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Improving Your Sense of Site

Your web analytics report is filled with clues on how to boost sales.

If he were alive today, Luca Pacioli would probably love poring over a Web analytics report. Pacioli, a Franciscan monk who published the first balance sheet in 1494, understood the power of data to transform the way companies make decisions. Today, thanks to the Internet, the amount of data available to any company with a website dwarfs anything Pacioli could have imagined. Web analytics programs track nearly everything that happens on a website, keeping a real-time record of how potential customers find the site, how they behave on it, and why (or why not) they buy stuff.

The wealth of data is so great -- you might learn, for instance, that customers in Milwaukee typically spend three minutes on your site and use Firefox -- that many entrepreneurs find it overwhelming. "If you try to look at every piece of data, you'll go crazy," says Andy Beal, an online-marketing consultant and co-author of Radically Transparent, a book on the power of new-media tools to build a brand.

To get a sense of how to use analytics to uncover your website's flaws and make more money, we asked a fast-growing start-up to let three online-marketing experts review its analytics reports. The panel included Beal; Reid Carr, CEO of Red Door Interactive, an online-marketing firm based in San Diego; and Avinash Kaushik, from Google's (NASDAQ:GOOG) analytics division.

Our guinea pig, Bonobos, is an apparel company founded a year ago by Brian Spaly and Andy Dunn, both Stanford M.B.A.'s. Based in New York City, Bonobos sells fitted men's pants that, according to Dunn, avoid "the khaki diaper butt problem." The company sells its products on its website (it has no retail distribution), and prices typically range from $110 to $190.

By September, when we looked at Bonobos' analytics data, the company had already gotten off to a fast start. The company was booking about $170,000 a month in sales. What were the keys to Bonobos' success, and how could the site be improved? Here's what the numbers told us.

1. Strong Traffic -- Thanks to PR

A look at your traffic mix can help you measure the effect of marketing activities, both online and off. Normally, the biggest chunk of a site's traffic comes from search engines, followed by roughly equal streams of traffic from referring websites and from direct traffic -- that is, people who type in a Web address. But Bonobos receives less traffic from search engines than from either referring sites or direct visitors. This happens because the company invests heavily in public relations. Look at the site's daily visits: On August 11, Bonobos was mentioned in The New York Post, and the site logged 2,238 visitors, up from 652 the day before. A similar jump occurred on August 26, when Bonobos was on local TV.

These spikes are nice, but PR can be fleeting and does not always result in long-term traffic. And if you look at Bonobos' daily conversion rate, the percentage of visitors who buy something, you see that on August 11, it fell to about 1.8 percent. The site may sell more even with lower conversion, but, moving forward, Bonobos should complement its PR strategy by going after more traffic from Google and Yahoo (NASDAQ:YHOO) searches, which typically converts to sales at a higher rate than referring-site traffic.

2. It Takes a Lot of Clicks to Find What You Wan

Our experts noticed the high average number of page views -- nearly eight per visit -- that Bonobos.com generates. You may think the more page views, the better. That's certainly true at big entertainment sites, such as YouTube and MySpace, where clicks directly translate into more ad revenue.

But for an online store or an informational company site, it's not that simple, says Reid Carr, whose clients include Overstock.com and Intuit (NASDAQ:INTU). Given the site's bounce rate, which shows that nearly a third of all visitors leave after only one page view, Carr expected an average number of page views of six or fewer. The fact that the average is 7.75 "suggests that people can't find what they're looking for," he says.

To figure out how to simplify and improve the site's navigation, Carr recommends that the company engage in "A/B testing," whereby it serves test pages to a sample group and tracks how they perform in comparison with the current site, to see what tweaks reduce the page-count totals.