So, you want to encourage people to act? But what exactly do you want them to do and how are you going to measure whether that’s happening?
You might think the answers are straightforward for an ecommerce site. Surely you measure sales? But, in truth, things are rarely that simple.
So, let's take a step back and look at metrics in a broader sense.
Why should we care about tracking metrics?
Having a way to measure the performance of a website (often known as key performance indicators) is fundamental to its success. For a start, it focuses the work you are doing on projects that create a tangible return on investment. Too often merchants focus on website improvements that are vanity projects, rather than alterations aimed at enhancing site effectiveness. Either that or the company bases its decisions on guesses from internal stakeholders.
"It helps us demonstrate the value of the work we do by enabling us to show how our work benefits the business as a whole."
The focus that comes from having measurable success criteria has another benefit too. It helps resolve disagreements between stakeholders about the best direction to pursue. When everybody has a clear goal, working towards it helps ensure everybody is pulling in a consistent direction.
A way of measuring success provides benefits to us as digital professionals, too. It helps us demonstrate the value of the work we do by enabling us to show how our work benefits the business as a whole. That in turn also encourages further investment in our services, allowing us to be more ambitious in the work we undertake.
The question then becomes; how do we go about defining success?
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Defining success through key performance indicators
Organizations typically measure success by defining a set of key performance indicators. These are quantifiable measures used to evaluate the progress of a website over time.
However, deciding what these metrics should be is not always easy, even for an ecommerce website. After all, there are many metrics you could track from the number of sales all the way through to average order value or customer lifetime value. Then, of course, there are also metrics such as social shares, newsletter signups, or engagement. There are lots of things you could track, so how do you decide what to actually monitor?
A good starting point is the overall company strategy. Most organizations have a plan that outlines the broad goals they are looking to achieve. That might be increasing revenue, decreasing costs, or extending market share.
Once you have these broad organizational goals in hand, seek to identify ways that a high performing website could help to achieve them. That might be increasing sales, reducing support queries, or boosting the number of shares on social media.
Finally, turn these criteria into something that is measurable. For example, increasing sales might be measured by either increasing the number of transactions or the average order value, while reducing support queries might be a drop in the number of people phoning the company.
"Don’t become too obsessed with metrics as they’re often less than perfect."
Of course, no metric is going to be perfect. Some people will email instead of completing a contact form, and there is no guarantee that the drop in calls is exclusively due to the website. That is okay. Make your metrics as good as possible, but accept that they will never be perfect. It’s better to measure something than nothing.
However, a word of warning. Don’t become too obsessed with metrics as they’re often less than perfect. As the name implies, key performance indicators can only ever be an indicator of success.
Also, if you settle on the wrong metrics, it can damage the site’s overall performance.
For example, focusing purely on sales often results in manipulative techniques that alienate users and can lead to a reduction in repeat purchasers.
To avoid these problems, seek to have a mix of metrics that balance one another.
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Striking a balance in your key performance indicators
To ensure a balance in key performance indicators, I typically attempt to have a mix of three areas. These are:
- Usability
- Engagement
- Conversion
Let’s explore these in more depth.
1. Tracking usability
Tracking usability is important because it will tie to a considerable range of company goals, from customer satisfaction to customer lifetime value. But how can you track usability? Fortunately, there are some metrics you can look at measuring. These include, but are not limited to:
- Task success rate. What percentage of users are capable of completing critical tasks on your site?
- Time to complete task. On average how long does it take a user to complete essential activities on your site?
- Error rate. How often do users make a mistake when trying to complete a task?
- The System Usability Scale. A long established survey for measuring users perceptions of usability.
- Task Performance Indicator. A metric that combines multiple criteria to judge the site's overall ease of use.
By tracking over time one or more of these metrics, you can start to judge whether improvements to the site are helping its overall usability.
2. Tracking engagement
Ensuring that a site is usable should be a minimum expectation.
- Attention minutes. How long a user is paying attention to content such as videos.
- First impressions. How users react upon seeing the site for the first time.
- Interactions. How often does the user like, comment on, or share content?
- The Net Promoter Score. A metric for measuring how likely a user would be to recommend the site to others.
- Interaction depth. How many times does the user click when navigating through the site?
Tracking engagement often aligns with organizational goals around increasing brand awareness, expanding market share, or other marketing-oriented metrics. However, be careful not to focus on elements such as visits because factors beyond the website can significantly influence these figures.
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Tracking conversion
Finally, the most obvious metric to track is conversion rates. Ultimately, the majority of websites exist to persuade users to take some form of action. These actions often create a tangible financial benefit for the merchant.
If the website belongs to a retailer or service provider, it’s typically relatively easy to track conversion. Ecommerce sites can follow sales, while service companies track leads generated.
However, as I have already said, things are not always straightforward.
For example, tracking the number of leads generated is not necessarily the best metric if those are not qualified leads. Also, it can sometimes be hard to identify whether they have come from the website, rather than through other means.
On ecommerce websites, the fact that not all sales are equal complicates things. Most ecommerce websites want to nurture repeat buyers who have a high lifetime value. But tracking customers over time can prove challenging as people do things like clear cookies or even create multiple accounts.
In these kinds of situations it’s easy to give up on the idea of tracking metrics. However, it’s better to monitor something even if it’s not 100 percent accurate. Also, with a little imagination, it’s often possible to track more than you think.
As you can see, key performance indicators are an essential factor for measuring whether investment in a website is generating returns for a business, which is a good way to demonstrate to a merchant how impactful your services truly are for their business.
And while you should always seek to improve these metrics, you should also avoid setting targets for how much they should increase within a specific timeframe.
Beware setting targets for your key performance indicators
Although beneficial, key performance indicators can also be dangerous. That’s especially true when a merchant starts setting targets related to those metrics.
For example, it’s not uncommon for a merchant to look at performance from the previous year and expect continued or even higher growth going forward. At face value, this seems reasonable, but in reality, it’s often unrealistic.
Typically when you first start tracking key performance indicators, there will be some obvious and easy fixes that will improve metrics. However, over time, as the team fixes more and more issues, it will become harder to move the needle. That will make it unrealistic to see the same or higher improvements year-over-year.
"Instead, we should view key performance indicators as a guide; a guide to where we should invest in our websites and whether our efforts are succeeding."
It’s sometimes possible to maintain a high level of growth, but only if a merchant matches it with increased investment, allowing the creation of new functionality or carrying out more in-depth analysis. That means that in order to keep generating the same level of returns, the company will have to invest more and more money. The point will come when this is unsustainable.
As the return on investment falls, it often leads to a blame game where different groups within the business pass responsibility for the failings around. For example, the web team blames marketing for not driving quality traffic, while marketing blames the web team for poor conversion.
Instead, we should view key performance indicators as a guide; a guide to where we should invest in our websites and whether our efforts are succeeding. They should be an indicator of success, not an unrealistic target.
A guide, not a target
Without a doubt, having trackable key performance indicators is invaluable and every project should have them. They are a guide that can help decision making and prioritization, as well as being a measure of success. However, they can be dangerous too. They can lead to unrealistic expectations and also pursuing conversion while ignoring longer-term considerations. Adopt them, but do so with care.
