Drafting an E-Metrics List

As usual, it’s the readers of this column who provide me with the best fodder for further discussion, as we saw last week with the “discovery” of a great white paper from Jim Sterne and Matt Cutler. The intelligent response to that column was plentiful. And it’s worth sharing here with those of you who want to think more deeply about the issue of which analytics make sense in your particular situation.

Michael Wexler, director of research at e-Dialog, wrote with his positive reaction to the paper but added this as further food for thought:

They [the authors] don’t really give guidelines for what is “good” in a metric and leave out issues of change ([such as,] Should this metric change quickly or creep over time? Should I keep it high? What are my levers to change this situation)?

I liked the e-metrics white paper for its thorough discussion of how various sorts of metrics are thought through and constructed, and I assumed that people would adapt the modeled thought process to devise the specific metrics that make the most sense for their own business issues. Nonetheless, as Michael made me realize, I’d made an assumption that the reader will take the time to customize the information offered. He went on to say this:

But if one uses a lens and looks for the logic behind their metrics to understand what things are important to your specific business and how the change in metrics happens for your business, then it will be very useful and is certainly more useful than most of the fluff (or books!) available out there today.

Another thoughtful reader, Elisabeth Decitre of Internet Quest, writes that she was already a fan of the Sterne and Cutler work and that her own research into that effort had caused her to reach a conclusion similar to Michael’s: Ideally, each marketer would define specific business objectives, then tailor a set of indicators to measure those areas of focus.

She goes on to suggest a “draft” or proposed starting point for marketers who might be grappling with metrics to pay attention to. Though her orientation is for a business-to-consumer (B2C) e-commerce site, her list will serve as a great beginning point for a much broader set of marketers’ needs. In fact I can think of few businesses that would not want to start their analytics process with at least some of her suggested measures.

I’d like to propose her list as a baseline for a more complete list I’ll build with input from more readers over the weeks to come:

Evolution of the customer base

• Growth in visitors to Web site
• Visitor churn rate
• Visualization technique: the customer life-cycle funnel
• Growth in number of customers
• Customer churn rate

Evolution of visitor behavior

• Visit depth: growth in pages viewed per visitor
• Growth in purchases per visit per customer
• Growth in total revenue of purchases per visit
• Proportion of abandoned carts
• Evolution of customer lifetime value

Participation in loyalty-related activities

• Percentage of customers participating in a customer-loyalty program
• Percentage of customers participating in referral programs
• Response rates to online surveys
• Response rates to direct marketing offers
• Growth rate of the personalization index

I have my own favorites that I’d add to the list: pattern of page visitation and how it differs by market segment (browsers, shoppers, return customers, etc.), frequency of visits, length of time of visit, behavior variations among subsets of customers (do big spenders use the site in a way that’s different from those who spend less or visit less often?), and so on.

Of course there are lots more, some with general usefulness to lots of businesses, others that make sense in very specialized instances.

I’d love to hear your favorites and how you’ve put those measurements to work to improve business. But, Elisabeth, I think you are off to a great start and appreciate your sharing the list with other ClickZ readers.

Thanks to everyone for making this such an interactive column. Keep those emails coming! (And when you do, just let me know whether you want to remain anonymous, or want your name broadcast to the whole wide world.)