Analytics Isn’t Reporting

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.

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:

  1. 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.

  2. 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.

  3. 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.

  4. 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.

White House ‘Big Data’ Review Recognizes Innovation and Self-Regulation

When the White House announced its intent to study the rise of “Big Data,” as a citizen, I guessed there might be a lot to say about government surveillance, public safety and terrorism, in light of Snowden. As a consumer, I suspected there might be a lot of attention to data breaches, in light of the recent Target incident among others. As a working individual whose livelihood depends on data access and use for more relevant marketing, I was nervous

When the White House announced its intent to study the rise of “Big Data” and its impact on business, commerce, government and consumer’s everyday lives, with privacy protection as an underlying theme, I have to admit I was bracing myself.

As a citizen, I guessed there might be a lot to say about government surveillance, public safety and terrorism, in light of Snowden. As a consumer, I suspected there might be a lot of attention to data breaches, in light of the recent Target incident among others.

As a working individual whose livelihood depends on data access and use for more relevant marketing, I was nervous there might not be a practical discussion of how information sharing and privacy protection can (and is) successfully provided through a combination of peer regulation, enterprising technology and sector-specific legal regulation where information protection and security is niche-based and designed to prevent harm from data error or misuse (credit, financial, health, for example).

Then the report, titled “Big Data: Seizing Opportunities, Preserving Values” (pdf), was released.

As a citizen, I was left wanting. Government surveillance of law-abiding U.S. citizens is parked for another report, another day. Some reforms have already been announced. Perhaps this is a blessing—there never should have been a link made between government spying and private sector use of data for commercial purposes anyway.

As a consumer, I was glad to see a call for a single national data breach notification standard. A few years back, I received several notices of “my” data being breached in a few months’ span—two of which offered a year’s worth of identity theft and fraud protection (which I continued to purchase on my own). Whether by luck or design, those notices have declined in number—I’ve had none in the past year. As I hear and read about more recent major data breaches, I haven’t been directly affected (to my knowledge), and maybe—just maybe—some organizations and brands in which I’m involved have gotten better about security. (Indirectly, we all pay for fraud—in higher prices for products and services, insurance, bank fees and the like—and perhaps in our collective loss of trust and carefree.)

As a marketer, I have to say I was happily surprised at the clear-headed conveyance of facts and reporting of opinion in this report—and, importantly, the steer-clearance of political grandstanding. I will leave it to our trade associations to comment on the policy recommendations, but as one our industry’s leading practitioners stated in Adweek, “If anyone of my clients wants a 101 on big data, I’m going to send them this report. This report is very relevant because a lot of what drives this business is programmatic media buying. There are millions of places to advertise on the Web, so an algorithm will decide what your likely audience will be.”

The report either cited or recognized such industry initiatives as the Data-Driven Marketing Institute’s “Value of Data Sharing” report, the Digital Advertising Alliance (disclosure, a client) and its own recent research on data sharing’s role in increasing advertising’s value, as well as DAA’s YourAdChoices.com site and consumer opt-out program for online interest-based advertising. There was care to note—even in the report’s title—that innovation is one of the benefits made possible by big data, and that this economic and social value needs to be enabled, if not fully supported and facilitated.

The report did raise red flags about commercial redlining, eligibility issues connected to employment, healthcare, finance and insurance, and data security (as noted)—but these important areas for consumer protection largely are already regulated, and even have industry backing for further regulation in certain areas such as breach notification. Most of these topics don’t have much to do with smarter marketing, even if some privacy advocates and academics hypothesize about that stretch.

Where do we go from here? The report did make several policy recommendations—and while there were some seeking to codify in law Fair Information Practices Principles (a Consumer Privacy Bill of Rights), there was no attempt to call for an omnibus privacy protection law that treats all data and all data usage the same. If you haven’t had the chance, give it a read—I actually learned from it, and avoided tears and rage.

USPS Talks Sustainability and Its Performance Returns for 2011

The United States Postal Service (USPS) recently released its fourth annual report on sustainability practices and performance. The document serves as a blueprint for any company or brand in the marketing field on how to report progress and hurdles toward improved triple-bottom line performance (financial, social and environmental, being the three bottom lines), and to illustrate the business case for doing so.

