprising that many marketers only see high level reports on a weekly or fortnightly basis. Online ads, search engine marketing (SEM), email campaigns and online user behaviour can all be tracked instantly, and actions can quickly be made to improve results.

For instance, a KPI might indicate that the click-through rate for an email campaign is down by 20 per cent compared to other campaigns that are tested in parallel. Using multivariate analysis, the analyst should be able to explain what components are not working for this particular campaign, and changes can be made immediately. No good reporting a week later that the campaign did not work!

Analysis should be done early and throughout – not at the end. Exposing the customers to a campaign and posthumously finding out that it did not work is not good enough.

Similar rule applies to site traffic. A small design change to a site might have a detrimental effect to that site’s conversion rate. These things need to be picked up fast or they can be very costly.

KPIs should also avoid simply reporting on “What is happening” without analysing “Why”. It is a fair assumption that a senior manager will ask that question.

Conclusion

KPI reports translate analytical data into metrics required to track performance against business objectives.

Most companies are aware of the importance of using KPIs to track their online performance. Many, though, still rely on generic high-level reporting not supported by analysis. These companies run the risk of not knowing the reason for changes in KPIs – or more seriously – their KPI reports might be telling the wrong story.

The need to set KPIs that communicate information in the context of specific business objectives and that are aimed at specific audience groups cannot be overstated.

Good KPI reports should show how marketing is impacting the bottom line, what is and what is not working, and they should be presented in a manner that supports timely decision making.

Intended for web analytics professionals at beginner and intermediate levels, the toolkit provides a simple framework to set up a web analytics initiative. It includes instruction on:

• Setting realistic objectives for your website
• Developing key performance indicators (KPI)
• Implementing measurement and reporting mechanisms
• Practical tips for optimising your website through web analytics.

“The Victorian Government is actively encouraging web managers to optimise sites by studying content usage and onsite search behaviour in an effort to to become a best practice leader in online customer service,” says Cheryl Hardy, Project Manager Victoria Online.

“The toolkit is a very useful addition to the Government’s best practice guidance in website management.”

The toolkit is published on the eGovernment Resource Centre.

The question generates interesting and lengthy discussion about various aspects of reporting such as:

• Rationale – why bother reporting
• Audiences – who should be getting the reports and why
• Content – what the report should contain
• Format and size – what format should the report be presented in, what is the ideal size, how effective are dashboards, charts and tables, etc
• Method of delivery – should the report be emailed or provided within a web analytics tool
• Frequency – how often should reports be generated.

Early in these discussions, I ask about the current practices. Many people think their reports are ineffective and add that no one really cares about them. Probe a little more, and I find a number of common problems emerge:

• The reports are long
• Everyone gets the same report
• The reports mostly consist of charts and tables with little or no commentary
• It takes too long to produce the reports
• Stakeholders are engaged poorly
• The reports do not prompt action.

Amongst our clients, we observe that when executives embrace the online channel and demonstrate leadership, the success in this channel is imminent. This occurs because senior management drives it and demands it, so over time an appropriate reporting scheme establishes itself.

Of course, this does not mean we should wait for leadership from above to sort out our web analytics reports. Exactly the opposite. As web analysts, site managers or owners, we can use our web analytics reports to influence and cultivate the relationship with senior management. At the same time, we can use them to assist with the day to day operations and ongoing improvement of our websites.

Rules of reporting

Don’t fall into the trap of producing a single report to serve all. You might have started with a small report, which soon grew large and unmanageable as additional information requests were incorporated into the standard report. Break your report down, segmenting by recipients and the expected function. To do this, you need to define a Web Analytics Reporting Framework.

Step one: define your reporting audiences. They are usually your internal stakeholders for the online channel. Some may be strategic, as they fund and influence the online direction in terms of products, services, content and functionality. Some may be contributing content and they need to know how well their content is performing. Some may be responsible for a service. Don’t forget yourself as the web analyst or site manager. You need the right reports to perform, too.

Step two: identify what each reporting audience needs to know, what for and how often.

Step three: determine process. Work out the best possible way to produce the reports, ideally automating them as much as possible. Efficiency is critical here because you don’t want to become a slave of producing the reports day in, day out. Some reports may require extra data analysis and interpretation. If you are short of resources and do not have these skills in house, consider outsourcing these. Many web analytics consultants offer this, including Bienalto.

Before too long, you will have defined your web analytics reporting framework.

Types of reports

Below is a list of reports that we identified for a large content-oriented website, using the process described above. The information sources are indicated unless the report could be produced from a typical Web Analytics solution.

I enjoy these sorts of questions as they lead to serious web analytics discussions. The key in answering them is understanding the circumstances and building a stable foundation. Setting targets for metrics is not a simple process. Without knowing the specifics of the site or anything about the business itself, one cannot propose a target figure for any metric. Even when you do know, it may be still tricky and unrealistic because various aspects of the website and the marketing strategy may prevent the business from reaching the potential target. The website and associated marketing activities should be studied and aligned first before instilling predictability to the metrics and achieving the potential target.

Confused? Let me use an example to discuss the process. We have a NGO (not-for-profit organisation) which is having issues with its online donation process. The online marketing manager from this fictitious NGO approaches me to ask what the optimal target for their online donations should be. She adds that they are currently getting 300 or so online donations a month, but she has no idea if they are doing well and if this is within the industry norms.

Of course, I cannot give a definitive answer. I say, “It depends,” and then ask:

• What is the online share of the donations?
• How else can donations be made?
• What is the average donation value by method of donation?
• What brings existing and prospective donors to the website?
• Is there regular online communication with donors?
• What is the average monthly visitor number?
• How many people visit the donation page?

These questions help me understand the relevant circumstances and start forming my views. They give me an idea on whether 300 is a good or bad number, and the potential target. I could even compare it to published benchmarks, and against our experiences from other client work. This is a check-point or qualification stage, which precedes discussion about how to maximise online donations.

The process from here is hands-on. The user experience should be studied with a web analytics tool, preferably one that is capable of segmentation and page level analysis (i.e. traffic overlay on actual pages), answering questions such as:

• Is the website able to guide visitors to donations?
• Which sections are? Which aren’t?
• What are some of the options to drive more visitors to this section?
• What do the visitors do in the donations section?
• How effective is the donation form?
• Is form tracking needed to measure things like view only, form attempts and abandonment, successful form completions?

At the end of this exercise, a host of new ideas and possible changes to the site functionality, design, copy, and marketing and communications initiatives would surface so the NGO can guide more people to the donation area and convert more to donors. As they tinker more with the website, the level of predictability will increase as a result. Once all the major issues are resolved in combination with a solid online communications plan – they can then confidently start talking about the real targets.

The NGO example is one of hundreds. But it certainly illustrates that setting realistic targets for metrics is a process involving studying the circumstances and establishing a stable foundation for the website.