We’ve all done this: Launched a new website for our company, installed Google Analytics to track all sorts of data, and proceeded to occasionally keep an eye on our traffic and looking at the sources.
And that’s a problem. Most startup companies won’t use Google Analytics as a key tool to make business decisions, nor will they ever go deeper than looking at the basic reports. They will focus on the metrics that will make them feel good, such as the increase in visitors and pageviews. These are called vanity metrics, and they’re totally worthless at helping make decisions.
Without knowing exactly what to look for, you might look at the data and take it as it is, but in reality, most of it is lying straight up to your face. Because when it comes to web analytics, it’s not just about knowing your number of visitors, valuable traffic sources and conversion rates, what is important is how you interpret that data.
While working with startups for years, I have rarely seen a company with a clear and well-defined measurement plan for their analytics. It’s sad, because they’re missing out and they’re skipping all the first steps to success.
The real questions is, how can YOU improve your business with Google Analytics?
Planning is Key
Before doing anything within Google Analytics, you have to create a plan. You can’t start setting up goals and custom reports if you don’t exactly know what you need to measure – just like you wouldn’t take a taxi without knowing where you want to go; therefore, this step is vital to the whole process. This is what will establish the framework that will empower you to use analytics for business decisions.
It’s important to reverse engineer the company’s objectives to determine what metrics to use to measure success. It’s a straightforward process, but it can’t be skipped and will require some thinking.
1. What is the main goal of your company? Its unique value proposition?
Here you’re not trying to figure out what is the main goal you want to accomplish through the website; think bigger: what problem is the company solving, and how is it aiming to solve it? This is startup 101 and should be fairly easy to answer.
Example: Help people easily book plane tickets through an innovative website while cultivating their love for travel.
2. Keep drilling down. What are the goals that will help you achieve that ultimate objective?
Try to write down a list of at least 2 to 3 secondary objectives. Secondary objectives are like strategies; what are the key elements in your business that are needed to support your main objective? How are you going to achieve it? At this level, the objectives shouldn’t be website specific, keep them reasonably broad. Good examples would be, to generate leads, to sell products, to gain industry recognition, to engage users, and so on.
Remember, these are your secondary objectives, without them, you cannot achieve your main value proposition – which is the company’s ultimate goal.
3. Determine the Goals Specific to Your Website
Why does your website exist? What is its purpose? The next step is to keep drilling down even further and to split your secondary objectives into website goals. They’re the tactics that you will employ.
If you’re an agency and one of your secondary objective is to generate leads, your website goal could be to capture email addresses or contact information of prospects. If you need to educate your leads on what you’re selling, maybe you need to drive blog engagement.
Your website goals are what links your web presence to your company’s objectives.
When setting your website goals, be careful not to go too specific on how the users accomplish a goal. For example, do not define “Visitor gets in touch through contact form on X page” as a goal. This will be part of it, but your primary website goal in this case is to generate leads.
Need some ideas? Here are a few more examples of website goals:
- For Branding/Gain Industry Recognition:
Website Goals: Raise Awareness, Increase Loyalty, Drive Blog Engagement
- Blog, news site, content publisher
Website Goals: Increase Blog Engagement, Improve Frequency
Website Goal: Sell a product
- Lead Generation (for services, saas)
Website Goal: Collect contact information
4. Setting your KPIs
If you set goals, you need to know how to measure them. Google analytics will give you metrics, but you have to understand which metric to look at, and why. For example, how do you connect your bounce rate to your business goals? How is that metric important to your company as a whole? That’s what KPIs (Key Performance Indicators) are for; they are the middleman between numbers you get in Google Analytics, and your business objectives.
The number of social shares, the downloads you get for your ebook, the conversion rate for your newsletter subscription form, and the number of pages a visitor visited before a conversion are all valid KPIs. But careful, don’t just pick anything to be your KPI; they must always be related to your business’ objectives.
So how do you determine your KPIs?
