YOU’RE DOING ANALYTICS WRONG.

It’s time to stop counting hits and start defining success.

Try to think back to your childhood and see if you ever remember dear Mom uttering these words to you: “If you can’t play with your toys right, I’m going to take them away.
Did it change your behavior? Were you allowed to keep your toys? I hope so, because I’m very close to using that same infamous phrase with many of today’s organizations when it comes to analytics.

Start using your digital analytics right, or I’m going to take them away.

The simple fact is that most organizations are so grossly misusing their analytics data, it’s obscene. I still cringe everytime I hear a people talk about hits. Hits? Are you serious? Hits became irrelevant faster than MySpace. Analytics blogger and Google evangelist Avinish Kaushik calls hits, How Idiots Track Success and I couldn’t agree more. Ok you say, maybe I don’t really mean hits by their true definition (even though most don’t know what the true definition of a hit is). What I mean is an overall measure of web traffic. Okay, so visits or pageviews maybe. Throw in a little time on site numbers maybe a bounce rate or two and what do you have? A cocktail of statistics that looks impressive, deep, dynamic… but in reality is virtually meaningless.

Organizations simply HAVE to get past high-funnel statistics like site visits, pageviews or even more campaign-specific metrics like impressions, clicks and click-through-rate and dig MUCH deeper to measure outcomes with… wait for it… quantifiable economic value. So you ask, “Where in WebTrends, Google Analytics, Coremetrics etc, do I find the outcome data?” There’s a very simple answer.

It’s Not there
What’s that? You say it’s not there?
Nope it’s not there. At least not by default
Here’s another shocking truth about what it takes to use your digital analytics correctly. Half of the effort in developing a complete picture of digital analytics in my opinion doesn’t involve analytics at all. Or computers. Or websites. Or campaigns. Half of proper analytics analysis is done completely outside of any analytics software. (pause for effect) It lies in determining those outcomes that lead to direct economic value for your organization.

Enough insight mumbo jumbo. Time for an example.

Williams-Sonoma’s ultimate online outcome is a purchase. That’s pretty much a no-brainer. When you go online and purchase the All-Clad Stainless-Steel Nonstick Roaster with Rack, you’ll pay a nifty $229.95. It doesn’t take a math degree to figure out that the economic value of that goal is $229.95 just considering the gross revenue amount, but a halfway decent finance department intern can look up the net profit value for that goal if you want to ask. There are other goals to consider as well however. What about the user to signs up for a wedding registry? Downloads a recipe? Signs up for an email newsletter? Follows them on Twitter?

Your website might not have transactional actions at all. That doesn’t excuse you from establishing outcome goals and setting economic value for each one. It’s just a little harder. The end result is that you should be able to get to a place where you can confidently report that the $5,000 you spent on a Facebook ad campaign last month directly generated $X and a positive ROI. Now that’s the kind of reporting that will get a c-level exec excited. No hits required.

Here are some steps to get you started:

1. Identify Outcomes & Determine Economic Value
I’m going to operate under the assumption that your website has “softer” outcomes compared to a very straight-forward purchase. The goal can include a lead generation goal such as an information request, a white-paper download, or free-consult request. It can also include an event like a video view or an RSS subscription. Using a dynamic phone number replacement tool like MarchEx, you can even count phone calls to your call center as a measurable online goal.

In any case, give thoughtful consideration and pester whoever you need to within your organization to get to the point where you can assign a financial value to each outcome. Your sales department might be able to tell you that 10% of users who download your whitepapers become a customer. Finance tells you that the average customer generates $1,500 in gross revenue and $250 in net profit.

So what’s a whitepaper download worth to you?

$250 X 10% = $25
It’s a fairly simplistic example, but it should give you the general idea. Now let’s get some analytics data.

2. Configure Analytics with Goals
I won’t get into the debate here as to the pros and cons of different analytics software. Pick whichever one you like. Make sure it’s installed properly on your website and configured properly for clean and reliable results. Now let’s get past visits and pageviews. These metrics have their value, but if that’s all you’re looking at, you’re missing the boat and I’m going to take your toys away.

Configure the goals or outcomes that you setup in step 1 in your analytics software. Remember the ultimate hope here is to be able to report on outcomes – not half empty web site statistics. Who cares if you drive 10,000 people to your website who don’t convert? I’d rather have 100 that convert well.

3. Tag your Sources & Attribute
Now let’s make sure that all your digital tactics get proper credit for their hard work. If you do paid search, seo, email marketing, digital display or social media, all these tactics eventually have links back to your website where you hope the user will ultimately settle on one of your outcomes. To make sure your analytics software properly gives credit to the email campaign that resulted in that whitepaper download, those inbound links have to be tagged.

Now for another truth – rarely does a customer convert on your site after just one interaction – be that a paid search ad or a email newsletter or a banner ad. The concept of multi-channel marketing attribution has gotten a lot of attention recently and rightfully so. Technology is just now reaching the point where small to medium sized companies can affordably perform multi-channel lead attribution. We won’t spend a great deal of time on that subject here, but just know that if you aren’t performing attribution modeling, you should be.

4. Measure, Test, Tweak & Remeasure
Ok – we’re pretty close now. With your goals set and monetized, your analytics software properly configured and your inbound sources tagged, you can begin to see the fruit of your labor. What campaigns are generating the best results for you. REAL RESULTS. Measurable, attributable, reportable outcomes.

Use it to help you determine which tactics are generating more money for your company. Use it within a campaign to determine which creative is more effective at converting. It may or may not be the same creative that’s the best at producing traffic. Use it to test variations of ads, keywords, email subject lines, landing page copy and more. Make some adjustments and test some more.

You don’t have time for all this constant testing, tweaking, measuring and repeating? Make time. Or hire someone to help you. It will be well worth your while.

It’s time to stop defining success as visits and pageviews, as clicks and impressions. It’s time to start measuring success as… actual success.