5 Web Metrics to track for online commerce for Newbies

After my April blog on vanity metrics and real metrics (http://goo.gl/7KYj5) I have had a chance to meet several people,who are curious about web metrics but do not know where to start. I agree someof us a very adept at reading the googleanalytics blog and come up to speed to read Avinash Kaushik’s blog Occam’s Razor. Very few blogs cover how getstarted and what to focus on, over the last few years I have narrowed 5 keymetrics that work for me (BTW there is a certain level of comfort-ability oneneeds to have in order get these metrics). These metrics are multi-purpose aswell, they not only show you how your business is doing but also highlight theweb experience that a potential client might be going through via your website
The 5 metrics that have worked for me (especially if I want to track the buying funnel) are as follows:
  • · Exit Rates
  • · Churn Rates
  • · Cart Abandonment rates (this is needed if youhave a e-commerce site)
  • · Average Days to Purchase
  • · Average visits to Purchase

I am not inferring that metrics like Unique Visitors, Pageviews, Bounce Rates etc. are not relevant. They are,it just depends on the goal you want to accomplish. In the case of this blog the assumption is that there is a web site on the internet that is just starting and wants to do some level of commerce

Exit Rates:

I am big fan of exit rates because to me they can tell you which page of your web presence is leaking. Please do not confuse this with Bounce rates. Bounce rates are metrics that anyone who lands on your page and then just leaves. If your page has a clear call to action (CTA) and you have a high bounce rate then that is something to look into. Exit rates focus more on the page flow of the session i.e. which people did not just land on the page but more about how people navigate their way during the session
Here is an example of an exit rate
Monday
Page 1 -> Page 2-> Page 3
Tuesday
Page 2->Page 1-> Page 3
Wednesday
Page 2 -> Exit
Thursday
Page 1-> Page 3-> Exit
Friday
Page 2 -> Page 3 -> Exit
In the case above the exit rates would be calculated asfollows
· Page 1 would be 33% (3 of 5 sessions included Page 1)
· Page 2 would be 50% (4 of the 5 sessionsincluded Page 2)
· Page 3 would be 50% (4 of the 4 sessionsincluded Page 3)
Why are exit rates important? They give an idea of how youlead generation activities are performing especially in the context of thefunnel. In the case shown above I would want so see why Page 2 and Page 3 havehigh exit rates? You should ask yourself the question like are you call toactions not compelling enough?

Churn Rates

Churn rates deal with how are you retaining the people thatyou already have. This metric is borrowed from the Mobile operator industry. Ifyou are not seeing people renew (as inthe case of SaaS offerings) or even if you see that people that sign up for atrial once and do not return again (prospective customers). For the latterthere is a stronger content play especially if you selling downloadable onpremise solution. What you want is that after they download they come back toview more content and other key things back at your site. You can complementthis metric with some of the social media metrics especially for prospectingclients as in which user decided to comeback and contribute to forum or posteda comment on a blog post etc. You canalso track based on the cookies you have placed for a particular user etc.There are various ways to track churn via the web.

Abandonment Rate

If you have an ecommerce site then you should track thenumber people filled their shopping cart and then decided not to followthrough. If you are using Inside sales for closing your deals, then you need totrack the inside sales metric of loss percentages for every lead that came inthe funnel and the opportunity was lost.

Average Days to Purchase

This is about how long it takes some to purchase. This theweb term for the average sales cycle i.e. how long does it take to closebusiness. This metric can help you identify whether your offering hasself-evident value. Products are just tosimple and convert easily to sale others usually take a long time and that youwant to fix.

Average visits to purchase

This metric is about how many times a user visits beforethey purchase. This metric gives you an idea of how frequently someone iscoming to your site before they buy. This metric can help in making sure theright content is available to provide the right level of information to assistin the buying decision. This can also help optimize the web experience and helpyour clients go down the funnel you are guiding them too.
Like I said in the beginning of the blog, these are the metricsthat will help you get started. Not only will these metrics help you understandyour web business but also improve your web experience as well. I look forward to hearing your thoughts aboutmetrics that help you in your web business. You can contact me @ kkanakas on twitter with your comments

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