Making KPIs work for you

Making KPIs work for you

The entire web analytics process is meaningless if there are no Key Performance Indicators. Therefore, when experts lay down the guidelines to analyze the performance of a client’s website, deciding which indicators to gauge the results against is one of the most important steps. Picking the wrong KPIs not only skews the analysis, it is of no benefit to the business and has no effect on strategy building either.

Hence, to comprehend what went wrong or what will help you get back on track, the following steps are the most essential ones to incorporate in a web analytics process:

Step 1: Determine the Key Performance Indicators to use

As mentioned before, determining the KPIs is an important step. Web analytics has some very popular and generically used KPIs that are put into practice for most performance judgments. 

Some of the most widely used KPIs are:

1. Bounce rate
2. Visits/Sessions
3. Page views
4. Entry & Exit pages
5. Unique visitors average time on site

 Percentage of new visits

Nonetheless, according to the function and nature of KPIs, they differ from one website to the other. Depending on the type of online forum you want to track with web analytics, the Key Performance Indicators for each will vary accordingly. Broadly, most websites belong to four categories, with the following specific performance indicators:

1. E-Commerce websites – Conversion rates, average order value and visit Value
2. Lead generation websites – Traffic concentration, conversion rates, cost per lead
3. Content and media websites – Ratio of visits to unique visitor, content depth, new visitor percentage
4. Support websites – Repeat visitor percentage, content depth, satisfaction Index

Step 2: Track KPIs to make sure reporting is on the spot

To make sense of the KPIs, it is important that you represent these results in a report that enables experts to compare, contrast, relate and associate the indicators with the benchmarks. Naturally, among the various KPIs you use, some will be more important than others. Hence, it is advisable to isolate the most crucial ones and gauge their results and performance over the long run.

The report you conjure will give you a clear picture of the indicators that drive success for your business, how they perform in different time periods and how they relate to other measures of success and your own goals.

Most web analytical tools have a feature for reporting and drafting trend charts in the dashboards that can be set up quite easily. Once you have such a dashboard, you can choose to make the KPI report your landing page as soon as you log in to the software.

Step 3: Establish baseline and cut-offs for each KPI

Baseline is the current result of a KPI. This can be determined once you have isolated the core metrics and set up a report for daily, weekly or monthly progress. When the results of the metrics are out, plug them in the report, and at the end of the week or month, you see the trend or pattern followed by the KPIs. A baseline gives you a solid reference point to relate to. 46

However, there are many factors to take into account when establishing baselines. These include:

1. Seasonal nature of the business
2. Extent of marketing and promotion
3. The kind of website and the duration of time for which it has been operational
4. The amount of data you collect to establish the baseline
5. Any other externalities reported

Step 4: Analyze the differences in the cut-off and the KPIs generated on the website

Professional web analytics have industry averages and benchmark data with them to assess the performance of a website. Once baseline statistics have been generated, you can now see how far off these are from the benchmark. For instance, the bounce rate your website records may be extraordinarily high compared to an average of all others in the e-commerce field.

Fixing poor metrics is what web analytics is responsible for. When the differences and variations are identified, the experts can get to work to bridge this gap for the client.

Step 5: Optimize performance with corrective action

Performance of a website can be improved when new strategies are formed after analysing KPIs. With the help of the results generated, a business can change the layout and design of the website, optimize specific pages in terms of SEO elements, take care of code errors and broken links, build liaisons with referrers and even change the services offered to achieve bigger goals.

There is an array of corrective actions that can be taken in this regard. However, all of it depends on how well KPIs are used to generate reliable statistics.