Lets face it, free is a great price point and the free version of Google Analytics is a great product. In fact, there are numerous multi-national companies using Google Analytics – not because they can’t afford a paid-for tool, but simply because is it good. Allowing them to easily visualise content and assimilate insights quickly.

So why use a paid-for tool? A client considering GA Premium (the paid-for version of Google Analytics) asked me the following question recently:

“One thing that would be great to cover in our meeting, is the value of the Premium product for us. How will it save us money by spending $150k a year instead of simply adjusting our approach and using the free product?”

That’s a great question – getting right to the point of value for money. And this was my two-point response that can be applied to any paid-for vendor….

1. Resource: Don’t upgrade to a paid solution unless you have it

If analysis is going to be someone’s full-time job – that is, working on bringing insights to the business on a day-to-day basis, then consider Premium as the right tool (even more so if there is a team of people involved). On the other hand, if the investment in analysis is only part-time, say 1 day per week, I would recommend the free product.

Why is staffing so important?

Spending 1-2 days per week analysing your website reports will not allow you to explore all the capabilities of the Premium product at any depth. You would be constantly scratching the surface without the time to go deep. Of course you could still hire a us to do the deep-dive stuff with the free version. However, if you have a popular site (say more than 10m pageviews per month), then sampling, data freshness and data retention are going to be important areas that will limit how deep we can go. These are Premium features.

RULE #1 – If you cannot commit 1 full-time analyst, do not pay for a web analytics tool

2. Value: Calculate it and ensure you get a return
Calculating the value of your website is straightforward when you are a transactional site. You know (or should know) the value of each page and the value of each visitor – broken down by referrer source/keyword etc. If you are a non-transactional website (the vast majority of enterprise websites are not e-commerce), then value is much harder to calculate – In fact, I rarely see the calculation even attempted.

However, monetizing your non-transactional site is critical to your success. Without it, and there is a serious danger your website is just a pet project – nice to have (the competition has one!), but not treated as a serious part of the business. Hence $150k per year for a measurement tool is never going to see the light of day in your organisation – and rightly so. As Jim Sterne would say – “you need to calculate the return on investment for measuring your return on investment..!” (read related post on value in GA)

I discuss monetisation in detail in chapter’s 8 and 11 of my book – 3rd edition now out! Its not rocket science, but does require time and energy to logically think through your website’s goals (aka: Call to Actions) and assign values to them.

Monetization, that is identifying goals and assigning a value to them, is key to your success. In fact, monetizing your conversion processes are the most important part of a web analyst role. At the end of the day, only something that impacts the bottom line of the business is going to receive any investment – be it resource or money. Therefore, monetization is a key step to understanding what resource and therefore what measurement tools are appropriate to invest in.

For example, if your conversion process is a $10 million per year revenue generator for you, $150k is of the order of 1-2% of the revenue. That means, if GA Premium can help you improve your conversion rate by a mere 1-2% it will have paid for itself.

Lets put this into perspective:

  • If your lead generating form (new sales enquiry) has an “industry average” conversion rate of 3.00%
  • and your sales team is able to convert 1 in 10 leads to a customer – this is fixed
  • Then improving your site content and/or its marketing so that the lead generation form converts at 3.06% will pay for your GA Premium account!

Is that achievable for your website? I would say that is achievable for *ANY* website.

If your conversion procession is a $1 million per year revenue generator, then you need to improve your conversion rate to 3.6%. Still very attainable, but harder. I consider that as the tipping point for your decision…

RULE #2. If your website is not contributing at least $1m USD per year to your business, do not pay for a web analytics tool.

Hopefully this puts paid-for web analytic tools into perspective, but I would love to hear your thoughts on paying for a data collection/reporting tool?