How do you know whether something is working if you don’t know what ‘working’ means? If your site gets 25,000 visitors a week, is that good or bad? You might reply that 6 months ago you only got 17,000 monthly visitors and therefore it must be fantastic, but how do you know that you haven’t simply moved from really terrible to slightly less terrible?
The way to get out of this is to set good, robust goals for your KPIs – ones which are achievable and based on sound insights and benchmarks. This isn’t just a ‘nice to have’, it is the foundation of a good web analytics measurement strategy or the downfall of a bad one if it’s missing!
Why goals are so important in web analytics
To illustrate the importance: imagine that your website drives offline sales of retail products. Recently you have gradually but consistently improved visitor numbers and congratulate yourself that this will mean more sales in stores. However, unknown to you the market for your particular product has just exploded and there are floods of eager new customers looking for ways to buy it, almost all of whom end up at your competitors. The ultimate effect of this is that you rapidly lose market share in the stores, but of course you never see any of this because you’re too busy congratulating yourself on your 2.3% increase in visitors.
To simplify this a bit – imagine if you owned a shop but never ever left the building or looked outside. You might think you’re doing well because your 10 average customers a day is more like 12 these days, but what if in reality the street outside was teeming with thousands of people and all the other shops had mile-long queues? Would you still think you’re a success?
So, goals – they’re really important! Here’s some tips on how to set them and use them:
How to create goals for your website KPIs
Creating a goal for a KPI is simply about asking first ‘where are we now?’ and then ‘where do we want to be?’ – there are a variety of data and insight sources that you can use to do this. In an ideal world you will use all in combination:
Corporate goals – This is so obvious that it shocks me how often it is ignored by web analysts and even marketing folk. Put very simply: how does your website relate to the overall goals of the business, and what does it need to do to help achieve them? For example, if you have a content site that makes money through ad revenue, how much ad revenue do your shareholders want/need in the next year? You can easily work backwards from this to understand what your goals should be: if you need an extra £85K revenue, how many additional visitors do you need and/or how many extra pages do you want people to view? Simple!
Competitive benchmarking - how do your competitors perform against the same KPIs? Whilst this can be difficult and sometimes impossible to find out, what information can be got is insanely useful. Ideally the data should be linked to corporate goals: if you know that your arch nemesis achieves 5 times the traffic that you do – but you also know that they target a larger and less profitable market segment than your strategy dictates – then you can use your market share estimates to work out what your traffic should be, rather than blindly trying to follow them on a pure number. Good sources of competitive data are commercial providers like Compete, Hitwise and Nielsen; as well as free tools like Google Trends. Failing that you could just ask them. You might be surprised how open they would be if you offered to share your stats in return.
Targeted improvements - Sometimes you just want to push yourself. Even if you have great competitive benchmarking, why stop at matching the competition? Push yourself further! This is about understanding what is achievable and stretching yourself slightly beyond it. Very useful if you have staff that work to bonus targets.
Common sense – if you know your business very well and have a good gut feel about where it can go, you might be brave enough to just use your intuition. Be very careful with this though, an unachievable and unrealistic target is often worse than having no targets – it will lead you on a wild goose chase!
How not to benchmark your performance
I have often seen people set up KPIs and then monitor them using a statistical method called standard deviation. In simple terms this is just a way of making sure that your KPI figures don’t fluctuate dramatically; i.e. they don’t deviate from the average in a given period. If the number improves you can learn from it and roll with it; if it declines you can understand why and rectify it. Whilst this has it’s uses on a day-to-day basis, this is a disastrous way to handle goals. Why would you not want to deviate from the average (mundane)? What else is business except the striving for improvement? No brainer!