Some interesting questions were raised based on my last post on one metric to define website performance (http://www.analyticsheaven.com/2010/03/one-metric-to-define-website.html), so I felt like I should expand on the thought a bit more.
This theory of one metric often confuses the readers. It is not meant to replace the other more prominently monitored metrics, such as, bottom-line (which will be revenue). Return frequency is simply an indicative of consumer satisfaction with our product. Don't we all visit the same store, if we like what we see and get what we like? This philosophy extended to a web experience is what I am referring to as a metric that defines your web performance.
A higher return frequency means that our visitors are coming back to consume our content, buy our wares, conduct research, or whatever else we are programming. Looking at it from a mathematical model perspective, the metric is going to drive more revenue through our own unique revenue models (display, CPC, leads, etc.). I view revenue performance as a variable that is dependent on some of the more "upstream" variables (like, visits, return frequency, conversions, etc.) that can more directly be tied to consumer satisfaction which typically leads to higher bottomline.
An example of a parallel will be in call center industry, where Member Satisfaction Index (MSI) is often used as a metric to measure service quality. Similarly, Harvard Business review had published a study on "net promoter" being that "one" metric that everyone should monitor.
Monitoring one metric as an overall indicator of the health of your business does not mean that we ignore; defining corporate/business unit goals, identifying the KPIs and metrics that define success and acting on recommendations to improve upon each collectively - as may have been misunderstood from this post.
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