articles by xbridgers
Business Money, November 2004
Ask your marketing or e-commerce team how effective your online strategy is and they are likely to provide you with some puzzling metrics. Typically such metrics are used because the best measure - revenue generated - is either negligible or is unknown.
In the absence of revenue figures, these other metrics are typically used to justify online strategies. Below are explanations to help you demystify the terms most commonly used:
Hit: A request of a file from a web server. Each web page is comprised of an arbitrary number of files, rendering this measure of little practical use.
Click-through: The act of a user clicking a link to a website from another website. Click-through rates are used to measure the effectiveness of Web site elements such as online advertisements.
User: A person who accesses a website. This can be a confusing statistic as a user may be responsible for multiple visits to the site over a period of time.
Page view: A single web page download and viewed by a user of your website. This can be a difficult measure to measure accurately because most pages are frequently visited by search engines (whose page views should be excluded from this measure, as should your own visits).
Visit: A specific session at a website that ends when the user has taken no further action after a given period of time - usually 30 minutes, indicating that the user is no longer "at" the site. During a visit, a user may view your page more than once so the number of page views is likely to be higher than then number of visits per page.
Page views per visit: Useful for measuring how appealing your content is to users. The more pages viewed per visit, the greater the interest by users.
Unique Visitor: Individuals who have visited a Web site (or network) at least once during a fixed time frame, typically a 30 day period. This is a very difficult metric to track because two persons using the same web browser will count as one unique visitor. Conversely, one person using two different web browsers will also count as two unique visitors.
Conversion: the process whereby a visitor becomes a 'customer'. In the online realm, conversion has a myriad of meanings depending on the goals of a particular site.
Customer acquisition cost: the cost associated with acquiring a new customer.
Revenue: the only real measure of a website's success. No other measures matter.
Revenue per unique visitor: The average value of each unique visitor to your website. This is the best measure of a website's efficiency at converting each visitor into a new, revenue-generating customer. The more efficient your website, the more you can pay to bring potential customers to your website.
Surprisingly, revenue-based metrics are seldom applied to business banking online strategies. They should be. No successful strategy for business finance has ever been created without them.