Many site small business owners’ eyes glaze over when people start talking about analytics, click through rates, and abandonment funnels. Really, there’s a lot of jargon that goes with measuring a site with analytics.

Small business owners should be paying attention to their site analytics because the data provides useful insights into their site traffic, which ultimately leads to more sales. If you’re not paying attention to your site analytics, your business is leaving money on the table.

The problem with most analytic packages is that they’re large and confusing, providing tons of data without much instruction. Fortunately, there are only a few really important metrics that small businesses owners should track to get the best results. It’s like the 80/20 principle: these are the 20 percent of metrics that provide 80 percent of the most value to small business owners.

The Tools

First off, you’ll need to install tracking software. It’s usually only a matter of installing a bit of javascript in the footer of your site’s design. If you don’t know how to do it, your designer should be able to very quickly.

There are tons of stat programs out there, but Google Analytics gives me almost everything that I need to track. It’s robust and free, so it’s the perfect analytics program for small businesses.

Setting Up Goals

After you’ve set up Google Analytics on your site, you’ll also need to set up a few goals. Goals are the foundation for most of the metrics you’ll track. You can define goals for when a visitor completes a sale, or signs up for your newsletter, or anything else. (Here are some great examples of goals you can create.)

So for now, start tracking your single most important goal, like completed sales or newsletter subscriptions. Once you get the hang of how Analytics works, you can add other important goals. (Here’s how to set up a goal in Analytics.)

The Metrics You Need to Track

Now that you’ve got your goal set up, you’ll start gathering data on your site. Here are the most important metrics that you’ll want to track for your small business website:

1. Conversions

Conversions are the biggest thing that you’ll want to track. Conversions are the number of sales divided by the number of visitors that come to your site. Many site owners are clueless as to their site conversion rates, and if you don’t know this basic bit of information, you won’t have a baseline to improve your site with.

Goal conversions allow you to effectively see lots of great things such as  what page on your site makes the most sales, the referring site that led to the sale (ie. Google, Twitter, etc.) and where people leave the “sales funnel” and stop the purchasing process (more on that later).

These are important insights for your site. If you can improve your conversion rate, you can make more sales, which is the reason you have a website for you business in the first place, right?

2. Referrers

A referrer is simply who’s sending traffic to your site. Is it Twitter? Is it advertising? Is it some other website? Knowing your traffic referrers also allows you to see if you’re getting an outside spike of traffic from an unexpected source.

Knowing the main source of your site’s traffic allows you to focus your energies on different content strategies to attract the right type of traffic.

Another great feature of tracking your referrers is the ability to gauge of the effectiveness of advertising. If you’re spending money on advertising on another site, you can see if it’s actually sending any traffic or converting sales (with your above goals).

3. Bounce rate

Bounce rates show the percentage of people who leave your site by only visiting a single web page. High bounce rates mean something is wrong with your site, and steps should be taken to fix it. It could be that visitors aren’t getting engaged, or your design might be too cluttered and confusing. Bounce rates are a great indicator of the effectiveness of your site.

Here’s a guide on how to improve website bounce rates.

4. Goal path and goal abandonment funnel

The Reverse Goal Path is a way to see the path that your visitor took to complete a goal. This gives information on the pages that generate the most sales.

Similarly, the Goal Abandonment Funnel shows where the user left the “funnel” in a started goal. This metric allows you to see which pages gave the user reason to not finish the goal, like make a sale.

Both these metrics are very useful for getting an idea of what motivates and repels your visitors when they’re at your site.

5. Search keywords

Search keywords are the keywords that search engines refer to your site. Search engine visitors are some of the most motivated traffic, as they’re looking for very specific things. This means they’re typically more likely to buy things than the average visitor. Knowing what keywords send your site traffic allow you to:  a) figure out what you rank for those keywords and b) determine SEO and other marketing steps to improve those rankings.

Other Tools to Use

Quantcast – A tool that shows site demographics and other visitor data

Google Website Optimizer – Perform A/B or multi-variate testing to optimize areas of your website for visitors

Crazy Egg – Give heatmap data, showing where visitors click on your site and other interesting data.

Source: Open Forum