Articles in the Advanced Analytics Techniques Category

February 15 2008

Goal Values can increase the Value of your Goals

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Google Analytics uses the Goal Value of each Conversion Goal to calculate the Return on Investment (ROI) metric, as well as other currency-oriented figures that you see almost every day. Often, the Goal Value – which is optional – is left blank, leaving over 40 different reports in GA without this very important piece of the puzzle.

The most common reason I hear regarding why this is done is “…because I am not an Ecommerce website, so my Goals don’t have a monetary value…”. In my opinion, this is exactly when you need to insert a Goal Value, so that you can attach some kind of Dollar, Euro, or other currency to the actions that you want your website’s visitors to take. For profiles in Google Analytics that have Ecommerce enabled, the Goal Value is automatically populated into the reports (if that Goal is where the Ecommerce code happens to be processed). For any non-Ecommerce goals, you’re going to have to enter the value in yourself.

“…but how do I know what my Goals are worth? How do I calculate my Goal Value?”
There are a few different ways that you can determine your Goal Value. First, there’s the common approach taken by most people with non-Ecommerce goals. For example, let’s say that you have an inquiry form on your website, and the “Thank You” page of that inquiry form is a non-Ecommerce goal. These leads get sent to your sales team, and your sales team can close 10% of those leads. Let’s also say that the average sale amount for each closed lead is $2,000. You can take $200 (10% of $2,000), and use that as your Goal Value (don’t worry, Google Analytics will do all of the math for you in its reports).

Another way that I’ve seen Goal Value being used is by taking the amount given to a customer on a coupon or promotion code. If you have a “Print this $50 off Coupon” page as Goal, you can use $50 as your Goal Value. You would just need to constantly remind yourself of how you came about using $50 as your Goal Value when looking at reports, so that ROI and Margin figures don’t appear to be ridiculously low (or high) for you.

Finally, you can even make up a number! Does $25 sound good to you? How about $82.15? Perhaps $150,000 works for you? If your website or your online business structure / purpose doesn’t allow the flexibility of calculating a monetary value for a Conversion Goal, then you can just make up your own, so that you can get the most comprehensive set of data to look at and analyze.

Knowing how valuable your Goals are can let you know where you stand, and whether or not they are performing well or worth your efforts. Honestly, it doesn’t matter whether your Goal Value was invented out of thin air, or if it was precisely calculated – as long as you have a number in there, you can begin to evaluate your Goals with a greater level of intelligence than you could before.

February 8 2008

The “Hotel Problem” – Revisited

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One of the things that I always find that people have difficulties with when starting off on their Web Analytics journey is when they discover what’s known as “The Hotel Problem”. Wikipedia’s has a good explanation about it, and also notes its origins.

The Problem:
Unique Visitors for each day in a period of time DO NOT add up to the same total as Unique Visitors for that entire period of time.

Let’s say you kept a daily track of all of the Unique Visitors to your website for every day of this week. Here’s what that would look like:

Sunday: 5 Unique Visitors
Monday: 10 Unique Visitors
Tuesday: 5 Unique Visitors
Wednesday: 10 Unique Visitors
Thursday: 5 Unique Visitors
Friday: 10 Unique Visitors
Saturday: 15 Unique Visitors

So, that’s 5+10+5+10+5+10+15 = 60 Unique Visitors (Don’t be afraid to double-check that math, lol :))

But then let’s say that you go back in your Web Analytics program and look at the Unique Visitors for that same week that you kept track of (So, instead of looking at Unique Visitors only by that single day, you’re now looking at Unique Visitors by that whole entire week). Chances are extremely high that you will see something like this:

Unique Visitors: 37

Common Reactions:
– “Huh???”
– “Which number is correct?”
– “My Web Analytics system must be broken…”

The Solution:
None.

Explanation:
Most every Web Analytics program tabulates statistics based upon your date-range. Even though you added up 60 Unique Visitors to your website manually, your Web Analytics system won’t, when showing you the Unique Visitors for that entire week combined. The reason? Because during that week, you probably received repeat unique visitors to your website on separate days, and your Web Analytics program won’t show you those “repeat unique visitors” when looking at that week combined.

The best possible explanation available is thinking about it as a Hotel, hence the term “The Hotel Problem”. Let’s say that I’m a guest at your Hotel. I stay on Monday (1 Unique Visitor on Monday), I stay on Wednesday (1 Unique Visitor on Wednesday), and I also stay on Friday (1 Unique Visitor on Friday). If you add them up manually, that’s 3 Unique Visitors total…but there can only be one of me, so looking at that week as a whole, you’d only see 1 Unique Visitor total.

So, which one is “right”? They both are. But you’ll need to know why you’re looking at your Unique Visitors in the first place, and then go from there.

Again, I recommend checking out the Wikipedia Article on it, as it has a nice table that visually explains it the best.

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