Why Does Your Site Exist?
That's the first question to answer when determining strategy for using online metrics. You should be able to answer in 10 seconds. If you don't know, or if key stakeholders can't agree on your site's purpose, then you are unable to use online metrics efficiently. And, worse yet, you are missing chances for improving your business performance.
Your Web site exists for a purpose, perhaps multiple purposes, such as:
Understanding why your site exists enables you to effectively use online metrics. Once you've defined your site's purpose, you are positioned to examine Web data in way that helps you determine whether your site delivers on its purpose -- does it exist effectively?
Metrics and ratios that help you assess if you site fulfills its purpose are called Key Performance Indicators (KPIs) - see Eric Peterson's "Big Book of KPIs" for a detailed review of the topic:
But here's the challenge with KPIs: they are all academic, unless you're using them to help you track progress toward predefined business goals. What are the business goals associated with your site's purpose? For your informational site, what's the goal for video streams per visit or time spent? For your lead generation site, what's the goal for the lead conversion rate? By comparing business goals for KPIs to actual KPIs, you can begin to answer the question: "is my site successfully existing and fulfilling its purpose?"
You will continue to answer that question by segmenting your KPIs, investigating distributions beyond averages, and using other techniques for data analysis. You may ask: do certain referring sites have a lead generation conversion rate higher than other referring sites, and why? Do certain audience segments spend more time on site? If so, where do they go on the site and what do they do? If my goal for average time between visits (latency) to my site is five days, and certain customer segments haven't visited in ten days (recency), what does that indicate about current business performance?
By defining why your site exists, creating KPIs based on your site's purpose, establishing business goals for KPIs, and investigating what's driving those KPIs, you can enhance your online business performance in a way that increases bottom-line profit - from optimizing user experience and landing pages, to more efficiently allocating your marketing budget, to improving your product mix, and much more.