Web Metrics: A Good ROI Is Hard to Find

Online gift site Red Envelope cut its shopping cart abandonment from 81 percent to 63 percent, reduced site-related calls to the customer service center by 45 percent and increased sales revenue by 95 percent. How did the company do it? According to Vividence, which collects and analyzes data on company websites from panels of users, Red Envelope was able to prove this impressive ROI after using the San Mateo, Calif.-based vendor’s services. So far, however, few companies have calculated such clear-cut ROIs from the use of website metrics or analytics software or services.

In fact, some companies have spent far too much on Web analytics software. According to a recent Jupiter report, one “highly trafficked” content site spent a total of just under $1 million in licenses and professional services for an eight-month fiasco that produced “wildly inaccurate and completely nonactionable reports.” The package was eventually shelved for an ASP.

The lesson? Comparison shop carefully when looking for a Web metrics and analytics package. And you will be shopping because top management will want proof that you have a way to measure your website’s success.

“It’s very hard to prove ROI for a measurement strategy,” says Randy Souza, an analyst at Forrester Research in Cambridge, Mass. The real value of these tools, however, is that you won’t have to go into a site redesign totally blind, Souza adds. Instead of spending $100,000 on a complete redesign, for example, you can spend $10,000 to $15,000 on focused design fixes.