By Marty Carroll, Director of Usability Practice

There's a question that crops up time and again whenever the commercial benefits of website development are put under the spotlight: how to accurately measure ROI. While many organisations acknowledge that the Internet is a core business platform and are investing money accordingly, even in today's sober economic environment many do not assess the ROI of their site spend with the same rigorous methods of analysis that are applied to other channels. This is because until now a framework for measuring ROI on site development has proved elusive, due mostly to the scarcity of appropriate data.

A study by Forrester Research found that 98% of site owners use traffic, such as hits and unique visitors, to gauge performance. While such indicators are useful, it's impossible to draw accurate conclusions about site performance from this data. It's like judging the quality of a football match by the attendance figure.

There are, though, a number of tools on the market, referred to collectively as Web analytics tools, which allow organisations to gauge site performance on far more useful criteria, such as purchases per customer or conversion rates. These afford a business a valuable insight into its site's weak spots and provide a concrete basis for improvement, Identifying which areas of the site are performing below par is only part of the solution. Web analytics tools may tell us what visitors are doing, but not why they're doing it. This is where usability research comes in.

With usability research, specialist practitioners observe and talk with participants as they try to accomplish true-to-life tasks on a site. This allows them to form a detailed picture of the site as experienced by the user.

Until now, businesses wanting to ensure they got the most from Web site spend faced two main difficulties: identifying which areas most need improvement and assessing ROI after improvement has been carried out. Using Web analytics tools and usability research overcomes both these hurdles, identifying a site's weakest areas so that resources can be targeted most effectively, then making it possible to quantify ROI. For instance, if improvements are made to a site area with a low conversion rate, then ROI can be calculated according to any sub-sequent increase in that rate. Decisions on Web site spend have until now been based more on intuitive or vague market.

Web analytics tools and usability research identify a site's weakest areas so that resources can be targeted most effectively research than on a patent under-standing of the ROI. With Web analytics tools and usability research, we now have a framework for accurately evaluating the relationship between budget spend and commercial gain.

If you'd like to read more on this subject, please use the link below for Marty Carroll's report: 

(PDF, file size 264KB)

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