By Marty Carroll, Director of Usability Practice
There's a question that crops up time and again whenever the
commercial benefits of website development are put under the
spotlight: how to accurately measure ROI. While many organisations
acknowledge that the Internet is a core business platform and are
investing money accordingly, even in today's sober economic
environment many do not assess the ROI of their site spend with
the same rigorous methods of analysis that are applied to other
channels. This is because until now a framework for measuring ROI
on site development has proved elusive, due mostly to the scarcity
of appropriate data.
A study by Forrester Research found that 98% of site owners use
traffic, such as hits and unique visitors, to gauge performance.
While such indicators are useful, it's impossible to draw accurate
conclusions about site performance from this data. It's like
judging the quality of a football match by the attendance figure.
There are, though, a number of tools on the market, referred to
collectively as Web analytics tools, which allow organisations to
gauge site performance on far more useful criteria, such as
purchases per customer or conversion rates. These afford a
business a valuable insight into its site's weak spots and provide
a concrete basis for improvement, Identifying which areas of the
site are performing below par is only part of the solution. Web
analytics tools may tell us what visitors are doing, but not why
they're doing it. This is where usability research comes in.
With usability research, specialist practitioners observe and
talk with participants as they try to accomplish true-to-life
tasks on a site. This allows them to form a detailed picture of
the site as experienced by the user.
Until now, businesses wanting to ensure they got the most from
Web site spend faced two main difficulties: identifying which
areas most need improvement and assessing ROI after improvement
has been carried out. Using Web analytics tools and usability
research overcomes both these hurdles, identifying a site's
weakest areas so that resources can be targeted most effectively,
then making it possible to quantify ROI. For instance, if
improvements are made to a site area with a low conversion rate,
then ROI can be calculated according to any sub-sequent increase
in that rate. Decisions on Web site spend have until now been
based more on intuitive or vague market.
Web analytics tools and usability research identify a site's
weakest areas so that resources can be targeted most effectively
research than on a patent under-standing of the ROI. With Web
analytics tools and usability research, we now have a framework
for accurately evaluating the relationship between budget spend
and commercial gain.
If you'd like to read more on this subject, please use the link
below for Marty Carroll's report:
Usability
and Web Analytics: ROI justification for an Internet strategy
(PDF, file size 264KB)
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