Sunday, May 2, 2010

Key Metrics Revisited

Let’s look at some of the key metrics that will help you determine the health of your business and also the quality of traffic that visit your site.

Traffic Metrics:
1.    Session :  This is the most basic of traffic metrics that you can look at to understand the kind of interest that your site has generated. So ideally if you are a content site/blog, this is the most important metric of concern for you. In case you have posted some new content and informed browsers about it (through RSS feed, tweets, etc) you can take a quick look at this metric. High numbers are always good. However don’t read into this metric too much if you are selling something online. Most browsers take 2 or more visits before they have finalized whether or not they want to buy from you. As such it is possible that your session number will be high. So what do you do? Look at the sessions/visitor numbers.

2.    Sessions/Visitor:  This will give you good insight into the number of sessions visitors on your site take to convert (buy something, subscribe to a newsletter, etc.).In case you are managing a content site this metric can give you information regarding the interest level of your repeat visitors. Again a high number is good as it simply shows that your audience came back for more.

If you are into selling stuff online these traffic metric alone wouldn’t suffice for you. You would probably have to show the success of your marketing efforts in terms of revenue generated. So let’s look at some of the ecommerce metrics that can help you gauge your success:
Ecommerce Metrics:
1.     Total Demand/Visitor: Well typically total demand can be a very good metric to look at to give you some idea about the sales online. However it might sometimes give you the wrong picture if you look at it out of context. For example a sudden spike in total demand numbers might give you the idea that your site has started to sell more stuff. But this might well have been a onetime thing, when someone made a large order.  So it is always better to look at Total demand/visitor to give you a more conservative estimate of how well you are doing with all your visitors. Also this metric will give you some idea about the kind of response you are getting from a marketing effort. You can look at the Total demand/visitor numbers for a campaign to determine the quality of traffic your campaigns are bringing to your site.

2.    Average Order Value (AOV): This metric is equivalent to the “Basket Size” for offline stores and helps in determining the average spend per visitor on your website. You can segment your traffic based on the AOV. This can help you make certain marketing campaign decisions. For example  if you see that the traffic coming to your site from social media campaigns tend to have higher AOV, you can improve your sales by doing more campaigning in these sites.


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