Review: Web Metrics

by Dr. Ralph F. Wilson
Web Commerce Today, Issue 62, September 15, 2002

Web Metrics: Proven Methods for Measuring Web Site Success
by Jim Sterne
John Wiley & Sons, 2002
Paperback, 430 pages
ISBN 0-471-22072-8
List US $30.00, Amazon USA $21.00

With our online businesses we're awash in a sea of data, but gasping for information. With the Web you can measure so much. What is important? What moves you forward?

Web Metrics by Jim Sterne takes a very business-practical (as opposed to technical) view of website measurements. Stern says:

"Tracking how much stuff you sell isn't the issue -- you do that as a matter of course. The question is: What should you measure in order to sell more stuff?"

The book is aimed primarily at managers, directors, and VPs of e-business and e-marketing in large companies. It examines the many types of measurements that can be done on websites and helps you sort out what is worth spending time and money on vs. what is only of mild interest in furthering your business. Topics include:

Funding web metrics Web measurement standards Log files Generating traffic Measuring advertising effectiveness

Website speed Evaluating content Usability and navigation Conversion rates Personalization Customer Service

The book concludes with case studies -- one of Compaq that is doing many things right, and an unnamed company that is failing woefully. A final chapter pulls it all together.

I'm fascinated with his chapter on "Calculating Conversion." Sterne observes that customers pass through three transaction phases on a website: (1) information phase, (2) agreement phase, and (3) settlement phase. Helpful graphics illustrate the differently shaped "customer life cycle funnels" depending upon the degree of targeting, persuasion, and conversion. Then he presents metrics which he developed with Matt Cutler of NetGenesis.

• First purchase momentum = the required clicks to first purchase divided by the actual clicks to first purchase.
• Deactivation threshold = recency divided by average user loyalty (length of time)

He and Cutler examine shopping cart abandonment by looking at metrics on:

• The ratio of abandoned carts to completed purchases per day
• The number of items per abandoned cart vs. completed transactions
• The profile of items abandoned vs. purchased
• The profile of a shopper vs. a buyer

(Some of Sterne's and Cutler's research is found in an online white paper "E-Metrics: Business Metrics for a New Economy", NetGenesis, 2000, 67 pages, PDF format http://www.targeting.com/emetrics.pdf )

Jim Sterne

The chapter goes on and on with fascinating observations about online shopper behavior and how to measure and mold it. If you've already tried everything to take your conversion rate to the next level, this chapter is worth the price of the book in fertile ideas to pursue. I know I'm going back to school on some of these approaches to website sales conversion.

Jim Sterne projects a dry wit that increases readability and he is not afraid to tell it as he sees it. While he writes for Internet marketing leaders in large companies, smaller companies can learn a lot here too. Sterne is an Internet consultant, writer, and speaker who is very much in touch with the present state of online business. I make it a point to read whatever he writes.

You may purchase this book from Amazon at a discount using the following links:
US: http://amazon.com/exec/obidos/ASIN/0471220728/ref=nosim/wilsoninternetse
CA: http://www.amazon.ca/exec/obidos/ASIN/0471220728/wilsonweb-20
UK: http://amazon.co.uk/exec/obidos/ASIN/0471220728/732
DE: http://amazon.de/exec/obidos/ASIN/0471220728/wilsonweb
FR: http://amazon.fr/exec/obidos/ASIN/0471220728/wilsoninternet
JP: http://amazon.co.jp/exec/obidos/ASIN/0471220728/

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Web Commerce Today, Issue 62, September 15, 2002