Many startups use technology to improve an existing product or service or to design and build something new. More than ever, startups are capitalising on the benefits of big data and analytics to determine how to reach more customers faster. The Lean Startup methodology, coined by Eric Ries in 2011, is founded on a principle of building something quickly, measuring its effectiveness, learning something along the process and iterating through a feedback cycle. This methodology aims to develop what is called a minimum viable product (MVP) to commence the learning process as quickly as possible, then measuring and refining the product as it gains traction (also known as the feedback loop).
Online-based startups have an advantage of being geared to accelerate the feedback loop through big data and measurable analytics. Optimising an online presence not only improves the performance of conversion rates but also provides a new lead generation channel for new customers. Google Analytics can play a fundamental role in understanding customers better and making sense of buying behaviours. Approximately 52% of all websites use Google Analytics, and it accounts for 81% of the traffic analysis tools market.
In short, using Google Analytics can assist any startup or online business with:
- Better understanding customers and their browsing experience;
- Identifying where your visitors are coming from and how to increase traffic; and
- Responding to how visitors interact and improving conversion rates.
However, it’s easy to fall into the trap of using Google Analytics to focus on vanity metrics rather than actionable and engagement metrics. Vanity metrics concentrate on making the business look good (such as an increase in page views, registered users and site visitors), but have no action points and no effect on your bottom line. As a startup founder, how you interpret the data is much more relevant. This article sets out how startups with websites can use the free data tracking platform to refine their online presence and improve business processes.
1. Understand Your Audience
Google Analytics provides a wealth of valuable and powerful data that can be analysed and actioned upon to improve the customer experience. The data you collect about your audience can reveal the type of demographic as well as how frequently they come to your website and what they spend their time doing.
Key metrics for audience include:
- Users: Users include both new and returning users. This metric can be broken further down into demographics (age and gender), interests and geography. Understanding the types of users on your website can assist with designing your site’s user experience. For example, a younger audience can suggest an audience that is more likely to use smartphones and so, the website should also be mobile friendly. By filtering your audience by age, gender, language and location, you can identify how to target around these metrics.
- New vs. Returning: This metric is an estimate of the percentage of first-time visits. A website with a high proportion of returning sessions could suggest the website has content that is valuable and users are loyal. Including a membership option to register can provide you with more opportunities to interact with users who remain on the site for longer.
- Sessions: A session is the period a website user actively engages with the site, app, etc. For example, one screen view is considered a session. Combined with total traffic, the number of sessions could indicate a user’s behaviour on the site before they commit to a sale. For an e-commerce site, a user could be clicking around on different parts of the website to compare their options. The design of the website can then be optimised, so the user spends more time on the website reading about the product or service.
- Examine your audience engagement metrics rather than vanity metrics to assess your real performance – for example, your conversion rate, content shares and number of article comments.
- Establish cohorts or segments – your business is likely to have different types of customers. As such, each group is likely to behave differently. Separating customers into groups as cohorts can better aid in identifying trends in the data
- Assign a monetary value to conversions – setting up goals in Google Analytics allows you to estimate the worth of a lead and the channels they are coming from. A Facebook remarketing channel may be more expensive than an email drip campaign – you can action decisions based on actual lead conversions rather than guess work.
2. Identify Acquisition Channels
Acquisition channels examine how visitors have reached your sites, such as search engines or a referring website. Understanding the acquisition funnel of your website will assist you to identify where your most qualified traffic comes from.
Key metrics for acquisition include:
- Channels: A channel is a method in which a visitor was acquired. A direct channel is where a visitor typed your site’s address into a web address bar. A social channel is a link on a social media network. An organic channel is where the visitor found your website by typing keywords into a search engine and clicked on a link that the business didn’t pay to have featured on the search engine results page. You can use channel analysis to determine the best sources of traffic to promote your website further. Viewing All Traffic sheds light on all sources of incoming traffic, including website source and website medium.
