Every time someone requests one of your web pages and the files associated with it (i.e. graphics, audio, banner ads, buttons, etc.) from the server that hosts your web site, these details are recorded in a file called a server log.

You should be able to access these files from your web host, either through their own reporting system or as raw data that you can then analyze using your own software.

Here are just a few of the things your web logs can tell you:

• Which search engines bring your site the most visitors.
• What keywords visitors are using in the search engines to find your site.
• Which linking partners and ads are bringing you the most traffic.
• How long your visitors are staying on your site and on individual pages.
• Which pages your visitors are most interested in.
• Where visitors are entering -- and exiting -- your site.

But the truth is, some of these numbers are meaningless on their own. After all, there are plenty of dot-coms out there who get loads of traffic but still don't see many sales!

Frankly, it's combining your site stats with your existing sales and subscriber information that makes these metrics powerful.

For any site that has more than a page or two, this is a crucial -- but often ignored -- set of metrics, referred to as Clickstream. It basically involves tracking how visitors move through your site, including where they enter, where they exit, and what pages they view along the way.

Included in this category are stats like your homepage "bounce" rate: How many visitors to your homepage leave (or "bounce") without going any deeper into the site. If 75% of your visitors don't click a single link off of your main entry page, you need to find out why, or you are wasting valuable traffic.

The clickstream will also show which pages people are leaving your site from. For example, if more people leave the site from your order form than any other page, you might need to assess how "user friendly" this form is. This can be a crucial way of seeing how effectively your navigation system is guiding your visitors toward your products.

2. How much is it costing you to attract new visitors to your site?

The Cost per Visitor (CPV) stat tells you how much it costs, on average, to get a visitor to your site. If you're using paid advertising, this can be a particularly valuable figure. Just compare your cost per visitor to your revenue per visitor, and you'll know whether or not your advertising is profitable.

(marketing costs/# of visitors) x 100 = Cost per Visitor

If you spent $1,200 on a campaign and it brought 2,700 new visitors, then your cost per visitor is $0.44.

($1,200/2,700) x 100 = $0.44

3. How much are you paying to gain each new customer?

This Cost per Customer (CPC) is a key number to track to make sure you aren't paying more to attract each customer than you make in profit from each sale.

(marketing costs/# of customers) x 100 = Cost per Customer

If you spent $1,200 on a campaign and it brought 327 new customers, then your cost per customer is $3.67.

($1,200/327) x 100 = $3.67

Quick Tip: Unless you have a custom-built system, you won't be able to view all of your stats in one place, so I recommend setting up a spreadsheet in Microsoft Excel, where you can plug key sales numbers and stats into one "dashboard" to track all of your key metrics over time. Once you figure out all of the formulas, you can just type in your new details each week to track your progress.

There are a few basic tools to help automate how you measure your site's performance:

1. Software Solutions:

Obtaining your server logs is a good first step in getting a hold of some of the key information you need to measure your success. Some web hosts already have log analysis software, which makes things really easy. They will import your server logs into their database, and automatically turn all of the numbers into easy-to-read reports, graphs, and charts.

If your web host doesn't offer this service, you need to ask them for your server logs, which you can download via FTP. In many cases, what you are going to get is raw log data -- piles of numbers and symbols that are almost impossible to interpret! But there are dozens of log analyzing programs out there that will make sense of this information.

Here are a few of the programs that I'm familiar with. Many are either free or have free versions. This isn't an exhaustive list, so you may also want to do some research of your own to match your site's unique needs.

• Analog (http://www.analog.cx/)
• WebTrends Log Analyzer (http://www.webtrends.com/)
• Funnel Web Analyzer (http://www.quest.com/)
• Fluid Dynamics - AXS (http://www.xav.com/)
• WebLog (http://awsd.com/scripts/weblog/index.shtml)

2.ASP Solutions:

While server logs are rich with information, they have their limits. They can tell you how many visitors you get in a day, for instance, but not how many are coming to your site for the very first time. That's where ASP (application solution provider) tracking solutions are great.

Using an ASP to measure your stats usually involves pasting a nugget of HTML code (usually with some JavaScript and an image) onto each of your pages. When a visitor comes to your site for the first time, they may be assigned a "cookie," which is a small text file that records their visit.

The ASP then tracks visitors through your site and provides a web site where you can check your results. (Note: If you use an ASP solution, check to see if they use cookies to track visitors, since it may mean altering your privacy policy.)

Here are a few ASPs that offer tracking services. ASPs generally charge based on the number of page views. Some offer free versions, but require you to display a banner or small button on each page, something you should obviously try to avoid if you can.

• Site Meter (http://www.sitemeter.com/)
• SiteStats (http://www.sitestats.com/)
• HitBox (http://www.hitbox.com/)
• IndexTools (http://indextools.com/)
• ClickTracks (http://www.clicktracks.com/)

3. Other Tools:

If you are using software like AssocTRAC to track your affiliate sales, then you may also use it to track the metrics behind banner ads, text links, buttons, or any type of advertising you pay for, including all aspects of PPC campaigns.

This can be a powerful way to track such vital metrics as sales per visitor and your conversion rates on paid advertising much more accurately than otherwise possible. You'll be able to track these statistics for every link into your site by assigning each a distinct tracking number.

Create a successful Google Adwords Campaign. Download this free comprehensive report.

Tracking your results is one of the most important things you can do to ensure that you are always increasing your profits. After all, if you don't know what the problem is, how on earth can you expect to fix it?

But make sure the key metrics you're focusing on apply to your site's specific needs, and continue tracking them as you test various solutions to the problems you've identified. Of course, numbers won't always tell you the whole story, so you may want to consider combining these results with other sources, such as usability studies, customer satisfaction surveys, and focus groups.

If you have a custom-built ordering or database system on your site, it may well produce data of its own, so make sure you can capture that as well. If you've got technical resources available to you, a simple customized solution might also capture the specific metrics that you need to track.

Those businesses that do take the time to carefully track their results are going to be the most successful, and it's for the simple reason that they are able to fix problems as soon as they discover them. If they find that their revenue per customer is lower than the cost of acquiring those customers, they can search for less expensive ways of attracting new customers while trying to boost the amount each existing customer spends. If they're getting lots of visits to their salesletter but not converting sales, they can make changes to the copy right away.

This is why marketing over the Internet is so exciting and so lucrative. It is the only medium where you can measure your success in real time, and then make changes based on what you've learned -- all within just hours or days!

2. Track Exactly Where Your Best Customers Are Coming From!

Assoctrac is a powerful, full-featured affiliate software solution that gives you the exact tools you need to instantly harness the true profit-generating power of an affiliate program. Plus, this powerful software can also be used to uncover rich metrics you won't find in your server logs!

• Track -- to the penny -- exactly how much you're earning for each customer referred to you, and know instantly who's delivering the most lucrative traffic.
• Advertise your business on every corner of the Web -- FREE! With hundreds, even thousands, of affiliates personally recommending your products and services to their subscribers!
• Never lose money on ineffective advertising -- ever again. You only pay when a sale is made!
• Track 10,000 affiliates as easily as one affiliate with software that manages everything automatically!
• Skyrocket your sales by 400% or more with third-party recommendations that are far more powerful than you promoting yourself!

If you want to profit from the awesome power of affiliate programs while tracking the precise value of every paid link to your site, go to: Assoctrac

ABOUT THE AUTHOR: Corey Rudl is the owner of four highly successful online businesses that attract more than 1.8 million visitors per month and generate over $6.6 million each year. He is also the author of the #1 best-selling Internet Marketing course online.

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