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Web Site Measurement Hacks by Eric T. Peterson

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Hack #94. Use Key Performance Indicators

Key performance indicators are a powerful way to present complex information that works to maximize the use of web measurement data within your organization.

A key performance indicator (KPI) is any ratio that summarizes two or more important measurements and is tied directly to your business objectives [Hack #38] . Examples include ratios like your order conversion rate (orders divided by visits) or the average number of page views per visit: numbers that, when they change significantly, prompt someone to pick up the phone, send an email, instant message, or walk down the hall and say, "Something is going on; we need to look into this more deeply right away!" The use of key performance indicators is a powerful and advanced strategy that can dramatically increase your ability to get executive buy-in for your metrics reporting strategy [Hack #91] .

A handful of really, truly useful key performance indicators is listed in Table 7-1. These are the kinds of useful ratios that are presented on a daily basis to captains of industry like Michael Dell, Jeffery Bezos, and Meg Whitman: CEOs who clearly get the power of the Internet and understand that every minute counts in an increasingly competitive world.

Table 7-1. Really, truly useful key performance indicators

Order conversion rate

Buyer conversion rate

Cart conversion rate

Checkout start rate

Revenue per visit

Revenue per visitor

Average order value

Visits per visitor

Page views per visit

Percent committed ...

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