Building an optimization culture is hard and it seems that it might be getting harder. My friend Avinash Kaushik, the analytics evangelist at Google, recently shared an important stat and his observation on Google+:
Only 22% of companies have a strategy that ties data collection and analysis to business objectives. Down from 25% last year. [Source: Econsultancy Online Measurement & Strategy report http://goo.gl/OGscu]
The problem is not the tool. The problem is you and me and our management.
Think of it another way: 78 percent of companies are just hoping for success by guessing how well they are at providing their customers quality experiences. While we may all be suffering from data diarrhea, making decisions based on analysis of our metrics is just unclear, and they fear failure. Some call this assumption marketing. For over a decade, I’ve called this a symptom of accidental marketing.
One key question is why did the numbers go down from 25 percent last year to 22 percent this year? My answer stems from a simple economic theory that holds true in most marketplaces. The rich get richer! It happens in finance, it happens in SEO with the Filthy Linking Rich, and it happens in data-driven cultures. Companies that have a culture of analytics and testing seem to pull in those individual talented people who show up at the odd company and get frustrated that they have no impact or value there. I have seen this countless number of times with friends in this industry. It’s frustrating, like pushing on a rope.
When leadership’s ability to focus on optimization is dysfunctional, they keep relying on the next “big idea.” They favor long CYA meetings instead of managing to the metrics that impact their business. They continue to do business largely the way they have for the last 20-plus years, even though everything around them tells them the world has changed. Meaningful change is not just releasing a cool mobile app and launching a new HTML5 website. It’s not the medium but a management and business cultural issue that needs reexamining.
As Marc Bruns commented on Avinash’s post:
The fact is becoming an optimization culture is hard. In my experience, implementations of any kind of data-driven metrics, analytics face the hurdle of an ‘irrational exuberance bubble’ when they begin … early on it seems like it will be easy to change the world, the tools seem so powerful … but then people, politics and turf battles enter the picture; [when times get the least bit tough] management tends slips [sic] into old habits, ‘the old shoe is comfortable.’
I’ve harangued many and even written before about what it takes to build optimization into your business culture. What’s the first step?
Focus! Pick your key performance metric and get your team obsessively focused on continuously improving the marketing efforts and time spent achieving those numbers.
Web analytics industry pundits have suggested that the key to success is better investments in people and process and less on tools. That’s wonderful! Nevertheless, neither of these matter if the investment isn’t on changing culture first.
So companies bring in the tools and assign someone inexperienced to start distributing reports and they start to believe that they are data driven. Surprise! There’s no profit from having a web analytics report; you make money from making changes and experimenting based on the insights available from the data. In order to do web analytics correctly, it needs to generate a to-do list for you.
However, as Philip Walford, another commenter on Avinash’s post adds:
You’ve been scrupulously data-driven in identifying where problems and inefficiencies are located, but now you have to switch and start to hypothesise about why those problems and inefficiencies exist. Two entirely different disciplines: rare to find them in one individual, almost impossible to find them in one organisation.
It is this sluggishness of corporate metabolism to change that has allowed many in the retail industry to forfeit their sales to Amazon.com, which now dominates approximately 30 percent of all U.S. e-commerce.
Noted author Stuart Wilde says “Poverty is restriction and as such, it is the greatest injustice you can perpetrate upon yourself.” Are you condemned to be data rich but optimization poor?
I don’t think it is because companies don’t care or haven’t tried. Are the tools to blame? Partially! First and second generation tools flourished by the promises of riches to come by just tracking the data. Many invested significantly in these tools, but couldn’t find the people to support it. Now many free tools exist and more people are used to using these tools. I’ve always said get good at free and then pay. So are free tools the answer? Nope! Just because someone knows how to use the tool, doesn’t mean they can “convert” management into a data-driven culture.
It’s increasingly harder to hire truly qualified candidates; not that many exist in the first place. When my brother Jeffrey and I built our agency, we’d hire young college graduates who displayed tremendous amounts of curiosity and trained them in our processes and they were turning out insights that rivaled their high-priced MBA alternatives. Training certainly is one option, but it doesn’t work if it cannot be evangelized throughout the whole organization. It fails if all it does is make one or two optimization/analyst employees smarter, because in the long run, those employees will find work elsewhere.
Will you commit to optimization riches or will you remain poverty stricken? Isn’t it time to focus on what the numbers are already telling you?
P.S. If you are a business that is committed to driving a data driven/optimization culture, please reach out to me I have a handful of individuals looking for great opportunities to bring their talent. If you are a business that wants to become data driven and optimization focused let me know and I will see how we can help you.
