Using web analytics to boost sales

Written by Paul on January 28th, 2009

Today, thanks to the Internet, the amount of data available to any company with a website dwarfs anything you can build yourself. Web analytics programs track nearly everything that happens on a website, keeping a real-time record of how potential customers find the site, how they behave on it, and why they buy (or, more importantly, don’t buy) your stuff.

The wealth of data is so great — you might learn, for instance, that customers in Toronto typically spend three minutes on your site, use Firefox and have a 7% conversion rate — that many entrepreneurs find it overwhelming. If you were to look at every piece of data in your Google Analytics account, you’d go crazy. Well, you’re in luck — here are five tips for understanding your website’s analytics (read: make more money):

1. Who’s looking at your site anyway?

A look at your traffic sources can help you measure the mix of traffic arriving at your website and see the effect of marketing activities, both online and off. Normally, the biggest chunk of a site’s traffic comes from search engines, followed by roughly equal streams of traffic from referring websites and from direct traffic — that is, people who type in a Web address. If your numbers to look like this, it could be reflection of where you’re actually getting noticed the most. (e.g. If direct visits are up and you recently invested in a full page spread in the NYT, there may be a correlation there — use better tracking codes in the future so you can measure this properly.)

If you’re a business and your graphs look spiky, that’s not a good thing — your goal is build long term traffic. I’m not telling you to ignore StumbleUpon, Twitter or any of the other social media tools out there, just make sure that you keep a close eye on your daily conversion rate. If you’re using Google Analytics, setup the Goals feature immediately and you’ll have instant access to your conversion rates.

2. Are visitors finding what they want?

Pay attention to the average number of page views for your site. Most people may think that higher page view counts are better — but that only holds true at big entertainment sites, such as YouTube and MySpace, where clicks directly translate into more ad revenue.

If you’re running an online retail store or your general company website and the average page views seem high, things get a little trickier. In most of these cases, you’ll find that the site bounce rate is also high (relative to avg. page views) which can sometimes indicate that people simply aren’t finding what they’re looking for.

In general, focus your efforts on improving your daily conversion rates by A/B testing to determine which pages result in higher conversion counts. This is dirt simple — use Google’s Website Optimizer for free. It takes 5 minutes (seriously! read this: how to pick A/B test candidates) to setup a test page, insert the code and kick off the test. Depending on how much traffic you have, you’ll be able to generate reports on how your new page compares to the old one.

3. Keep an eye on your bounce rates.

A bounce rate in the 20-30 percent range is pretty good. Though, most unoptimized websites will have bounce rates that top 50 percent — certainly not good. Spend some time figuring out what your users are looking for and give it to them. Use a free service like Crazy Egg for a super-easy way to visualize what users are clicking on and make more of whatever it is.

If you’re using Google Analytics, keep a close eye on your bounce rate by traffic source. In my experience, this one report can help you make the biggest improvements. For example, if your search traffic is more likely to bounce than direct or referring traffic, you should start digging into the search terms that visitors are using to find your site — it’s likely that the page they’re getting dropped on to doesn’t match up with what they were searching for.

If you can bring your bounce rates down while simultaneously maintaining (or, better yet, increasing) your conversion rates, you’ll make a ton of money.

4. Track your goals!

I already told you to setup the goals feature — if you haven’t, go back and re-read #1. The Goal Funnel tracks customers during the sales process and gives you the ability to determine where they dropped off — this is the rate of abandonment and you should keep a super-close eye on it if you’re really trying to get users to sign up or buy something on your website.

Use the info you learn here to improve the individual steps your visitors take to complete a goal on your website. It’s easy and you’ll probably smack yourself for not doing this one thing earlier. A friend of mine did this on his website (selling tax services, of all things) and he made an extra $10,000 in the following month simply by reducing his rate of abandonment. Easy money.

5. People don’t have to know your name — get over it.

It’s so funny to watch people searching for the name of their own company on Google, Yahoo or whatever other search engines are out there. If you’re one of those people, listen to me: STOP. The people that search for your company’s name to find you are not the people you need to worry about! Be concerned about all the people searching for the stuff you sell that never find you.

If you sell shoes, then people should be able to find you when they look up the specific shoes they want. After all, no one (that I know) cares whether they buy their shoes from Sports Authority or Foot Locker — they just want to know who has the damn things so they can go get them.

Conclusion

Simply having a website doesn’t cut it anymore — set aside an hour a week to review your key metrics and setup some tests for the following week. That’s really all there is to it. You don’t need fancy reports or custom-made analytics! Stay focused on conversion rates and goal funnels — you’ll make a killing out there.

So, the above is a pretty basic list — what tips do you have?

Enjoy that post?

Subscribe via the RSS feed or email updates and get the latest posts without checking the site.

Want to think like an investor?

4 Responses to “Using web analytics to boost sales”

  • You always have a sharp mind when it comes to this. These ideas are spot on, and I need to get my butt in gear with some of them. Thank you, Paul!

    — 02/15/09 at 1:10 pm

  • Good information. Thanks!

    — 02/16/09 at 1:18 pm

  • Paul, looks like CrazyEgg isn’t free anymore :-(

    — 02/20/09 at 7:32 pm

  • Paul, I have been experimenting with HiConversion, and adaptive multivariate testing tool. By adapting to the most successful combination real-time, not only can you significantly reduce the length of the experiment, but you can also improve conversion rates during the experiment as well.

    We are doing some experiments with Mosso using this tool, so I should have a more complete evaluation of the tool compared to Google’s WO in a few weeks.

    Ryan

    — 02/26/09 at 11:44 pm

Leave a Comment or a Question




Explore Results Junkies