Have people visited my website and, if so how many? This is the most basic question about your website that you'll want answered. The most basic tool to answer this question is the hit counter.
 
A hit counter

Hits were originally the standard by which web traffic was judged, but are now out of favour. This happened since a hit happens each time that a server sends an object (page, graphics, animation etc.). Thus one page with twenty images would generate 21 hits for each visitor.

A visitor counter

Another common counter is a visitor counter.  These are better than the hit counters, however they commonly have a serious limitation: If I visit your site 5 times today, I am counted as 5 separate visitors. This results in inflated visitation data.

What You Need:

If you are thinking of getting your first website setup, a website statistics package should be an essential element on your shopping list.  Web statistics (sometimes called a website analytics package) enable a website owner to see how your website is performing and how people are interacting with it.  If you already own a website, your website host should be able to help you get access to your statistics. 

You website statistics should:

• Measure Unique Visitors:  The best measurement of people visiting your website.
• Help Identify Trends Over Time
• Be password protected: Statistics contain sensitive information especially about where your visitors come from, and shouldn't be freely available to competitors.
  

Different packages produce different results. Awstats is the standard package we deploy on our websites (other options are available) and the following screen shots are from that software.

The second essential key thing to know is where are your visitors coming from.  There should be three major sources of visitors to your website:

1. Direct
2. Links
3. Search Engines

Direct

Direct visitors are people who may have seen your domain name on signage or in an newspaper advertisement among other things.  They find your site by directly typing in your domain name into their browser.

Links

Website statistics provide a list of sites which link (and result in visitors) to your website. This will help you make more intelligent marketing decisions. If you spend money advertising your site online your statistics will show you how effective that money is. For example advertising on the online yellowpages.com.au was something that we tried a while back. Our package included a link to our website.

People that click on this link and visit our website show up in our website statistics.

From this we could quantify the number of visitors to our website and calculate how much each visitor cost us. This principal can be applied to any paid advertising you are doing on the Internet allowing you figure out how effective it is for your business.

Reputation Management: You are not in control of who links to your website. Website statistics will alert you to a forum or blog post where people may be discussing (either positively or negatively) your company. You will be then aware of the discussion.

Search Engines

Search engines are the most common way for someone to find your website (if they don't know your domain exactly).  Website statistics will tell you how many visitors arrived at your site from search engines like Google, Yahoo! and MSN.   

Finally, once you know how many visitors and how they found you, you might like to know what they are doing on your website.

• How long are they staying on your website?

• Are they visiting the home page and leaving straight away?

(The bounce rate is calculated from the number of exit / number of entry ... in this example (41/111) = 37%)

• How much of the site are they looking at?

• What pages are they looking and what are the most popular pages?
  
• Are visitors returning to my website?