Wednesday, January 30, 2013

Web Analytics Framework

For those venturing into the world of web analytics for the first time, it is useful to have a framework to understand the process of transforming data into action.  At its most basic level this framework has five key components that include identifying business objectives, defining goals, associating KPIs with those goals, setting a KPI target, and then creating segments to drill down into various visitor types.

Following the framework below provides structure to the process of developing a strategy from web analytics.[1]

1.  Business Objectives: the foundation of the process is to identify the overarching purpose of the business.
2.  Goals: what are the goals related to these objectives?  This helps teams focus on what is important, so they can best utilize their time.
3.  KPIs: these are the metrics that are attached to our goals.  Some common KPIs are conversion rate, average order value, days and visits to purchase, visitor loyalty and visitor recency, task completion rate, share of search. 
4.  KPI Target: setting this target enables you to evaluate whether or not the target was missed or met.
5.  Segments: drilling down into the characteristics of various visitor type enables you to understand what various groups of visitors are responsible for helping to meet or not meet targets. 

Once the above framework has been developed, an important next step is to develop a dashboard to communicate this information to decision makers.  This is where value is created, as information is not valuable if actionable insights are not being developed.  Software exists that facilitates the development of dashboard.  One free solution is Straigent, which comes on the CD bundled with Avinash's Web Analytics 2.0 book. 

Following best practices will enable new analytics professionals to get up to speed quickly, and leverage the experience of others.  Starting with these principles in mind will enable your team to increase your efficiency, and focus on what really matters.  Below are 8 R rules to guide your strategic effort:[2]

1.   Start simple, and start with outcomes.
2.   Leverage metrics that identify success for areas where you spend the largest efforts
3.   If you are unable to segment a KPI, choose a different one
4.   "Brand" and "site usage" can be measured, loyalty is very important
5.   Make sure to include a couple of metrics that report the voice of the customer
6.   Tie your web metrics back to traditional metrics
7.   Always include KPI's that give you a window into competitive intelligence

Effective web analytics requires a process of continually developing new hypothesis, and challenging existing assumptions.  Because of this it is useful to go through this process regularly with a fresh mind once an initial program has been established.  As your business adapts to the changing world, your metrics and segmentation will likely change as well.  Best of luck with the process!



  1. This was great in helping a new web analytics user better understand what is involved. I think a key point that you mentioned is that identifying business objectives will help you focus in. Knowing what you're wanting to look at is key to every analysis.

  2. Yes, I agree that thinking about business objectives is a good first step. Keeping that in the forefront of your mind allows you to reduce noise and focus on what is most important.

  3. Great tips and very easy to understand. This will definitely be very useful for me when I get a chance to start my blog.
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