Reading Kaushik (Part 8): Web Metrics

Web Metrics Demystified

Four Attributes of great metrics:

Uncomplex – people have to understand the metric
Relevant – every business is unique
Timely – A fast approximately result is better than a perfect result that takes ages
Instantly useful

Six Web Metrics / Key Performance Indicators To Die For

Conversion Rate: focuses on outcomes, force objectives
Average Order Value: helps you to qualify traffic / campaigns, always see AOV in context
Days & Visits To Purchase: help you measure success correctly, segment
Visitor Loyalty & Recency: engaging experience and marketing campagin effectivness
Task Completion Rate: use VOC
Share of Search: e.g. use Compete, google, hitwise

Brand Measurement: Analytics & Metrics for Branding Campaigns

Why are you doing the branding campaign?
Measurement Recommendations:

Attract new customers
Share your business value proposition: Visitor Loyalty & Recency
Increase your sales
To drive offline action: measure likelihood to recommend and to make an offline purchase, track phone calls
Introduce your business: measure micro and macro conversions
To snatch up market share of your competitors: Share of search
To position yourself: primary market research, google insights, orbitz

Best Social Media Metrics: Conversation, Amplification, Applause, Economic Value

Conversation Rate: #Comments/Replies per Post
Amplification Rate: #Retweets/Shares per Tweet/Post
Applause Rate: #Favorites/Likes/+1 per Post
Economic Value

Video: Successful Web Analytics Approaches by Avinash Kaushik

Again a great video, this time about Web Analytics by Avinash Kaushik. I just love his no-BS style.

Ask the metric: So what? Three times, if it don’t give an action it’s useless
Data should drive action
Give people the information they need – don’t send them everything => no death by data
Home pages of websites, are no longer the home page you want

Where do people come from?
What are they looking for?

Context matters: previous months, years, etc.
Relative numbers more important than absolute numbers
Compare different metrics, e.g. conversion rate and page views
non e-commerce sites:

averages hide truth effectively
How often do they visit?
How recent did they visit?
Depths of visit
=> Understand the value: Loyalty

Segment people
Survey people: What do they think about the content?
Bounce rate: Came and left

Segment by source, entry-page, landing pages, etc.

Rules for Revolutionaries

10/90 Rule: $10 Tools, $90 People: Understand Data & Business, Able to analyze => to extract value
Reporting is not analysis: Reporting -> provide data; Analysis -> prove insights
Data Quality can be low, but is still better than other data
Faith-based initiative: e.g. magazine ad without tracking
Make decisions, don’t argue about the quality of the data
Over time understand why quality is different -> confidence will get better

Conclusion

Decision making is a journey, not a destination
=> Put some level of process in place, mostly for tasks, e.g. what happens to implement a test, etc.
if HiPPo (highest paid person’s opinion) makes the most decisions
=> make experiments
Learn to be wrong, quickly
=> You probably don’t know what your customers want
=> Experimentation

#46/111: Startup

What is it about?

If you want to start a business, you need an idea and a business model and money. Elizabeth Edwards focuses about the latter. She shows you how to cut your personal expenses, how to calculate your financial numbers and why venture capital isn’t always the best option.

What can I learn?

Is your business profitable? Before starting your business, you should check if your business model can generate enough profit. How high is your initial investment and how much does it cost you monthly to operate your business? The next step is to calculate your profit on this basis. How long does it take you to break even, i.e. you aren’t losing money anymore? You should reject your idea if it will take longer than two years.

Capital can be expensive: Before you are going to look for venture capitalists, you should think about your need of outside capital. If you can do it alone, go for it. If you can’t do it without outside money, she recommends you to thoughtfully calculate your costs. Don’t forget to include your opportunity costs for searching investors.

Know your metrics: A business runs on numbers. You should monitor your industry key metrics (e.g. page impressions for social sites) and of cause your ordinary indicators like sales, costs and profit. Even if you aren’t a numbers person, learn how to read your key numbers.

Conclusion

This book is an accumulation of tips but lacks the explanation of why you should do they. This is a bit of a downer. The good parts of Startup were clearly the financial and legal knowledge. If you start your business in the US this information is possible pretty valuable. Lastly, besides of the financial and legal advice most advice is out of other books like Made to Stick or Business Model Generation. I would recommend reading those, if you want to deepen your knowledge.

#36/111: The Knack

What is it about?

What should you know before starting a business? Norm Brodsky and Bo Burlingham try to answer this question. They focus on some topics from money management to hiring. The Knack is especially targeted at former sales persons.

Key points?

Know your metrics: Most sales people focus on the sales volume only. This doesn’t work for your business is your profit margin is too low. Brodsky recommends to calculate your profit margins by hand to get a feeling for the numbers.

Search a niche in an old market: You should focus on an old market because you don’t have to generate demand and often the leading companies are pretty rigid. If you can find a niche which undermines these companies, you can earn a fortune.

Keep your old customers: You already know that it’s easier to sell to your existing customers than to new ones. So try to generate more profit from them.

Build a culture: You will reach a point where it is impossible to do everything by yourself. If you hire people try to hire for cultural fit. This way you will trust them more and they will know what’s important for your business.

Conclusion

The first quarter was extremely good. He told a story from two friends of him who wanted to start a business and he explained lots of steps and how they developed their company. Sadly, stories of other people decreased and it become more and more egocentric. The name of the book is a bit misleading, maybe it would be better if it was named “My Business Life by Norm Brodsky”.