Our mantra is ‘leaner, greener, smarter, faster.’ To achieve these goals, we’re adjusting the size of our workforce and delivery network, eliminating waste, reducing energy consumption and encouraging our employees and customers to conserve. When the Postal Service is more efficient, everyone benefits.
—USPS Postmaster General & CEO Pat Donahoe, USPS 2011 Sustainability Report

The United States Postal Service (USPS) recently released its fourth annual report on sustainability practices and performance. The document serves as a blueprint for any company or brand in the marketing field on how to report progress and hurdles toward improved triple-bottom line performance (financial, social and environmental, being the three bottom lines), and to illustrate the business case for doing so.

Transparency is the hallmark of sustainability reporting, just as it is for financial-only reporting. According to the report’s summary, the USPS adhered to version 3.0 of the Global Reporting Initiative (GRI)—”the most widely respected international reporting standard for public sustainability performance disclosure”—for the report’s structure and detail.

For marketers, the report highlights some valuable information and insights on USPS operations, and what opportunities and challenges lay ahead for direct mail. Consider these findings, quoted in first person from the report:

  • RECYCLING—Our recycling efforts had a banner year with $24 million in revenue. We recycled more than 215,000 tons of material in 2011. By using our distribution network in new ways, improving contract services and working with recycling vendors to maximize revenue through economies of scale, we are starting to see results. Strong recyclable commodity pricing during 2011 played a part in our record revenue earnings, but the real story is a long-term strategy of continuous improvement. Also, by using our existing transportation network, we avoid fees from recycling vendors who would make costly stops at each local office. In FY 2011, more than 12,000 facilities participated in the backhaul recycling program, recycling more than 215,000 tons of mixed paper, cardboard, plastic and scrap metal—and earning $24.4 million in recycling revenue. We also encourage customers to recycle by asking them to discard unwanted mail in Post Office lobby recycling bins, instead of our trash cans. Our “Read, Respond and Recycle” mail lobby campaign was launched in 2009. More than 10,000 locations now offer customers lobby mail recycling. This effort continues to reduce waste being sent to landfills.
  • FACILITY ENERGY USE—Our progress toward reducing facility energy use 30 percent by 2015 continues to exceed our annual targets despite a slight increase in facility energy use this year. Since 2003, the Postal Service has reduced total facility energy use by more than 25 percent, nearly the amount of energy used by 90,000 average U.S. households in a year. USPS also reduced energy intensity, which is energy use per square foot of building space, by 22.4 percent in the same time period.
  • CARBON ACCOUNTING SUPPORT FOR MAILERS—We have been preparing a greenhouse gas emission inventory every year since 2007, and we now offer USPS BlueEarth, our new carbon accounting service so our business customers can determine their own carbon footprint for the mailing and shipping services the Postal Service provides. Postal Service business customers are increasingly requesting information about the greenhouse gas emissions associated with USPS services. The calculator [introduced earlier in 2012] uses proprietary USPS methodology to calculate greenhouse gas (GHG) emissions and takes into consideration the type of shipping or mailing product, size and weight, how it’s processed and transported and the distance the package or envelope travels. Energy awareness creates a culture of conservation at USPS.
  • RECOGNITION AMONG GOVERNMENT AGENCIES FOR GHG REDUCTIONS—We were awarded Gold status by The Climate Registry for leadership in reducing GHG emissions by more than 5 percent. Our overall target is to reduce GHG emissions 20 percent by FY 2020 using FY 2008 as a baseline. The Postal Service is among the first of the Registry’s more than 400 members and the first government agency to achieve the recognition. To report our GHG emissions, we are compliant with established protocols set forth by The Climate Registry, the International Post Corporation and under Federal Executive Order 13514 (of President Barack Obama, 2009).
  • LEADERSHIP TRAINING AT USPS INCLUDES SUSTAINABILITY’S BUSINESS CASE—The Postal Service’s leadership programs are designed to develop high-performing leaders to meet the changing needs of USPS into the future. They include a demanding curriculum offered over a six-month period, with classroom instruction and mentoring by existing and future executives on key topics in business finance, project management, leadership principles and presentation skills. The programs culminate with a business case presentation. The 2011 classes were challenged with creating a “sustainability business growth model” to improve USPS waste reduction and recycling and to develop strategies to engage employees in Green Team initiatives. The participants used their new understanding of sustainability to present a business case of their findings before an executive review panel chaired by Chief Sustainability Officer Tom Day.

Additionally the report documents transportation energy costs, as well as water use and conservation (arguably the next focused area for sustainability reporting after greenhouse gases).

