If you are short on cash for headcount or other analytics projects or tools, then consider cutting back on the number one waste of cash … REPORTING. Now I have gone back and forth about whether to push this post because it can be a controversial topic. It is not the report itself that bleeds cash but the way your team’s time is used to produce something with very little value. You can determine if any report has value by asking two simple questions: Was it read? If so, then what actions were taken from it? Now, on with the post.
This article was originally posted on Forbes.com.
I have often wondered why some companies languish in their use of customer data and others feast on it. The stakes are high because data-driven companies see an average of 6% gross revenue increase and 5% in productivity, according to McKinsey research. But even more impressive, these companies are using digital data signals to listen and learn who their valuable customers are, what amount should be paid to acquire them and how to innovate to keep them.
Many years ago when I was first starting out in digital analytics I captured a piece of valuable advice from Avinash Kaushik. He essentially said if you want to be an expert in anything, read 3 books on the subject and then you will know 80% of what everyone else knows. Indeed this follows the Pareto curve (aka the 80/20 rule) and is also cited in Nate Silver’s book, The Signal and the Noise.
When faced with overwhelming information, such as a billion quickly changing data sources, I use this three-step technique. You may notice, this is very similar to testing … or Bayesian theory… or similar to cracking the Enigma code if you saw the recent movie. Here is how it goes:
Retailers, pay attention. Here is a great article from McKinsey on mobile shopping myths. I found both myth #3: Showrooming is a show stopper and myth #4: The main value of digitalization is in driving self-service relevant in my own recent mobile experience below.
Recently, I watched a woman put a snap lid top fountain drink through the security scanner at the local courthouse (I’m innocent … I was there for jury duty). The drink easily tipped over and spilled clear soda all over the belt. Yes, it was a dumb move but what really shocked me was watching her stand there for a good five minutes without offering to help clean up or apologize to the long line of people waiting in the rainy street. And I thought to myself in a Southern accent, “Oh my land! Where are your manners?”
And that got me thinking. As the line between offline and online fades, and the amount of available data swells and customers’ expectations rise, where are we forgetting our marketing manners? Where do we ignorantly cause confusion and delay and remain unapologetic? The digital customer has more power than ever. Causing offense has a clear economic impact and is not something to take lightly.
I held the small white envelope with official county seal in my hands with a mixture of dread and curiosity. It was a call for jury duty. Over two days I would be part of a pool of potential jurors who were exposed to a process called “voir dire” which means to speak the truth.
The voir dire process is slow. It involves asking layers of question of each potential juror to see whether they might hold a bias about any aspect of the case. A bias that could interfere with their ability to be fair. So I couldn’t help but wonder, ‘Could this process be improved by the clever use of data?’
Recently I found myself completely appalled at something I have rarely seen before. It was a highly profitable enterprise company that was beautifully set up for digital analytics in one business unit TWO YEARS AGO and had simply let the deployment degrade. They had not used the data as leverage to expand quality insights across the organization. They had not used it to reduce costs or optimize ad buys. They just let it rot.
So in honor of this Halloween horror, I’m going to calculate some back-of-the-envelope numbers about the cost of doing nothing or even slipping backward in digital maturity. There are lots of places an organization can get stuck in the drive to digital maturity, but for this post I’m going to focus on the foundation which is tablestakes technology.
In my last post, I talked about the science of digital analytics. Now let’s talk about the art. Analytics is as much about the art of business as it is reading data. Business context is not just about what products are launching and what campaigns are running. That is the “what” of business. It is the “why” that drives insight. For example:
Most people who are not familiar with digital analytics expect it to be self-revealing. That is to say, if I look at the data in Google Analytics or Adobe or similar tools, it will be obvious what is happening in the business. That expectation is similar to a doctor reading data about your blood pressure and temperature and knowing whether you have a healthy lifestyle. It’s directional at best. Like medicine, digital analytics is both an art and a science. So let’s first start with the science, and in my next post, I’ll cover the art.
An executive sits at a conference table, reviewing a newly released digital metrics report. She asks a few questions trying to relate business value to the numbers on the page. She finds, and perhaps you do too, that relating digital data to business value is like eating ice cream for dinner. It might look good, but it simply does not satisfy. Digital reports are often full of lightweight metrics.