When to trust the numbers, and when to trust your gut
When I first began writing my blog, I just wrote whatever I wanted. Increased branding was my ultimate goal; traffic was an indicator. I thought I knew what people wanted to learn about, but traffic never increased. I realized that what I thought would happen and what actually happens weren’t one and the same.
Often, business owners follow a “rule by gut” mantra. Instead, using data to determine what works makes it easier to recreate success and grow the businesses bottom line over time. Creating a culture of analytics means decisions are based on data, resources are efficiently allocated and executives can confidently expect growth.
So, what is the best way to integrate data into business decisions — especially marketing decisions?
Understanding the analytics
The first step is to understand the analytics. If you don’t know what the metrics mean, you won’t be able to make decisions based on them.
Google Analytics offers a great free package for measuring traffic on your site and identifying what users are doing.
Once you have a strong understanding of what the actual metrics are and how you’re tracking them, the next step is identifying which metrics are important for your business.
It’s important to have goals and know what you want to monitor. Are you trying to increase the page views to your site? Are goal completions important? Would you rather have greater referral traffic or organic traffic? These are all questions you should answer, because they determine which metrics are important to you and which metrics to ask for when making decisions.
Asking for the numbers
The most important time to ask for the numbers is when you’re allocating resources.
For example, imagine you’re going to invest in advertising online. If you’re a “gut marketer” you’ll say to yourself — “advertising works, let’s go all in.” It’s a gamble that becomes easy because of anecdotal evidence and feeling.
However, analytical marketers look at this investment differently. Their first step would be to create a test, budget and monitor the results of the advertising. They would identify the cost per new user and then compare it against other marketing channels.
Does online advertising work as well or better than other marketing channels? If it does, then it’s worth increasing the investment. Otherwise allocate the resources elsewhere.
Testing and analytically breaking down important decisions will reduce inefficiency and wasteful resource allocations.
Although an analytical culture is great, it does have a number of pitfalls. There is such a thing as being too analytical. The two biggest pitfalls are ignoring experience and over-testing.
Data is great, but sometimes it’s not perfect. If you know something works, but your test says it doesn’t, it may mean that there was an error in the test. Test again. Simply put, use your business experience to frame the data and your tests.
The second pitfall, over-testing, is easier to fall into. Not everything needs to be tested, but it’s comforting to do it. When we test something, we’re able to minimize risk, and that’s something most people instinctively want to do. However, if you test everything, your business will grow so slowly it may actually be detrimental.
Only test what you need to test—large investments and resource intensive tasks or campaigns.
When you’re in school and a teacher tells you they’re right because they’re the teacher, you hate that. Similarly, you can’t run a business with this mindset.
Being the owner is not a good enough reason to be right – prove it. Use data through analytics and testing to identify what’s working and what isn’t. When you’re empowered with analytics and understand how to track the marketing impacts online, you should know, not feel.
How are you identifying and optimizing your resources and online marketing? What have you done to make things work better? Leave a comment and let us know what you think.
Samir Balwani is Director of Acquisition Marketing at StyleCaster.com.