What web metrics can do for you

As dot com mania has given way to real people running real businesses online, analytics systems have assumed a new importance. They're no longer just something nice to have and display in the boardroom at meetings - they're essential tools that measure and manage businesses. The biggest pothole in this cyber highway, is to make sure that the metrics you use are necessary and useful. There are a dozen software metrics programs on the market. It's not so much what you have, but what you can do with it.

Analysis for analysis sake is a waste of time. Every business is different and the objectives for your website will be different. Your target audience will be different and their needs will be specific to that group.

A one size fits all is not possible in web metrics. Knowing what you want to achieve, who your visitors are likely to be and what their objectives are, will lead you in the right direction. Another tripwire is looking back and not forward. Yes, you only have yesterday's stats to measure, but the point of the exercise is to be able to predict trends into the future. Learning about visitor behaviour on the site can lead you to accurate predictions for future behaviour. One of the most important visitor actions you can measure is Recency. This is how long it has been since a visitor came to your site and took a particular action. If you want to learn about your visitors, finding out why they came and what they did on the site and most importantly - how often do they do it - will give you a whole new viewpoint on your website and what it can do for you.

If you had to pick just one variable to predict the likelihood of a customer repeating an action, Recency, or the number of days that have gone by since a customer completed an action (purchase, log-in, download, etc.) is the most powerful predictor of the customer repeating that action. For instance, a website selling a CD put out a massive ad campaign and drove over 100 000 visitors to their website over the holiday period. Tracking unique visitors and page views will only tell you a certain amount. Tracking click streams and actions taken on the site tells you, through actual behaviour, where they went and what they did on the site.

Now if you add Recency, and track their return visits 30 and 60 days after the promotion, you will know how often these visitors came back and took another action on the site. And that will give you the ability to predict their behaviour in the future.

Recency is the number one most powerful predictor of future behaviour. Customers who are more Recent have a higher potential value to your business than customers who are less Recent, for any given activity.

Why does all this matter? Because it has been shown over and over that past consumer behaviour is the best predictor of future behaviour. Past behaviour is a much better predictor of future behaviour than demographics ever will be.

Which would you rather know?