Want web analytics to matter at your business? Here’s how.

Go through this exercise, and you will instantly matter more than you ever dreamed possible.

Here are the steps:

  1. Get a membership at an online broker like e*trade.
  2. Buy 1 share of your company’s stock.
  3. Make it move.

The big disconnect in web analytics is that we keep talking about how what we do is web site focused. Forget that. That’s nonsense. That’s Kindergarten.

Web analytics, like everything else in your business is about one thing: the value of your business. The key driver of value is cash flow. The key components of cash flow are revenue and profitability (making money and keeping it).

From that level of detail, it’s up to you to figure out the breakdown. Whether revenue growth comes from sales, building loyalty, pageviews, leads, or something else, you have the ability to drive delta. Profitability may be a tougher nut for us to crack, and it may involve some operational aspects and types of metrics we have a harder time getting out of the suite of tools we have available, but if you just ask yourself what it takes to make an incremental dollar, you’re well on your way to understanding profitability. Avinash has also written a great post to give you a ton of ideas about mapping your web data and behavior to net income, which is very similar to cash flow. All I would add is that there is a huge operational aspect, “how work gets done,” at your business. Whether it’s realistic for us to begin making an impact on that, though, is definitely tough to answer. But we all know it’s a problem, and we should be able to do something about it, eventually, because…

As we’ve discussed in great detail on this blog, you web analytics people are hugely awesome simply because you have a lack of cognitive bias: you, unlike the specialists in the disciplines that pepper your organization, don’t have a financial incentive aligned with any type of choice or discipline. You are able to choose the right path with a clear head and illustrate clearly what the impacts of compromise (and lack thereof) are for your business.

The exercise of buying a share of your stock and making it move accomplishes one key thing: it changes where you’re focused on creating a delta. At all of the highest levels of your organization, the stock price and its key influencers are the only target. The time the executives will give you on the open mic is directly related to your ability to speak this language. Yes, you can break it down as many ways as it takes to get to what you recommend the company does to impact share price, but the conversation starts and ends there. Period. You can even try opening your next presentation by telling them you went through this exercise. They’ll probably get a kick out of it, and it may snap them out of their predisposition that they’re about to hear a geekfest.

You start showing a delta in your stock price, and eMetrics is at the Four Seasons with live peacocks in the lobby next year.

So, if you’re not in a publicly-traded company, what sort of a fair comparison can you draw? Think about what your company’s goals are. Is it to make money as a start-up? To be purchased? To grow into a cash cow? Each of these things will break down to revenue and profitability. So, focus on what can be done to these two cash flow drivers and try to tie it back to the high-level company goal. Want to talk about it? Let’s chat on twitter!