Today, virtually all organizations have challenges in effectively leveraging analytics to drive business performance.
Odds are pretty good that when you read that statement, you thought of at least one example in your organization. Perhaps you thought about the systemic contribution that analytics is making or a frustration you’ve had with analytics performance. If so, you’re hardly alone.
Here’s my home base for thinking about “analytics” in your organization.
“The promise of marketing analytics isn’t esoteric, or abstract — it’s fundamentally simple — analytics generates evidence of problem or opportunity that can be used to drive a specific business impact.”
Yet marketing analytics all too often fails to live up to its full potential. When it comes to the Web, almost a decade after the advent of mass adoption of Web analytics platforms like Google Analytics, engagement and conversion rates are still struggling to make methodical progress forward, and bring the business to materially greater profitability.
One of the biggest errors in strategy is the inadvertent substitution of “reporting,” or even “dashboards,” for a robust analytics process. It helps to first appreciate how subtle that difference is and why it happens:
Analytics Is Interesting. Analytics can be intellectually stimulating, but some individuals and organizations spend too much time in the rapture of how interesting all that data can be. I was recently at an event where a smart young woman had a name badge on that said “I love data” below her name. I was tempted to write “I make money with the data” under my own.
While I’ll be the first to express a life-long affair with the database and discovering “interesting” things in the data, that’s just not enough. So we have to monitor when analytics isn’t producing the evidence we need to affect change and deliver a business impact. While that can take a tremendous amount of work, the purpose itself must remain clear to create value.
Reports Don’t Always Have the Right Questions Behind Them. Most of us came up in business generating and reading reports. I confess that I remember craving a report we used to call “the blue book” (if you still remember paper). I looked forward to every week when I ran my business line off of it in a large company that razed many a forest generating blue books. Thankfully, they email them now — but these reports are the same static, one-dimensional view of the business, many years later.
The problem comes when we see our “standard reports” as the answer, even if the question we should be asking has changed.
When you’re dealing with fickle consumers, and infinite choice is a click away, those questions sometimes change faster than “reporting standards” can realistically keep up with.
The Relevancy Is Gone. Better than 80 percent of the time, I see marketing organizations with ample “stats” on their historical activity — yet they often fundamentally lack a strategic big picture and framework to consistently improve marketing and business decision-making. Frequently, the same organizations struggled with aligning the technical implementation of analytics and metrics required to drive business growth.
Continuous Business Improvement Sometimes Requires a Cultural Shift. Cultural shifts of any size aren’t trivial, of course. I recently attended an all-day digital commerce strategy summit at a large brand I’ve done strategy work with during the past year. Dozens of staff, vendors and executives attended. The ultimate revelation for some of these executives who made the six-figure investment in the event was, “this requires patience, and is very methodical and testing-based” — it took a huge amount of effort, resources and time. To the credit of the executive who sponsored this event, a necessary cultural shift was recognized. While all in attendance knew intuitively about “test-optimize-learn” and had a large investment in their analytics software platform — she recognized that her organization was playing catch-up culturally — an achievement in itself.
5. Prioritization Is Key. Many large and more traditional organizations have very deep roots in a task- and reporting-based culture. This stifles Data Athletes from doing their jobs. Prioritization is key. As the old saying goes, “If everything is a priority, nothing is a priority.” Executive sponsors need to make choices on where to dial effort back; focus can then be applied to build a point of view based on evidence, and the opportunity to create and discover the context of opportunity and problems.
Forward vs. Backward Analysis.
Very frequently, I’ve helped organizations that started analytics processes or programs by looking “backward” at tactical reports; these reports can only show if a past tactic has or hasn’t worked. You cannot tell if a different tactic or mix of tactics would have done better, and by how much. Worse yet, the very volume of these “reports” often obscures the bigger picture. The solution … Look forward.
Analytics Should Be Forward-Looking. It’s driven not only by analyzing the past, but by creating a framework for planning and creating future performance. In other words, what to test, how to test it, and how to use the results of those tests to drive continuous improvements in the business.
In short, analytics done well creates visibility into what you should be doing and suggests the delta with what you are currently doing. Think about the aforementioned necessity for prioritization — Analytics done well helps you set those priorities.
Analytics professionals and and the executive team must all work together according to one principle:
Analytics is the process of identifying truths from data.
These truths inform decisions that measurably improve business performance.
Analytics Must Be Purpose-Driven.
Here’s a simple approach to create focus and align the specific implementation of analytics to serve you and your business growth:
- Your business’s Purpose drives specific Business Objectives.
- Those Business Objectives, in turn, inform Goals.
- Your Goals are tracked via KPIs.
- The KPIs are continuously compared against Benchmarks.
It’s easy to dive into the weeds, get lost in the data, lose patience with the process, and begin a bottom-up approach. This deceptively simple framework I’ve suggested will help you take a top-down approach to analytics that ensures you are measuring the right things — correctly. When you do, you will become a true analytics-driven organization.
Doing so will help your organization grow faster, more consistently and reliably — and that makes for a valuable and happier organization. Be a Data Athlete, not an analytics nerd — and you’ll make all the difference in your organization.