Another element to postal sustainability, from a product development perspective, is the USPS’s focus on mail-back programs, working with product manufacturers and others on the creation and execution of services to return used goods (computers, printer cartridges, batteries, etc.) so they can be safely dissembled, disposed or recycled: “Postage‑paid mail envelopes are available in 1,600 Post Office lobbies. These envelopes can be used to ship small used electronics, such as cell phones, ink jet cartridges and digital cameras, to a centralized recycling center, where they’re broken down into usable parts. During 2011, customers recycled 185,000 items—about 22,000 pounds of material. Since the program began in 2008, more than a million electronic devices and printer cartridges have been kept out of landfills.”

There are skeptics—and some responders to this blog—who maintain that the Postal Service can’t afford to be chasing “go green” efforts when its financial life is on the line. Respectfully, I counter that it can’t afford not to! I commend USPS labor and management in their understanding—and leadership—in recognizing waste as a cost, and efficiency as a gain. Every postal customer should thank USPS and its green teams for this continued effort toward sustainability, in all its forms.

Here is the link to the full report: http://about.usps.com/what-we-are-doing/green/report/2011/welcome.htm

Mobile’s Role in the In-Store Shopping Experience Growing, Survey Finds

I came across a very interesting report this week from White Horse, a digital marketing agency based in Portland, Ore. The Future of In-Aisle Mobile: A Framework for Consumer-Centered Innovation found that 84 percent of smartphone users have engaged in some type of in-store mobile activity related to shopping.

I came across a very interesting report this week from White Horse, a digital marketing agency based in Portland, Ore. The Future of In-Aisle Mobile: A Framework for Consumer-Centered Innovation found that 84 percent of smartphone users have engaged in some type of in-store mobile activity related to shopping. I think this is a pretty high percentage.

The report examines how consumers use smartphones to supplement in-store shopping while also offering tips on how retailers can take advantage of this behavior. For the study, White Horse conducted 13 videotaped shop-along trips to retailers including Anne Taylor LOFT, Best Buy, Sephora and Bed Bath & Beyond. It then conducted a survey of 390 U.S.-based smartphone users to validate the field research.

The 16 percent of respondents who haven’t used their smartphone for shopping tasks in-store cited very consistent reasons for not doing so: most haven’t found a utility that allows them to shop and gather information in-aisle easily, and many want a speedy shopping experience, according to the report.

Electronics stores are where shoppers are most likely to use their smartphone to aid their purchase decision (79 percent), followed by discount retailers (67.5 percent), department stores (48.6 percent) and supermarkets (42.6 percent).

The report also found that while price-checking is the most common activity for mobile shoppers (72 percent of respondents report doing so), it’s by no means the dominant activity. Searches for product reviews and recommendations (67 percent), and seeking a retailer’s store information (61.1 percent) followed closely behind.

What do you think of these findings? Surprised by them at all? Please leave a comment below.

Most Twitter Users Follow Brands

A new report from Edison Research’s Arbitron/Edison Internet and Multimedia Series, Twitter Usage In America: 2010, contains all sorts of interesting Twitter facts. It presents three years of tracking data from a nationally representative telephone survey of 1,753 Americans conducted in February 2010.

A new report from Edison Research’s Arbitron/Edison Internet and Multimedia Series, Twitter Usage In America: 2010, contains all sorts of interesting Twitter facts. It presents three years of tracking data from a nationally representative telephone survey of 1,753 Americans conducted in February 2010.

A key finding for marketers: Fifty-one percent of Twitter users said they follow at least one brand on a social network, according to the report. That number drops to just 16 percent for users of all social networks.

What’s more, 42 percent of Twitter users said they use the tool to learn about products or services, and 41 percent said they use it to provide opinions about them. Twenty-eight percent said they use Twitter to look for sales or discounts, 21 percent use it to purchase products or services, and 19 percent use it to seek customer support.

Here are some other key findings from the report:

  • Awareness of Twitter has exploded from 5 percent of Americans age 12 and over in 2008 to 87 pecent in 2010. By comparison, Facebook’s awareness is 88 percent.
  • Despite near equal awareness, Twitter trails Facebook significantly in usage: 7 percent of Americans (17 million people) actively use Twitter, while 41 percent maintain a profile page on Facebook.
  • Nearly two-thirds of active Twitter users access social networking sites using a mobile phone.
  • Blacks make up nearly one-quarter of the U.S. Twitter population, twice their share of the total population of the country. In contrast, whites make up more than 69 percent of internet users, but about one-half of Twitter users.

