Metrics and Testing a Website

Want some help with the technical aspects of "how to test" your website? Read on...

Of course you don't want to spend time and money building a website and not be able to measure how it is doing. It's an essential business need to test a website for ROI, or its Return on Investment.

There are many ways you can do it, but the concept is always the same. You need to measure the dollars being spent against the profit it makes, or the amount of sales generated, over a time period. It is important to know that your hard work is going to or has paid off and you are making a profit.

Some information you will need to gather includes:

Profits you made from sales, commissions, advertising, etc.

Costs for website hosting, plus

Other costs for your website, like licenses for games you host or copyrights you purchased, services like shopping carts, merchant accounts, email accounts, autoresponders, traffic statistics, etc.

Costs for advertising, which of course varies per campaign, and click throughs with PPC campaigns. Essentially, you are working with "past" data or projected data - what you spent last month, or last week, for instance. Or, you may work with a planned budget amount you expect to spend.

Development costs may or may not be included.

Your overhead may or may not be included. For instance, what you pay yourself (and employees), your PC and office costs, etc.

Usually development costs are added for a long-range ROI, like after 3 years, 5 years, etc. Your goal will be to achieve enough "profit" so that all your development costs are recovered, or cancelled out, as soon as possible.

In the corporate setting, the actual ROI becomes the time period afterwhich all costs are essentially recovered. Thus, an ROI of 3 years, means that the development and ongoing costs are recovered after 3 years time.

Usually overhead costs are NOT included at all. They are usually considered "the cost of doing business" - officially called EBIDA.

Of course your profits should cover your overhead, or it is not worthwhile to be in business. But most business start-ups will give themselves some time to become "profitable". Even retail stores will likely not be "in profit" for a time period. That is why many seek loans or supplement their businesses with outside income for a while. So you should consider keeping your job, if that is an option, while your eBiz becomes profitable.

Testing a Website

There is no point in creating a website and simply "waiting" until it turns a profit. You should be continually improving it and testing how your changes are working. To do this, you need statistics on each change.

The best way to do this is to gather the traffic and sales before and after each change you make. Significant improvements can often be seen within a day or week when your traffic level is high enough.

Within the PPC market, the vendors provide information for alternate ads so you can see if one performs greater than another. You can also "test" each heading change, each sales letter copy on your website, and each email marketing result by gathering the before and after metrics on visitors and sales. If you don't, how would you know if your changes are improvements, or not?

Metrics for a Website

Today most websites use a short time period for calculating profits, even a day can be "telling" when using PPC campaigns. You should gather statistics on the number of visitors and the number of UNIQUE visitors, and cancel out yourself and/or your own webmasters visits, of course.

Sometimes this information is clearly displayed in your hosting account's website statistics. Sometimes it is NOT.

There are MANY website hosting options. Once you select yours, you may be locked into a contract for a year or more due to the plan you selected. One reason that I recommend HostGator for web hosting is because of the great free website traffic statistics that you can see on their cPanel for your website.

If you are not satisfied with the website statistics that you have on your hosting account, (for instance, my free GoDaddy website "stats" are not very helpful), there are services you can get to give you this information.

The one I recommend is HitsLink by Net Applications. I tried several. Some are free, and slow. HitsLink displays your data quickly and gives you a 30-day free trial. If you have only one website, and agree to put a small HitsLink link on your website, you can get your statistics totally free.

I am thrilled when I get my HitsLink emails that automatically arrive when my traffic reaches my goals. Plus I can see what keywords people use to get to my web pages. Whenever I want, I check out my website traffic levels over a day, week, month, or year. This is the right tool for knowing what I want to know about my website visitors.

Try it yourself: HitsLink Traffic Stats and Site Monitoring

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