orchid.thumbnail Numerous studies have pointed out that while almost all Fortune 500 companies have great investments in "Web Analytics" they still struggle to make any meaningful business decisions. Most people complain that there are tera bytes of data and giga bytes of reports and mega bytes of Excel and PowerPoint files. Yet no actionable insights, no innate awareness of what is really going on through the clutter of site clickstream data.

Through my humble experience in this field I have developed a rule to fix this problem and achieve Magnificent Success. I call it the 10 / 90 rule. Here it what it says……..

  • Our Goal: Highest value from Web Analytics implementation.
  • Cost of analytics tool & vendor professional services: $ 10.
  • Required investment in "intelligent resources/analysts": $ 90.
  • Bottom-line for Magnificent Success: Its the people.

The rule works quite simply. If you are paying your web analytics vendor (Omniture, WebTrends, ClickTracks, CoreMetrics, HBX, etc) $25,000 for a annual contract you need to invest $225,000 in people to extract value from that data. If you are actually paying Omniture, WebTrends, HBX etc $225,000 each year then…. well you can do the math.

Most people reading this post probably think this is way overblown or silly or just plain stupid. I can understand that. Here are some of the reasons I have come to formulate this rule:

  1. If your website has more than 100 pages and you get more than 10k visitors a month you can imagine the complexity of the interactions that are happening with your website. Drop in marketing campaigns, a dynamic site, SEM, more pages, more traffic, promotions and offers and you have a very tough situation to understand.
  2. Most web analytics tools will spew out data like there is no tomorrow. We seem to be a rat race, one vendor says I can do 100 reports, the next says 250 and the one after that says I can measure the eye color of people who look at your web pages and on an on. Bottom line is that it will take a lot of intelligence to figure out what is real in all this data and what is fake and what, if anything in the canned reports, is meaningful in all this.
  3. It is a given that if you open most web analytics tools that they show the exact same metrics, almost all of them measured and computed differently! You are going to have to sort this out.
  4. Finally actionable Web Insights (or as I have now copywrited: KIA's, key insights analysis) does not come simply from ClickStream, you are going to have to have people who are smart and have business acumen who can tie clickstream behavior to other sources of data / information / company happenings.

A part time person, or your admin, providing access to your favourite expensive analytics tool can't help your management make actionable decisions.

So if you think your company is not following the 10 / 90 Rule then here is my humble recommendation for you to consider:

  1. Apply for a free Google Analytics account at GA Sign Up Page
  2. Once you get the code implement Google Analytics on your website in parallel with your favorite expensive analytics tool
  3. Get a comfort level for delta between the two sets of key numbers (you know visitors, conversions, page views etc etc) and create a multiplier (my tool shows visitors 10% higher and page views 10% lower than Google). You will use this multiplier in future to compare year over year trends if you want to.
  4. Cancel the contract with your favorite expensive analytics vendor and take that $50k or $100k or $200k and: 1) Hire a smart analyst for between $50k to whatever maybe your areas great salary 2) Put the rest of the money in your pocket.
  5. Your smart analyst will be able to extract just as much value from GA than your old tool, in fact my prediction is that it will be a lot more.
  6. As the level of savvy in your org grows, as the level of sophistication of supporting processes increased, perhaps in two years you might be ready to plunk down $200k on a web analytics tool and then be ready to extract a corresponding amount of value from it.

The cool thing about the recommendation above is that even if you get to Step 3 you can walk away, no harm no fuss and you would have learned something. But I hope that you will go through all the steps and provide folks like me with employment and add strategic value to your companies by providing actionable insights rather than reports.

Agree? Disagree? Feel like I am posting from la la land? Please share your feedback via comments.

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