With the framework that we’ve already started to establish, you should have clearly defined your business objectives and how they are tied to your website. In this case, let’s have a closer look to your website goals.
If you’re an e-commerce site and want to increase your sales by 10% by the next quarter. Think, how are you going to track and measure all the individual goals that will lead to that?
Here are a few ideas:
- Your sales conversion rate (the number of visitors that makes a purchase, shown as a percentage)
- Your cart abandonment rate (number of visitors that starts the checkout process but leaves without completing the transaction, shown as a percentage)
- Average order value (increasing your average order value is always a good way to get more revenue)
- New customers orders vs returning customers orders (gives good insight on which group is the most profitable, which will help direct your marketing efforts)
Makes sense? Now take some time to determine what your KPIs are. The more granular they are, the more powerful they will be when combined with Google Analytics, so don’t rush it! Make sure they are all closely related to your goals.
Once KPIs are set, most can be tracked through data found in the various reports offered in Google Analytics, but be aware that goals as not necessarily tracked automatically by the tool. For e-commerce environments, e-commerce tracking has to be enabled and the code must be properly set up. If you want to calculate the conversion rate of a newsletter signup form or to track how many visitors spend X amount of time on the site, you will have to configure that as goals. You can read more on goals and e-commerce tracking in the Google Analytics help section.
5. Set targets
Great! Now you have most of the planning done. You know your objectives, how they convert into goals on your website, and with KPIs you know what to look for in Google Analytics. But don’t stop there. Without going through the whole planning framework, all this is almost useless.
The next step is to determine and set targets, and it’s one of the most critical stage of the process. Targets are what will make you determine what is a success, and what is a failure. For example, how do you know if getting 10,000 hits this month on a certain product page is good? Targets will tell you.
Setting targets is nothing extensively complicated, after all we do it in our daily lives. If you are training for a marathon and set yourself a target to complete it in 4:12, but end up doing 4:09, you know you’ve succeeded, and you also know that a performance over your target time would have been a failure.
In the case of your website, your target should be of a numerical value. For example, if your KPI is “number of signups”, your target could be 100/month. Or if your KPI is “average order value”, the target could be $30. By having a fixed target you know exactly what you want to achieve, instead of just having a vague, approximate idea.
6. Segment your data
Only analyzing aggregate data and overview reports is one of the biggest mistakes people do in Google Analytics. Looking at your total number of sales, visits, and overall conversion rate is exciting, but there is little to no use for them if you want to make data-driven improvements such as optimizing your online advertising investments.
How do you know which acquisition channel is best for your business? Which marketing activity is worth the spending to get more sales? In which city should the company expand? These are all questions that can’t be answered by looking aggregate data, but by digging deeper through segmentation you will find the right answers.
Now, how do you decide how to segment your data? The key here is to look at your goals, KPIs and targets. What specific subset of data do you need to track to have clear insights? More specifically, what type of behavior, which attributes, or source of traffic do you need to focus on? Go as granular as possible, you want to make your reports as clear and precise as possible.
Finally, when you have identified your segments, you can go ahead and create them using the segment builder.
For advanced reading on segmentation, I highly recommend reading this piece by analytics mastermind Avinash Kaushik, who is also the inspiration behind this post.
There you go, you have it. The planning framework for Google Analytics that will enable you to unleash it’s true potential. If you keep following this framework religiously, it has the power to completely transform your business. You will be able to gain more insights on what marketing channel works and what doesn’t, where to focus your acquisition efforts, where your users might have problems, and much more.
If your final plan should look something like this chart made by Avinash, reward yourself, you’ve got it down:
Sidenote: I am personally using a slightly modified version of this chart for all the websites I manage. You can download it by clicking on the banner below this post.
For years we’ve had the power of Google Analytics available to us for free. Most of us have it installed, but very few use it as intended. Some have discovered how to use the advanced reports, but without the planning a good chunk of gold goes away. Plan, implement, measure, maintain and refine. Always.
Do you already have a plan? What is the most important thing that you have learned about your business through Google Analytics? Let me know in the comments below.