Defining goals on your website is an important step to measuring the ability of your website to achieve business objectives. Probably the best way to measure the effectiveness of your goals is the conversion rate. The conversion rate is the total number of desirable outcomes divided by the number of attempts to reach that outcome. The result is a percentage that will indicate what portion of site visitors successfully achieved your goal. If you’re confused with the math, don’t worry; your web analytics software will run the calculation for you.

Using standard web analytics software, such as Google Analytics, you can set up and track a number of goals that are important to your business. A goal can be any measurable event such as a completed checkout on an e-commerce site, a successful subscription to a newsletter, a download of a PDF whitepaper, or a request for more information from a ‘Contact Us’ form.

In order to track the conversion rate for various goals on your website you’ll need to ensure there is a success page that is served to the user once the goal scenario is complete. This page cannot be reachable by any other means, or your numbers will be incorrect. All visits to the success page will represent a successful conversion in the analytics software.

If there is more than one step in the process to reach a goal, you can set up a funnel to track these steps. For instance an e-commerce site will likely require that the user add an item to the cart, push the check-out button, fill in their mailing & billing information, then purchase the product. You can measure how many visitors move from one step to another in the process thereby learning where visitors are leaving and where you’re losing potential business.

(In Google Analytics, you access the goal & funnel creation page by clicking to Edit Settings from the first screen when you log in to view your stats.)

Your web analytics software is also able to tie a monetary value to each goal that is completed. For instance, if the average order value of a completed shopping cart is $50, you can tell your software that each goal is worth $50. Because your analytics software knows the source of your website traffic, you can now measure the ROI of all your Internet marketing activities. Every goal conversion that is attributed to an email message, paid search ad, or banner ad is now tracked and measured for its value.

Armed with all this information you can now set out to tweak your marketing tactics to improve your ROI. You can also start making changes to your website to optimize goal processes and increase your conversion rates.

Now you truly know the effect your website has on the bottom line.