The report said that high usage in the black community could be related to the mobile nature of Twitter. While many users update their status with a PC, mobile devices are a major conduit of microblog posts. Research shows that blacks and Hispanics are both more likely than whites to use the mobile web, especially among younger users.

Pretty interesing stuff. Were you surprised by any of these findings? If so, please leave a comment below.

Paid, Organic Search a Big Part of DM Budgets

This didn’t really surprise me. But it did confirm what I and colleagues from sister publications Target Marketing and Catalog Success have been hearing from readers this year: More direct marketers are shifting marketing funds away from print and to the Internet.

This didn’t really surprise me. But it did confirm what I and colleagues from sister publications Target Marketing and Catalog Success have been hearing from readers this year: More direct marketers are shifting marketing funds away from print and to the Internet.

I’m referring to a recently released response rate report from the Direct Marketing Association, which showed that SEM and SEO combined to account for 33 percent of direct marketing budgets. Paid search makes up less of that 33 percent, however — just 8.2 percent.

This report lets marketers compare their own performance with success metrics for six media — direct mail, catalogs, inserts, telephone, e-mail and paid search.

The report also looks at DM budget allocations by channel and changes in budgets, as well as attitudes toward such new media as SMS (texting), social networking, podcasts, blogs, RSS feeds, wikis, online video, user-generated content and virtual worlds.

Other findings from the report include the following:
· 35 percent of marketing budgets are allocated to direct mail, although this number will likely shrink in coming years as digital media take an increasing share of marketing spend;
· response rates were higher than in previous years, perhaps as a result of better list management and more sophisticated targeting; and
· the catalog and retail segment outperforms other industries in direct mail response rates.

The report was conducted through a survey e-mailed to DMA members in Dec. 2008; 1,175 responses were received.

I may be biased, given the publication I edit, but this seems like the wave of the future. What about you? Do you find any of these statistics surprising? Let us know. Post your comment below or send it to me at mcampanelli@napco.com.

The Future of DM: It’s Interactive

Earlier this week, the Direct Marketing Association released a qualitative report on the future of direct marketing, concluding that it will most certainly be interactive.

More on how the report was put together in a moment. Bottom line: Customers will be in control, analytics will rule and digital marketing will increase.

Earlier this week, the Direct Marketing Association released a qualitative report on the future of direct marketing, concluding that it will most certainly be interactive.

More on how the report was put together in a moment. Bottom line: Customers will be in control, analytics will rule and digital marketing will increase.

The DMA asked more than 35 well-respected direct marketing leaders — including copywriting maven and columnist Herschell Gordon Lewis of Lewis Enterprises, Alan Moss of Google, Jeanniey Mullen of Zinio, and Akira Oka of Direct Marketing Japan — their opinions on the future of direct marketing and their industries/segments. The report provides insight into what these leaders think about the short- and long-term future of direct marketing.

Specifically, they were asked the following questions:
* Where do you think direct marketing will be in five years? Ten years?
* How should direct marketers prepare for these changes?
* How will your industry/segment change during this time?
* How is the state of our nation’s economy impacting your industry/segment?
* How do you think the election of Barack Obama will affect the direct marketing community?

The report revealed the following about the future of direct marketing in the next five to 10 years:

Customers will be in control. Technology has given consumers myriad choices, options and resources that let them find what they want and skip over what they don’t. Technology also will continue to advance, opening up great opportunities for both consumers and marketers.

Measurable and accountable marketing will increase. The health of the economy has made marketers think and rethink about where to put each dollar of their marketing budgets, according to the report. As a result, allocations will move away from traditional channels such as catalog and direct mail into digital channels, which are intrinsically more measurable.

Traditional DM will decrease; digital marketing will increase. Environmental pressures, postal rate hikes and the potential for a do-not-mail bill will result in a decrease in both direct mail and catalog volume. Digital has many advantages over traditional DM, such as its ability to track real-time measurements; create more targeted, relevant and personalized messages; and reach new generations of consumers who were born with a mouse in hand.

Many channels, one message. It’s not all bad news for direct mail and catalogs, though. Integration always has been a key component to direct marketing and will only increase in importance as the number of viable channels increases, the report says. There also will be a movement from single channel campaigns to more integrated, multichannel strategies. These campaigns have the same message across multiple channels, allowing marketers to reach more customers, who have more opportunities to respond via the channel of their choice.

While the death of direct mail will not come in 2009 — or any time in the near future — interactive marketing clearly is growing in importance. If you’re not participating in any interactive marketing programs now, it’s time you start. Your future depends on it.