What if you could cut the amount of time you spend on analytics reports in half? Or even less?
I’m going to show you how to spend much less time on your reports than you do now. Here’s the best part: not only will you be spending your time more efficiently, you’ll be gaining insights that will actually help your business.
Better results with less time? That sounds like a win-win to me.
But to pull this off, we need to avoid the Google Analytics data swamp.
What’s the data swamp?
It’s the endless mangrove that attempts to drown you every time you log in and distracts you with all the data that WON’T help you grow your business. So instead of gaining insights about your customers, you end up wasting countless hours wading through the data swamp.
To save time and get better insights, all you have to do is follow these 3 steps:
- Define the metrics that matter to your business
- Force Google Analytics to track what you want
- Ignore everything else in Google Analytics
Step 1: Define the Metrics that Matter to Your Business.
Instead of focusing on metrics that Google Analytics throws at you from the start, take some time to figure out what really matters to you.
Pick metrics that instantly tell you how your business is doing. If the metric improves by 200%, you should have an impulse to grab the champagne bottle. And if it tanks, you should grab your phone to send the bat signal. With a single glance, you should be able to see how you’re progressing.
Here are some examples broken down by business model.
Trial/Free Account Sign Ups – By offering a free/trial account, you’re giving people a no-risk opportunity to try your product. The more people that try it out, the more chances you’ll have to sell. This is definitely a critical metric.
Activation – Not only do you need to get people to sign up, you need to get them to actually use your product. Each product will define activation differently. For example, Facebook defines activation as getting 10 friends. Once a new person hits that number, Facebook starts to have real value and new people stick around. Why does this matter? If people aren’t using your product, you’ll have an exceptionally hard time selling to them.
Upgrades to Paid Accounts – This is where people pay you. Since people give you money at this point, definitely track it.
Total Revenue – Yes, this is an obvious one. What isn’t obvious is how often you should check your total revenue. Unless you have a massive ecommerce site that moves product by the truckload, I would avoid checking total revenue on a daily basis. Different days of the week, random events, and promotions can inject a ton of variability into your daily numbers. One day, your revenue is up by 200%, woohoo! The next, it’s down to only 20% of normal and you turn into a grump. But when you look at the weekly or monthly totals, everything’s right on track. Watch your total revenue closely but don’t go overboard.
Average Order Value – One of the key ways you can increase your revenue is by convincing each customer to buy more merchandise with every order. You’ll grow your business without having to spend more money on marketing trying to find new customers. So use average order value to track how you’re doing. It can also be used as a red flag. If average order value starts to steadily drop month-to-month, it’s a warning sign that your business is headed for trouble.
Checkout Funnel – Customers have to go through several steps to purchase something from you. They have to go to their cart, enter checkout, fill out their contact information, give you their payment details, and confirm the purchase. Track each step so you know where people are getting stuck. Once you know where people are having trouble, you can work to make it easier to complete the process (and increase you revenue).
Leads – For many businesses, leads are the lifeblood of the sales cycle. No new leads means no new customers which will inevitably stall business growth. Definitely not good. So start tracking your leads. You might define leads as an email newsletter signup, a PDF download, or a form submission depending on your business model.
Customer Traffic Sources – This is completely different from normal traffic sources (a vanity metric). Remember, we don’t care where our traffic comes from. But we REALLY care where our customers come from. So keep a close eye on which traffic sources are bringing home the bacon.
ROI of Campaigns – If you’re spending money on marketing, you need to make sure you get it back. The goal of every marketing campaign is to get customers. And each campaign should give you enough customers to turn a profit. Make sure you can track different campaigns and figure out which ones are actually driving customers to you.
Are these the only options?
Nah. They’re just examples. Mix and match them (and use metrics I haven’t mentioned) to get the best fit for your business.
But make sure the metrics you choose are actionable, clear, and track critical elements of your business.
Limit Yourself to 5
When you’re just starting, limit these key metrics to no more than 5. This keeps you focused on only the essentials so you can quickly see how you’re doing. Once you get comfortable, feel free to start tracking up to 10. But if you go higher than this, you’ll quickly find yourself covered in data swamp muck again.
Now that we know what to track, we need to find a way to get that data from Google Analytics.
Step 2: Force Google Analytics to Track What You Want
Sometimes, this is easy. Other times, not so much.
For each of the metrics we already covered above, here are some quick notes on what you’ll need to track them:
Tracking SaaS products with Google Analytics can get a little tricky. In Google Analytics, we can’t track people. So we don’t have a reliable way to measure how many people start a free trial, activate your product, and upgrade to a paid plan.
Instead, we’ll need to use a combination of events, goals, and ecommerce tracking to get a rough idea of how many people move through each step.
