What (exactly) web metrics can do for you. Fail to plan : plan to fail
Business is based on margins and profits.
In order to generate a specific profit X, there is a minimum amount of sales Y that need to take place.
Business forecast and managing a business rely on calculations. Whether or not costs are covered and sufficient revenue is generated should not be left to chance. Website and customer journey analytics are necessary to determine what is working, what is not working and how to ensure business health. Click to read about driving performance with customer journey.
In a nutshell: business and website managers need to stay on top of actual performance and make ongoing changes.
This is where statistics come in. For a web-based business the success of the business depends on a combination of several metrics:
- The amount of traffic that comes in
- The amount of traffic that converts
- The average, or total, value of the conversions
- Additional consideration is whether or not the revenue is recurring
The take-home is that these metrics need to be reverse-engineered to ensure that the business stays healthy and grows. Projections can be made based on historical data. Current data is then used to calculate revenue projections. Action can be taken if the numbers are not high enough.
Conversion rates tend to stabilise and do not change again, unless something else change – click to read how this works. In other words, if you receive on average 20-30 visitors per day, this will remain more-or-less constant.
Unless you increase or decrease the budget or change your marketing content you will receive a constant amount of visitors.
In a great many cases, the amount of traffic that converts (conversion rate) is also consistent or stable.
The point is that you can use metrics to:
- Reverse engineer (predict) how much revenue will be generated based on current and historical traffic.
- Perhaps more importantly – know when the numbers are too low, when your efforts are not succeeding; and when you need to add or change traffic sources and marketing strategies.
- Businesses rely on predictability. Metrics measure what is actually happening and are used to calculate:
- Signals that additional actions to generate revenue need to be taken
- Validation of continued attempts to generate both traffic and ensure that the traffic is converting. Especially as there are multiple sources of traffic, which needs to be measured per channel (see below).
The last point in this train of thought is that there are multiple channels (traffic sources) through which your customers journey:
- New traffic
- Existing (returning) traffic
- Nurturing (newsletters)
- Direct cold outreach emails
- Blog posts and articles
- White papers and downloads,
- SEO campaigns with different vendors; Google, Facebook, Instagram, Linkedin, etc.
The take-home is that (conversion) metrics and customer journey analysis tells you which of these channels are working and which data is essential to creating and managing success.