The problem with most e-commerce marketing strategy today is that companies don't understand how they use things like web analytics. Most e-commerce directors or web marketers are given a budget and told to stick to it, and good analytics don't usually come cheap. Without web analytics you can't even begin to measure key performance indicators (KPI's), which should be a part of any good e-commerce strategy. We often see that marketers face a problem in that they know they need Web Analytics, they just don't know why they should pay for it and don't know what to measure. This three part series of articles will hopefully help clear up some of the things that marketers should measure as key performance indicators concentrating on one KPI per article.
What is a key performance indicator?
In website measurement terms a key performance indicator is a metric which will help your organization define and measure progress toward your websites Business objective. Key Performance Indicators are quantifiable web site measurements that reflect whether you are successfully meeting or falling short of your websites Business goals.
That's quite a boring definition of a KPI even if it is important, so in a last ditch attempt to keep you from falling asleep lets talk about Formula 1 (or the Indy 500) and the KPI's they use.
What has Formula 1 got to do with KPI's?
There are many minute factors in formula one that constitute being a winner. Everything down to the performance of the fuel, the tires, the speed of the pit stops, the quality of engine parts, the weight of the car, it's aerodynamic ability, everything is measured and tested, long before the driver even gets into the car. The difference between the winner of a formula one race and second place can be as little as a hundredth of a second.
That extra hundredth of a second could be because the fuel used on that particular race day allowed the driver to get more out of his car than the guy in second place.
How did the race team know which fuel to use?
Because before hand they had tested maybe 50 different types, each one tuned for the demands of different circuits - or even different weather conditions.
They got that extra performance by knowing the key performance metrics of the fuel, so they could say with confidence that 'fuel a' was better for their car if 'condition a' was satisfied.
Condition 'a' might have been the cars weight that day the type of road surface and the weather. When all matched together it meant that the race team had a particular choice to make when selecting the fuel for the car.
The web site KPI I'm about to discuss is the fuel that powers your e commerce sales and lead generation strategies. Both are measured by practically all web analytics systems, but both not commonly measured to their full potential.
Page views per session, the fuel behind your web Business objectives
For those of you that know why page views and sessions are important bear with me for a paragraph or two. For those of you that don't here we go.
Why are page views and sessions important?
Page views are a metric that represents the amount of times your pages are viewed by the people that visit your website. On it's own it might be an important measurement if you're a very well trafficked content website looking to sell B2B advertising in the form of some kind of ad (banners for instance).
If you can accurately say to an advertiser that you have 10 million page views per week, it's very likely that this alone will be one of your KPI's, simply because if it goes down, your advertisers will most likely not want to pay you as much to advertise with you. It would be important in this case that you keep the page view count at least to the same level every week in order to keep the same level of banner revenue for example.
Sessions represent the amount of users (people) visiting the
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