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Web Numbers Mania: Interpreting Web Site Statistics

As the Web evolves and more people conduct e-commerce, it appears as if the reliance on Web statistics to support claims is also increasing. This seems particularly true when it comes to projections about the growth and potential of conducting business on the Web. The possible result: a tendency to act upon Web numbers without exposing them to the necessary scrutiny.

This could spell disaster when building a business in the new electronic economy, where product innovations and market niches surface and fade at a staggering rate. As business owners, the only way to ensure that statistics about the Web are relevant and reliable is to develop some understanding of what's involved in gathering and interpreting these statistics. This week we will review the steps that should be considered in processing Web statistics.

In reviewing these stages, keep in mind that not only will you progress from stages one through six, but you may loop back from one step to another. For example, after finding the Web statistics you are looking for, you may refine your original need.

Step 1: Identify your need

Probably the most enticing, and potentially distracting, aspect of the Web is the ease of access to information. However, access can cloud focus. As a result, remain disciplined by clearly defining the Web statistics you need. For example, perhaps you need to know how a particular market segment is spending its time on the Web. Or, maybe you need to know how your revenue growth compares to your competitors'. The more specific you can define your need, the easier it will be for you to conduct the remaining steps. Key questions to be answered in identifying your need:

1. What insight do I hope to gain from these statistics?

2. How do I intend to apply these statistics?

Hint: Ask someone with a good general business sense what statistics they think they would need.

Step 2: Develop a methodology

The information you need should dictate how it is gathered. For example, if you need general industry knowledge, you can probably scan the Web sites of key industry players and relevant associations. Also look to newsgroups for identifying the issues that are current and/or long lasting. Key questions in developing a methodology are:

1. What are the sources of information available?

2. What are the time constraints in accessing the information?

3. What costs are involved in accessing sources?

Hint: Identify those people that have looked for the type of statistics you are seeking, and learn from their mistakes.

Step 3: Find the information

If you've proceeded thoughtfully through steps one and two, step three is the fun part. If you haven't, step three is long, tedious and expensive. Finding the appropriate Web statistics requires a balance between the discipline of staying "on track" and the creativity of looking for that "road less traveled".

Hints:

1. Begin by using tools that span search engines;

2. Seek out publicly and privately funded "think tanks"; and

3. Contact specialty libraries and private research firms.

Step 4: Verify the information

Each time you set out to use Web statistics remember the axiom: there are lies, there are damned lies, and then there are statistics. The point is that, depending on your need, statistics can be used to support virtually anything. So, how do you verify one set of Web statistics as being more useful, more applicable, or more reliable, than another is? First, consider the source of the statistics and any possible political, economic or social agendas.

Second, compare the statistical output with that of other studies originating from sources that openly divulge the details of their methodology, analysis and funding. Finally, balance the Web statistics with what you and other experts know about the business.

Step 5: Analyze/translate the information

Once you are confident that the Web statistics you have are reliable, the next challenge is to make them meaningful to you. This involves assessing whether the statistics can assist you in addressing the challenges and issues that you are facing in building your business. The point here is to assess the immediate and long-term impact of the statistics on your key business areas (administration, finance, operations, sales and marketing, human resources, information systems, etc.). For example, if a particular segment of the population is spending more time on the Web, does that provide you with an opportunity to limit your sales force or possibly expand your customer service capability?

Step 6: Apply the information

Unfortunately, if you have successfully and thoughtfully completed steps one through five, there is no guarantee that step six will be easy. Depending on the complexity of your business, your market, your industry, and your organization, applying Web statistics in a timely and consistent manner can be a challenge. At one end of the scale, you have the luxury of your colleagues' buy-in because they believe that being competitive and innovative requires monitoring, anticipating and integrating the latest Web statistics. More than likely, you're at the other end of the scale: it's an uphill battle trying to get others to see the importance and impact of Web statistics. There are two challenges that you will likely face:

1. Showing the relevance of Web statistics; and

2. demonstrating that appropriate actions need to be taken sooner rather than later.

Hints:

1. Use case studies of businesses with similar challenges, structures and histories; and

2. Share with your colleagues your reasons for collecting Web statistics long before you try to use them to shape decisions.

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