- Keywords: Understanding the keywords that visitors search to end up on your website will better assist you to produce content or target particular keywords. Google divides keywords into paid and organic. You can optimise organic keywords for search engines through SEO and measure paid keywords by click-through rates and conversion rates. To measure the performance of organic keywords, use Google Webmaster Tools to see clicks and impressions.
- Determine your business’ goals. If your commercial goal is to generate leads and sell a product, use this to guide what acquisition channels to prioritise.
- Examine what the website sessions are showing. Is website traffic consistent and increasing over time? Are visitors split between new and returning? Are you attracting new visitors to your website? New sessions are the number of visitors accessing your website for the first time. A high percentage of new sessions may indicate that marketing campaigns are working effectively to draw in new visitors.
3. Respond to Behaviour
Tracking behaviour on your website can be used to optimise the website visitor’s user experience and increase conversion rates. This data can reveal how website visitors are consuming and interacting with the website. Beyond data about how many visitors access the site, you can view detailed demographic data and measure the behaviour of a particular demographic against typical visitors.
Key metrics for audience include:
- Behaviour Flow: This visual medium provides an overview of how users are interacting with your site and what pages they visit after their first page, and where they drop off. Beyond viewing the path of users, you can also segment your visitors and use the heatmap to identify where your visitors click.
- Site Content: This category contains detailed interaction data on all pages and the behaviour of visitors as they enter and leave the site.
- Average Session Duration: This metric shows the average amount of time visitors spend on the website per visit. While a high number may indicate that there is content worth reading on the website, it may also be mean they cannot easily locate what they are looking for. Analyse this metric to identify what the number represents.
- What is the purpose of your website – to raise awareness, to sell a product or to collect contact information? Link your website’s goal to your company objective and use this information to guide behaviour for your website visitors.
- Where are your visitors navigating to? Click on Behaviour > Behaviour Flow to view a map of where your visitors are clicking. This feature will display how and why your visitors are using the site.
- Set up Google Analytics Behaviour Reports. These reports allow webmasters to isolate keywords, pages and sources to perform the analysis.
Notably, it is also important to consider conversion metrics, which tracks the effectiveness of a website in persuading visitors to take a desirable action, such as filling out a form or completing a purchase online. While this article does not unpack conversion metrics, it is nonetheless important to include in measuring your website’s overall business performance.
A Case Study Example
In this section, we will look at an example of a website that has had Google Analytics installed and identify potential red flags for webmasters and startup founders.
This website has experienced growth in its sessions, users and page views. This diagram depicts that while sessions and users have been growing 25-30%, page views have only increased 10%. This suggests more visitors are accessing the site. However, pages per session are not increasing at the same rate, also reflected in the Pages/Session metric decreasing 11%. This may indicate that there is less new content on the website or users are not browsing around the website as much as its previous period.
Average session duration has also dropped 12% and the website bounce rate has increased 14%. These metrics further support the drop in sessions is a result of users not having new content to access and consequently spending less time on the site. If the site has undergone any significant design changes, it may impact site navigation. Webmasters and startup founders should only use these metrics as a high-level overview. Delving into the causes and trends behind the changes is pivotal to ensure changes in visitor behaviour is not affecting the bottom-line.
A Note on Privacy
In Australia, the Australian Privacy Principles (APPs) may apply to your business. While small businesses with less than $3 million in annual turnover may be exempt from the APPs, it is best to check whether your business must adhere to the laws. The APPs may affect:
- How your business collects, uses, discloses and handles personal information;
- Whether your business can use personal information for direct marketing; and
- How your business can store personal information, including when sent overseas.
Google Analytics is a valuable tool for measuring website traffic and website performance. While it is a powerful platform that takes out the guesswork in how implemented changes affect your visitors, Google Analytics is only one source of data in measuring success. As mentioned earlier, do not fall into the trap of benchmarking vanity metrics as they do not truly reflect the growth of your website. You should also tap into engagement throughout the customer funnel, including offline contact (such as phone calls). What are your thoughts on using analytics for startups? Let us know on Twitter.