Everyone knows that they need a web site, if only to say that your business is more technologically advanced than your six year old neice. If you don’t have one now, then you will have one eventually, even if it is only a single page that serves as an ad. Putting up the web site is only half the task. Understanding how people use it is the other half. A web analytics service will tell you a lot about how people find information on your site and if they can’t find it then you may get some clues about how to fix the problem. You will also be able to measure ROI as a result of comparing business booked through the website to the cost of developing and hosting the website.
Speaking of ROI, web analytics gain more value when they are aligned with your business goals. For example, a content heavy website that relies on advertising will need to know how many people visit and how many pages each visitor views (I regularly compare web analytics reports with advertising reports on my Game On! blog just to keep everyone honest). An e-commerce site needs to know which products are viewed most often and how the customers advance through the purchasing process. A good content strategy (knowing what to post) will hopefully result in higher sales because readers will want to spend more time on the site.
Key metrics include unique visitors, page views (no longer called hits), navigation paths, and the amount of time spent on each page and the site in general. This will allow you to understand which topics readers find most engaging and develop more content along those lines. Paying attention to navigation paths (or clickstream) will allow you to reorganize your site to make it easier for readers to find the information they want.
An E-commerce site would take the above metrics and add more so that they can understand how efficient and effective the site is at converting visitors to sales, or eyeballs to dollars. You can track the effectiveness of e-mail campaigns, calculate the percentage of site visitors that buy things, and understand how much of your business is from repeat visitors. You can determine whether a particular item is more popular than others and maybe bump it up to the home page to grab visitors attention right away. It is critically important to understand how and why visitors abandon shopping carts.
It’s also imortant to know the referring address, or how the visitor found you. This way you can understand who links to you and then approach similar sites and offer to trade links. Search engine keywords are critically important so you can understand what people were looking for when they found you and then promote that content on your site so more people can find you. Your top keywords might be good Adwords to buy. There’s a whole art/science to this called Search Engine Optimization that I’ll probably write about at another time.