There are lots of really good analytics packages available on t’internet – some of them are actually quite good and most of them actually do what they say on-the-tin, so to speak. There does seem to be a belief that “analytics” will save the day and drive down acquisition costs, improve conversion rates and a bunch of other, secret-Santa-type rubbish.
The applications themselves will do nothing of the sort, they need to be used by people who know a) what the data represents and b) how to bring that knowledge to bear in an organisation’s structure. The only experts are the people who have been taught how to use the applications and, to be frank, even the most complex of the analytics systems only take a few weeks to master.
*anyone remember “hit counters” from the late 1990’s? How many bad decisions came from those little beauties?
Reasons to be cautious
The fast growth of the analytics field over the last few years shows how the market is shifting from simple PPC/CPC strategies to more complex, decision-based, thinking as companies attempt to seek competitive advantage in just a few tiny areas (Google Adwords, for example).
There is undoubtedly benefits to be found using basic analytics tools mixed in with a dose of common sense but we have to avoid defining the whole business strategy around just one element of the process (acquisitions).
Good business practice is often struggling in hand-to-hand combat with marketing departments that have recently acquired (via PPC and basic analytics) the “keys to the door”. There is always a bigger picture. In some cases the analytical data, and it’s interpretation, is so flawed as to be a liability to the medium-term survival of the business. Is this risky? You bet it is.
But it’s also an opportunity. Whilst organisations are fighting over the last 0.1% of new visitor acquisitions (and paying a heavier and heavier penalty to do this) it becomes patently clear that they are overlooking huge great areas in which improvements to the business could yield faster, easier, cheaper and more unique improvements.
You just need to stand back and look at the whole vista. If you are missing any pieces of the jigsaw then corporate amnesia can occurs when one part of the organisation makes a decision which very clearly did not account for other key data sitting elsewhere in the enterprise.
Most organisations should, but do not, run any kind of knowledge management so not only are mistakes repeated but good practice is continually replaced with bad practice in a kind of suicide cycle of ever decreasing returns. It’s pretty painful to watch and requires a dramatic philosophy change to remove the source of the addiction.
Climbing a mountain might have to be done one step at a time, starting from the bottom. Building a successful internet strategy is a whole lot easier. We can jump around trying new stuff going up and down the mountain as we please – as long as we know the journey has a point and purpose. This is the strategy.
If you take a close look at the online world you will see it is jerked around back-and-forth chasing some perceived nirvana – burning valuable resources that could be better deployed building new strategies and communicating great vision. Why?
The gulf between interpreting really useful data and a solid understanding of the business and organisational aims of the participants is dramatic. This is where traditional “Management Information” systems are supposed to sit, supporting business-level decisions with accurate, complete vision, information. This is a little harder on the web for a number of reasons:
- An exponentially larger range of information is gathered in the online world, too much for classic MI systems
- The information changes so fast, so much more information is available every day that decision criteria date too quickly
- Easy use of pure metrics (£1 in, £5 out) is so appealing at the front-end of the funnel that the real business strategy needs take a backseat to tactical day-to-day operational needs.
What’s then needed is a single system that can interpret the vast amounts of raw data collected at the front-end moderated with the softer business nuances of the customer journey, whole-of-life value, net profit and organisational good-will. What’s also needed is a clear understanding of the value that individual customers bring and how to harness this value in the most cost effective manner.
These systems are coming, most are bespoke for the moment, and will replace basic analytics.
About VITES BIG.TOE
Currently in Alpha and due for full Beta launch in Q3 2010. (B)usiness (I)nformation (G)roup – (T)heory (o)f (E)verything is a collection of modules that plug-into Connected’s VITES platform to provide end-to-end management information across the whole of a customer journey including cost of acquisition, enquiry, sale and retention as well as providing profit information and granular sales cycle information.
BIG.TOE is a major development plan and a supported programme is available under limited release to clients. If you are interested then please contact Martin Dower, CEO.