The purpose of using Web Analytics is to extract useful information from millions of records and align them to achieve business goals. Most of the business owners with less knowledge of analytics or its usage only track basic data like visits, page views, bounce rates and exits.
Well such data provides only a basic understanding of something is wrong on a particular page, but doesn't give you a clear picture of what is exactly causing the problem.
You might spend some thousands of dollars on a campaign but if the you don't know the reason of the problem why people exit from a page, you loose you money and the users.
The best approach before doing a campaign or release of a new feature to your users is by tracking the user flow from the point of entry to the point of purchase/conversion and see if the business goals are achieved with the flow.
In case if a majority of users are existing before converting then with the help of goal tracking mechanism provided by Google Analytics, you would be able to capture the information if it is a proper exit from the site or to an another page on the website.
If the user is moving on to another page and exiting the flow, you may take a decision of having such diversion on the page. For user exits completely form the website, you may have to look at the web to come to a decision. Tools that can help you in such cases are Heat map tools.
Below is a good video tutorial on how to setup goals in Google Analytics with an example.
Once you have gone through the video, you will realize that Goal Setting is not a Technical task, any business owner can do it with a little understanding of Web URLs.
In case you have any queries on setting up the goals, please post it below.