First, track your free trials with a Google Analytics goal. This will tell you how many people are creating accounts and where they’re coming from.
Then track your activations using events. The Google Analytics Event Tracking Guide will give you all the gritty details. You won’t know who is doing the activating but you will get a rough idea of how we’ll you’re encouraging people to use the product.
Finally, use ecommerce tracking to track your upgrades to paid plans. You can also use a goal and assign a goal value if you prefer (it’s easier to set up but you won’t have as much data).
This batch is pretty straightforward. Go ahead and set up ecommerce tracking which imports all sorts of amazing data right into your reports. This will give you total revenue and average order value.
For your checkout funnel, you’ll need to define a goal (use your purchase confirmation page), and tell Google Analytics which pages people have to go through during each step of your checkout. Then Google Analytics will build a fancy funnel for you that’ll look like this:
First, use goals to track your leads. Once it’s set up, just check your goal reports to see how well you’re bringing in leads.
Make sure you’re using ecommerce tracking if customers can make a purchase directly from your site. Then you’ll be able to apply revenue data to most of your reports (like your traffic sources and keyword reports).
To see which traffic sources bring you new customers:
- Go to your Google Analytics profile
- In the sidebar, click on “Traffic Sources”
- Then click on “Sources”
- Select “All Traffic”
From your All Traffic report, click on goal set or ecommerce to see which traffic sources bring revenue and customers:
To track your marketing campaigns, you’ll need to add UTM parameters to each of your links. As long as you can control the link of the marketing campaign, Google Analytics will tell you how much revenue that traffic produced. And if you’re using goals, it’ll also tell you how many people completed them.
If you’re using AdWords, definitely connect your AdWords and Google Analytics accounts so that they’ll share data with each other. This is one of the 8 must-have features of Google Analytics (follow the link to learn how to do it).
Step 3: Ignore Everything Else in Google Analytics
From now on, go straight to the good stuff when you log in. If social media reports aren’t critical to the metrics you already picked, skip them. Ditch pages/visit, time on site, and everything else.
By focusing on what matters, you’ll avoid vanity metrics.
A vanity metric makes you feel good when it goes up but it doesn’t help you get your business to the next level. They are distractions that prevent us from focusing on the metrics that really matter.
Unfortunately, Google Analytics is FULL of vanity metrics.
Every piece of data in this screenshot is a vanity metric:
They include things like:
- Time on site
- Bounce Rate
- Exit Rate
Now, some of these numbers can be valuable when you’re trying to answer specific questions.
Let’s say that you’re assessing your SEO campaigns and you want to figure out how your landing pages are doing with organic Google traffic. You already know how valuable each keyword is to you (you tied your keywords to revenue using ecommerce tracking) but you want to see how your landing pages are doing.
Pull up a report with the landing pages that you’ve optimized for search, then start looking at bounce rates. In just a few minutes, you’ll be able to spot pages that turn away more traffic than others.
But you still want to compare your bounce rates with a metric that matters like total revenue from each keyword. If a landing page has a high bounce rate but only drives a little revenue, it’s probably not worth the effort.
Even in this case, we’re not using a vanity metric on its own. We always want to compare trends in vanity metrics with other data that directly reflects our business goals. Otherwise, we end up increasing traffic but lowering our revenue.
Vanity metrics can help only if you have a VERY specific question you’re trying to answer. By themselves, vanity metrics don’t tell you anything important about your business. Use vanity metrics to help you answer specific questions but don’t track them on a regular basis.
Since the majority of Google Analytics consists of vanity metrics, we can safely ignore a huge portion of it. Go straight to the metrics that matter by flying over the data swamp of vanity metrics.
Bottom Line: How To Find The Treasure Within Your Business
Google Analytics wasn’t built to track your business. It was built to track traffic. But traffic doesn’t always help you get your business to the next level. This is why you need to dodge the bogus, vanity-metric-laden paths and focus on the few key metrics that do tell you how your business is doing.
To find the location of your business treasure quickly, follow theses 3 steps:
- Define the important metrics for you (no more than 5)
- Force Google Analytics to track them (when possible)
- Avoid all other data (unless answering a very specific question)
When you follow these steps, you’ll save yourself plenty of time by staying out of the Google Analytics data swamp. And you’ll always know how your business is doing.
Once you start focusing, you’ll easily reduce the time you spend on your reports down to half of what it currently takes you. And you’ll get better insights on how to improve your business.
What are your key metrics? Tell us in the comments!
About the Author: Lars Lofgren is the KISSmetrics Marketing Analyst and has his Google Analytics Individual Qualification (he’s certified). Learn how to grow your business at his marketing blog or follow him on Twitter @larslofgren.