Web is the only communication channel that allows you to track practically everything that your customers do when interacting with your business. Understanding this gives you ample opportunity to learn more about your customers and their needs.

Proper analysis of your web traffic will tell you more than just whether your web site is realizing its design objectives. It can tell you about the real motivations and behaviors of your customers, because people are true to themselves behind the net. Furthermore, it can provide you with important information that you can use to predict the likely outcome of your future activities, such as product launches.

The question of what to look for when doing your web traffic analysis, in a way, depends on what aspect of your interactions with customers you would like to find out about. Your business needs to develop a set of metrics aimed at measuring the performance of your website in attracting and interacting with your customers.

In a nutshell, website traffic analysis is about collecting, analysing and interpreting the following data:

• how the traffic arrives at your site,

• which users make up the traffic,

• how users interact with your site,

• and finally the result of the visit - was it a happy ending?

The results of the analysis should help you to:

• measure effectiveness of your customer acquisition and retention strategies.

• develop strategies to contain unwanted traffic leakage from your website and to enhance the online experience.

• increase the number of "happy ending" visits.

• project the likely outcomes of future activities.

More specifically, some of the things you can do are as follows..

• Changes in traffic volumes may help you measure the impact and reach of your customer acquisition strategies on your online audience.

• Analysis of the composition of your traffic may help you with customer segmentation. Through this you can identify the repeat and one-off customers, and segment the traffic. It can even tell you if any of your competitors are accessing the web site and what areas are they visiting.

• The segmentation of traffic may help you gauge if you are attracting the right traffic to the site, and if your traffic generation channels such as affiliate programs and search engines are driving traffic to the site.

• The amount of interest in the tools, services and content offered at the web site may help you enhance the relevance of existing ones, and to design new ones.

• The pattern in which traffic navigates through your site (also referred to as click-stream data) and the amount of time spent on a page may help you understand the motivations and interests of your online audience.

• Click-stream data may help you offer personalized content to individual visitors and customised navigation to audience segments.

• Click-stream data may also help you understand if visits concluded with a happy ending. Measuring unique sessions without any relationship to the outcome of a visit is like standing at your shop front and counting the number of window shoppers or passer-bys.

• Analysis of click-stream data may help you improve the navigation on your website and contain unwanted traffic leakage.

• Analysis of the "search terms" people are using in their search engines to find you, and also the search terms they use within your site may help you understand what motivates their visit.

• The exit pages, that is the page your visitors are leaving your site from, may help you understand if the visit was happy ending and whether you can be assured of return visits.

• The pages that people are looking at the most, and least, may help you understand the interests of your online audience. If there is content that is not looked at much, but which your business wants your online audience to look at, a number of things might have gone wrong. These could range from navigation problems, to the design, and to failing to attract the right audience.

• Historical traffic data may help you forecast the likely outcomes of future activities, such as new product launch and marketing activities.

• Changes in traffic volumes which you cannot explain by internal factors, may help you understand external factors and their impact on your business. These external factors may range from your competition's marketing push, to seasonal activities such as major holidays and sporting functions like the Olympics. A good way to understand these fluctuations is the use of a Panel-based Traffic Measurement Service. These services allow you to compare your site usage to a relevant comparison group's.

These are only some of things that you can derive from the web site traffic analysis. It is obvious from this list that web site traffic analysis must not be seen in isolation from the rest of your business. It must be an integral part of how you run your business.

The analysis outlined in this article focuses on traffic, not on the technical performance of a web site. Although inter-linked with the experience of the online audience, I suggest separating it from traffic analysis as this is a business activity that requires different skills. Technical analysis is a topic on in its own right, and has the objective of ensuring robustness, availability and the correct display of information in browser software and different screen resolutions.

If your business uses, or plans to use, the online platform as part of delivering value to its customers, you need to develop analysis metrics, and regularly collect, analyze and interpret your website traffic data. This will equip you with important information to keep abreast of what your customers are demanding, and to position your business for the future.

Next Article: Two Limitations of Website Traffic Analysis Tools: Capturing Traffic Data for Dynamic Content and Click-stream Analysis