In the first installment of this executive series on Web Analytics, we created a quick business case for Web Analytics. Before we start thinking about the technology, we need to step back and look at what needs to be in place before you invite that analytics salesperson into your living room. Web analytics data is useless by itself. Without establishing standards and processes (the who, what, when, and how questions), you may find your investment returned nothing more than a set of pretty pie charts to adorn your office walls. Although elegant reporting is an interesting feature of many of these tools, the real value comes when the numbers drive change. We call this process Active Optimization, and it has three major components—reporting, analysis, and action. How you implement these three will be unique to your organization, but I’ll introduce them here. Good reporting is the foundation for a good optimization program, filtering the data into useful information. Although nearly all analytics tools offer some form of reporting, none can automate the inevitable and unanticipated questions that today’s business world generates. Use built-in reporting as far as it can go—creating custom reports that are delivered regularly with the metrics that drive your organization or department. However, be prepared to invest in additional reporting from someone who knows your analytics tool and can apply that technology to your business. Reporting provides the numbers, analysis helps you understand what they mean. Is it good that 85% of your visitors are “New”? Why are 20% of shoppers dropping off on the “create an account” page? Is your home page effective? These are all questions that can be answered with analytics data, but not without some good old-fashioned thinking. It’s worth spending some money to have someone deliver “these are the monthly numbers, this is what they mean, and this is what we should do about it.” This task can be given to someone inside or outside your organization, as long as they know (or can quickly learn) your business, the analytics tool, and analytics concepts. Finally, you must EXPECT analytics to drive change. Anticipate the fact that ideas will come out of your analytics reports that you will want to act on. Free up resources to respond to the most promising ideas and leave room in the budget for tracking these changes. Active Optimization is all about looking for small wins on a regular basis—but, you may also find a few big wins along the way. Analytics data, if used properly, can help you establish a more flexible and responsive organization—these changes are driven by ACTUAL customer needs and market conditions, so why not make them a priority? This is all much easier said than done; but, fortunately, this is a pretty mature market and there are few mysteries remaining. In my next post, I’ll touch on the technology that drives Web Analytics—how to choose the right product for your organization. Good stuff.