I’ve been there! Even if I could prove as much as 60% improvement by just changing subject on the weekly newsletter, we didn’t change the process of creating newsletters to include a day-before A/B-test to select the best subject. Imagine what an impact we could have done if we had applied a data driven process on the newsletter content as well!
I guess companies are happy to just leave money on the table.
Amen! This is one of the most spot-on commentaries about issues facing corporate marketing online – optimization and analytics. Confession, as an SEO consultant, I’m so tired of seeing the goal to rank #1 or bring in more traffic. These companies think link wheels and buy links is working, when they are bringing in crap traffic! What they need to be investing money in is quality content that is optimized to convert those eyeballs to leads and sales!
It’s time to speed up that “sluggish corporate metabolism” and get lean and mean. It can’t be done without insightful analytics to count calories and methods for measuring the waistline, err…waste line. So much time and money is wasted by not having optimization as the core of their diet.
I’m fairly new to the Market Motive scene and have already gleaned money-making insights from you and Avinash in the webinars. Look forward to taking your course, hopefully soon!
re.
“There’s no profit from having a web analytics report; you make money from making changes and experimenting based on the insights available from the data. In order to do web analytics correctly, it needs to generate a to-do list for you.”
Luckily we came to this realization over the past few months, and we’ve had everyone at the company “buy in” and take classes on Market Motive to better understand and utilize google analytics reporting. We’re starting to learn how to identify our weakest points and run experiments on layout, content, title tags, etc. to try and fix things.
Just wait until you combine the analytics knowledge you are getting from MarketMotive’s analytics course and combine it with my Conversion Optimization course material.
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Good post, but would be better if it didn’t have to be written.. no!
I think we as consultants in this space sometimes enter into an engagement (or job) at too much of an abstract level. In my naive years I would ask clients the big question: What are your corporate goals, objectives, etc. This made heads spins, let alone set a path of huge proportions (tying Customer Service data with traffic patterns, linking CRM systems…).
So what works best: Simple – What projects are you working on now? 3 email campaigns, SEM work and a print campaign. Great. We are going to take 1 email campaign, your SEM work and print campaign … and make it better through data. Not earth shattering, not taking over the business, but a few quick wins.
Then what: Once you have quick wins you have three things 1)a story 2)momentum 3)a starting point.
Instead of focusing on turning the business around, you are showing in Crawl, Walk, Run terms how this works and foreshadows how if the process were implemented even before projects were first constructed what it could lead to.
Regarding the remark of Thomas Bosilevac . . .
You are right to focus also on the quick wins. And that’s the difficulty and challenge; to keep your eye on the long term and show (quick) results (to customers).
At this moment we’re experiencing that some customers appoint an employee to do the web-analytics, in most situations without any expericence in data. Of course on the long run customers will conclude that that’s not the right direction or get disappointed that web-analytics not delivers the insight they hoped for (and will not invest further). Sometimes it takes a year or more before the customer discovers this.
So my questions . . . how can we as consultants accelerate this process or even beter “teach” in advance the customer not to underestimate web-analytics? This is extra complicated because customers don’t want to let there employees/analysts down and your arguments as an external consultant are often “less true”
(I’m from the Netherlands and in general the US is 1-2 years ahead. I hope to benefit from your lessons learned)
How can anyone manage a business without analytics?
Its not only vital in online driven campaigns, but every critical aspect of a business should be graphed.
Web Data collection and conversion optimization are recent fields and the lack of training/formation (out of MarketMotive and a few universities) is clearly why! Out of these specific certifications, no one is clearly advocating for it at a… large scale for the next HIPPO generations (e.g. part of any marketing MBA-level). It will take time for companies to change their mind. In the meantime, the ones that understand these needs will be successful
Web Data collection and conversion optimization are recent fields and the lack of training/formation (out of MarketMotive and a few universities) is clearly why! Out of these specific certifications, no one is clearly advocating for it at a large scale for the next HIPPO generations (e.g. part of any marketing MBA-level). It will take time for companies to change their mind. In the meantime, the ones that understand these needs will be successful
I love the “pushing on a rope” analogy. That’s such a perfect way to describe the frustration analytics professionals experience when their recommendations are not tried or tested.
Data Rich, Optimization Poor exists not only in US of A but also in emerging internet economies like India where I work
. HIPPOs just dont like implementing anything based on data at all
Great article, I was wondering how to track calls that come from the web to the phone and how to optimize a website from that?
Managing a business without any kind of analytics is like managing without an accounts departmentent!
Statistics need to be gathered for everything your company does online with campaigns etc. AND analysed AND acted upon. Its more than a critical aspect of your business!