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PERFORMANCE METRICS

The processes a business uses to evaluate the performance of various business practices are known as performance metrics. In the world of e-commerce, performance metrics typically have to do with Web-site performance and how users interact with Web sites. To determine how well a Web site serves customers or how quickly various pages load, most companies use tracking software. Tracking visitors without their active participation using cookies and IP addresses is known as passive tracking, while asking visitors to supply personal information via an online registration form is known as active tracking. Performance metrics at many online firms include both types of tracking.

Many analysts advise that conducting some sort of Web-tracking activity is essential to the success of online businesses. According to Netpreneur writer Melissa Campanelli, "you can't effectively maintain your site without tracking visitors. Once you know specific areas of the site most viewed by visitors and which search engines they're using to reach your site, you can modify your site's focus." Site analysis can also offer specific information about the behavior of your visitors that might prompt you to make changes to the site itself. For example, if you determine that customers tend to abandon an online purchase when asked for their home phone number, you might decide to eliminate that question from your order form. Or if tracking analysis reveals that the majority of your visitors leave a page before it finishes loading, you may decide to pare down graphics or anything else that might be slowing it down.

If you wish to conduct performance metrics on your Web site, you can pursue one of several options. If you use a Web-hosting company to maintain your site, you can check to see if it offers performance metrics services in addition to hosting. In many cases, this is an ideal choice for small businesses because it is inexpensive and eliminates the need purchase additional software or contract with a separate company. However, if your Web host doesn't offer these services, if their services are too limited, or if you simply want more control, you can purchase a Web-tracking software program. In many cases, all you need to do to run Web-tracking software is place an HMTL marker on each page of your site.

Many products are available to analyze Web traffic. In addition, many companies offer Web-tracking software and services tailored to small businesses. For example, NetIQ's WebTrends Log Analyzer is able to analyze site traffic in real time. Created for sites with a single server, Log Analyzer is designed for small online businesses with fairly simple needs. The program pulls from the server's log files information about visitor patterns, visitor paths, and basic demographic information about visitors, such as their geographic location. The software can also determine which site or keyword search led visitors to your site. The firm also offers more advanced product suites for sites using more than one server. Depending on which option you choose, you'll pay anywhere for $700 to $10,000 annually to license a high-end WebTrends product. If you would like to try the software before making a purchase decision, you can download a free trial version from NetIQ's Web site.

Another Web tracking option for small businesses is iLux Enterprise 2000, which constructs a visitor database and analyzes visitor behavior. Basic reports include content viewed, referral sources, search engine sources, visitor patterns, and visitor profiles. iLux Enterprise can also generate customized reports. Other companies, such as InfoVista, offer similar performance software tools that are relatively inexpensive. If you are most concerned about how your site performs—as opposed to what users are doing at your site, how they got there, how long they stay there, and where they go when they leave—Keynote Systems provides a service that simply tests various Web pages from a variety of locations to determine their load time and reliability. This service costs from $295 to $995 per month. Less expensive (and less comprehensive) services are also available.

Regardless of which service you use, incorporating performance metrics into your online business plan is a wise idea. According to the November 2001 InternetWeek, "There are many tools and techniques to help e-businesses better understand how visitors interact with their site, how well sites are designed to achieve business goals, and how quickly sites perform page downloads and other tasks. Experts recommend that companies keep an eye on all those things."

FURTHER READING

Blacharski, Dan. "Now Loading…. " Entrepreneur.com, April 16, 2000. Available from http://www.entrepreneur.com.

Campanelli, Melissa. "Hot on the Trail." Entrepreneur, August 1999. Available from http://www.entrepreneur.com.

——. "Tracking Visitors." Netpreneur, May 2000. Available from http://www.entrepreneur.com.

Kemp, Ted. "The Many Flavors of Web Tracking." InternetWeek, November 26, 2001.

"Tracking Tools Prove That What You Don't Know Can Hurt You." Smart Business, April 1, 2002. Available from http://www.smartbusinessmag.com.