Is too much data a blessing or a curse?
With the rapid emergence of IoT, and the ability to overlay and integrate current data sources, the amount of data available for decision making has never been greater. Data can be like a waterfall. It’s a question of finding that one drop of information from it that can change the business.
With that in mind, there has been a corresponding increase in the need and use of data by senior management personnel in running their businesses. This is quite evident in the digital marketing analytics arena as witnessed by the explosive growth in companies servicing this area that enable marketers to find that proverbial single drop and explain the findings to management who generally have limited attention spans.
Long gone are the days of relying on gut feel for major decisions. Although this way of conducting business will never entirely disappear, as sometimes decisions need to be made on the future direction where data sets are not available for analysis, it is now the exception rather than the rule. More importantly, even decisions impacting the future can be rationalized by the use of predictive modeling.
Like anything else in business, in order to be effective you need a plan. The same holds true regarding the use of digital marketing analytics to manage and grow your business. Remember, however, that analytics are just tools and you need to know what you’re doing in order to be effective.
At the outset, you really should look at developing an overall plan with a documented process flow for everything you’re doing regarding data and analytics. This might include:
A description of what data will be required.
A complete determination of what data should be collected, its value, and use should be key factors for consideration. This should encompass many marketing areas including customer acquisition, product marketing, website data, customer journey data points, and customer retention. It should entail an analysis of each customer channel, as well, to ensure that the scope is all inclusive.
Where the data will be sourced from?
Data within organizations often resides in multiple silos and in many forms. Although data aggregation has become more streamlined over the past decade, in many companies data might still reside on the desks of those analyzing it in the form of Excel spreadsheets. Often times, these spreadsheets are vastly different and the compiling of information from them can be very tedious.
How it will be sourced and scrubbed to ensure its accuracy?
An analysis should be conducted as to the methodology that will be used to source it and “scrub” it to ensure its accuracy. Inaccurate decisions can be made if data isn’t “clean” and truly reflects what is going on. I have seen situations where personnel will sometimes provide “seat if the pants” data back to management just for the sake of meeting a metric that must be met for their performance review and subsequent pay raise or bonuses. Often times the numbers that have been fudged are deemed as accurate and it isn’t until sometime in the future the inaccuracies are discovered after further analysis due to issues with the business operations.
What tools will be utilized to manipulate the data?
There are a plethora of tools out there for manipulating data. The question you should ask yourself is what is currently working for your business? Is it really necessary to go out and source new tools that might end up sitting in the proverbial software graveyard? Wouldn’t it be better to look at outsourcing this function to a company such as IBM, which has many tools at its disposal for the efficient manipulation of data. Furthermore, if you lack the in-house staff to efficiently manipulate it, why not consider outsourcing it to an company that has expertise in this area and a stable of highly experienced personnel who can be “rented” to facilitate it. Again, IBM comes to mind. It just doesn’t make sense to hire full-time employees for something which isn’t something which is done on a daily basis.
How will the analysis be done and who will conduct it?
There’s always the how in looking at a process. You’ve manipulated the data, now how are you doing to analyze it? In almost all cases, with the exception of smaller firms, those sourcing and manipulating it, will not be the ones who should be or will be analyzing it. These individuals generally lack the overall marketing acumen to really understand what they are looking at and how it can impact the business of the company. An example might be someone off-shore analyzing data for Black Friday. Without any knowledge of the importance to a retailer in the U.S., there might be oversights in certain key areas which could negatively impact the business.
Therefore, it is incumbent upon management to ensure that the analysis always be done by a qualified individual or team who really know what they are looking for. The analysis should not be done in a vacuum and guidance should be given regarding what conclusions management is seeking.
What format will be used to report it?
Data can be reported in multiple formats. It can be as simple as reporting out to management with embedded pivot tables on Power Point presentation slides. It can be more complex given the business requirements. Nevertheless, it should be visual and appealing, concise, and to the point. There is no room for fluff.
Perhaps the best method for reporting would be in the form of a dashboard. It can not only be used in the initial presentation, but form the basis for an ongoing reporting mechanism for effective decision making.
Who will review it and what actions will be taken?
Finally, a determination needs to be made as to the individual (s) who will be responsible for reviewing the analysis and what actions will be taken as a result. This whole process is time consuming and expensive for a company. Why go through this entire exercise and just sit on the data without acting on it? What are the next steps that will be taken as a result of what has been reported? A predetermination of this based on certain KPI criteria that is necessary for managing the business should be outlined and documented, so that quick data-based action can be taken.
Data is now an ever more important part of the business process, but needs to be handled with care and sophistication. Data can be used for effective decision making resulting in positive contributions, but if not properly analyzed and tested can lead to many false positives that can negatively impact the business. The correct deployment of digital marketing analytics and the corresponding tools can help to improve the success rate and mitigate possible issues for management and growth of your company.