Web 2.0 – Four Key Metrics

Many people have put up web sites with the aim of selling a product or a service, want to improve things to sell more of their product but target the wrong things (such as page hits), or make random improvements without really understanding how effective they are.

Four things that can be easily tracked, the results of the tracking understood, and improved.



1) When someone enters your website, which actions do they perform.

You need to understand the percentage of people who visit your web site who perform different types of action.

Actions may include things like viewing detailed product descriptions, looking at product comparison charts and sending a message to a customer service representative.

2) Does each action drive sales

You need to know the percentage of people who undertake an action who buy from you, and compare it with the percentage of people who enter your site.

How to measure 1 and 2

• When someone enters your site you can start a session and record the ID of the session to a database table.
  
• When someone performs an action, you record the ID of the session and a code for the type of action.
  
• When someone buys your product, you record the ID of the session and a code representing "sale".

How to use this to improve sales

• If lots of people undertake action 1, but action 1 is not positively correlated with sales, then action 1 needs to be developed to ensure people buy your product as a result of taking it.
  
• If a few people undertake action 2, but action 2 is positively correlated with sales, you need to draw attention to action 2 to ensure that people see it.
  
• If few people take action 3, and action 3 does not drive sales, the action can probably be dropped.

3) Convert Sales into Buzz

People buy based on recommendations from their friends. You need to ensure people tell their friends when they have had good service and track this.

How to measure this

• Search for some of your company's sales terms using a search engine. If you sell blue widgets, search for "blue widgets".
  
• See what percentage of these contain positive "buzz" about your company.

How to use this to improve sales

• Develop user communities and ensure people can see them.
  
• Encourage people to write about these communities and your products in blogs.
  
• Track how the number of sales compares with the number of web sites with buzz about your products.
  
• Note which user communities and ways of encouraging people to write about your service are successful and do the same in future.

4) Ensure customers remember their user experience and come back for more.

It is easier to keep an existing customer than generate a new one.

How to measure this

Track the percentage of sales that are repeat orders.

How to improve this

• Develop a catchy URL and promote it on all your sales materials
  
• Remind users about your site, with carefully targeted promotions. You might want to target some promotions at half of your users, to better see if they result in improved sales.
  
• Note which of these result in an increase in the percentage of sales that are repeat orders, and do the same in future.