(See also, The complete list: 25 steps for building a Micro-ISV)

Online businesses have amazing capabilities when it comes to understanding their customers. With good web analytic software we can know where every potential customer has come from, what they did while on our site, and where they ended up.

To gather this same kind of information, Offline businesses are stuck doing expensive surveys and employing demographics companies. All they end up with is a vague shadow of a reflection of a grain of the truth.

But even still, offline business are willing to pay exorbitant sums for this kind of information. Why do they blow all that dough? Because everything in business revolves around knowing your customer.

And lucky for us, the best things in web analytics are free.

If you want -- the decision of which web analytics provider to use can be an incredibly complex experience. You can purchase a 275 page book from CMS Watch!

Or you can use:

"Leon's 100% guaranteed, absolutely idiot-proof one-step guide to choosing the right web analytics provider"

Here it is...

1. CHOOSE GOOGLE

Google Analytics (wikipedia entry) is the monster in this field. It's very easy to use, a cinch to install and chock full of information.

We use it at TimeSnapper. My business partner Atli set it up, so i can't really talk about the specifics. There's plenty written about it elsewhere, including some great info about Google Analytics from LifeHacker

But here's quick coverage, on one of the basic web-analysis issues that is particular to people who distribute binaries, such as Micro-ISV's.

Q: How do you use page-tracking software to track downloads, rather than page hits?

For example, when someone downloads your software, they might be downloading a zip file or an msi file. That's not a web page... how can web analytics software keep tabs on that?

I've got two answers to this one. Firstly, you can configure google analytics to record info about links being clicked (that lead to these files) as if they were files in their own right. See info about urchin tracker for help.

The other techniques is that your web server will have tracked every request for such files -- so you can turn logging on with your web server and mine the logs. There's a lot of free software that can make this easy for you.

Some of the packages for doing this (and this is 'seriously old-skool stuff' that your web 2.0 script kiddies can't remember as they weren't born when these things hit their hey dey) include Awstats, webtrends and analog.

What's the end game?

Contrary to common opinion, web analytics are not an end in themselves. It's not just about the pretty dashboards. All of that information is gathered for a reason -- feedback control.

Once you're gathering detailed feedback -- you can begin to gauge the effectiveness of all of the marketing activities that you engage in. And in software, and on the internet -- EVERYTHING is marketing. In fact, marketing is so central to everything you do online, that you don't even need to think of it as marketing. It's just 'being'.

So you re-arrange the layout of your landing page. Was it a good thing or a bad thing? That's what analytics can tell you! You changed the download image, changed your template, re-worded your slogan, put flyers in your local nudist colonies newspaper... did it have any effect? Should you do more of that or less? Analytics! That's where the answers is!!

Well-Regarded Alternatives

I have no experience with these three alternatives -- but if there's a feature you need and Google Analytics doesn't offer it, then check out these three little fellas, because they're recommended by various contributors at the joelonsoftware business of software forum

• Weblog Expert
• basil
• MinAlyzer

Increase Your Arsenal!

For the serious infonaut, there's other tools you can use as well.

We've set up Google Alerts to give us a daily email about anyone mentioning TimeSnapper or any other topics of interest to us.

Services like Technorati are also useful for finding out who's mentioning your product, or that of a competitors, or any topic you are tracking.

Where to from here?

I co-implemented these 25 steps a year ago now (with TimeSnapper), and first started to write about them nine months ago.

There's been a long break between writing steps number 4 and 5. But don't assume that i've stopped writing them, nor believe that I've promised to complete them.

If there's a particular step that you're waiting for, or if you need particular support or advice about your Micro-ISV, don't hesitate to email me (leonbambrick at gmail dot com). Other people sure do, and I love to help out where I can.

Also of course, I recommend the joel on software 'business of software' forum as a great place to ask any questions you have. The people there are always helpful, if sometimes a little grouchy ;-)

If you're looking for a book on the topic, I know of two excellent books: The Business of Software, by Eric Sink and MICRO-ISV from Vision to Reality by Bob Walsh. I haven't read Bob's book -- but my business partner Atli sure has. I know this because I get this steady stream of suggestions from him, all of which are dynamite stuff.