What specific metrics should I collect as I'm monitoring an early stage web startup?
I'm looking to measure performance of a web-service, and collect meaningful information. What metrics should I be looking for, in order to measure how well the startup is doing?
What have you used in the past for your startups?
2 Answers
Some important things to pay attention to are number of unique visits, how many of those visits are converted into sales, how visitors return to the site, and what the bounce rate is on each specific page. That last one can alert you of where potential customers get "turned off" of your product.
One of the long time players in this field is Google Analytics which allows you to set goals and track conversions. For me, Google Analytics does what I need.
Another popular tool is MixPanel and is used by a lot of startups. It has a free plan, as well as premium plans for users requiring more services. I've personally never really used it so I can't comment on it.
The most important metric to collect is conversion rate. The first thing you should be doing is to create a list of outcomes you want when people visit your website. These always begin with a verb and include things such as "Add to shopping cart," "Create an account," "Download an ebook," "Subscribe to updates," "Follow on Twitter," etc...
After you decide what your top 3 - 5 outcomes are, use the Goals feature in Google Analytics to measure your conversion rates. This will give you the best indication of how well your website is doing against your goals.
The other measurements (visitors, referral sources, bounce rate) are useful diagnostic tools but aren't a measure of how well your website is performing its mission. For example, you could have a million visitors per day but if your conversion rate is 0%, you're not doing very well. Conversely, what if your bounce rate is really high, but your conversions are at 20%? I'd take that.
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I think a lot of early stage founders would love to know of what is considered a good conversion rate for say visits to registrations and regi users to paying customers. Got any numbers to share? From what I gather the common conversion to paying customers is somewhere in the 2-8% range, 5% being an average. Of course it will vary based on many factors, but it would be nice to have a guideline for those still figuring out their price strategy. – Webbie 12 years ago
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Regi - 3% (free content available to visitors), Subscribers (trials with CC) - 13% – Webbie 12 years ago
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As you say, there are some very important variables that will determine this. I have one client who is maintaining a 40% visitor-to-lead conversion rate on one landing page. But this is because it's a pretty narrow niche and the traffic being driven to that page is somewhat pre qualified. The visitor-to-lead conversion is highly dependent on the tactics used to drive visitors. For less targeted approaches, 5% is indeed a decent number. The lead to conversion rate is also highly variable depending upon the audience and lead nurturing techniques. I've seen those rates anywhere between 2% and 50% – Jon Di Pietro 12 years ago
