I’m at the eMetrics Summit here in San Francisco and it’s struck me how passionate people here are about data. But it isn’t any ordinary data they’re passionate about reflecting on. It’s data that they manage to put some sort of context around. Context turns that data into information and as one speaker so eloquently put it, “with robust analysis and good controls we can turn that information into actionable insight.”
The keynote speech today was by Tom Davenport author of Competing On Analytics – The New Science of Winning.
He opened by admitting he was no spring chicken, certainly not hip and that his children would not befriend him on Facebook. But what he’d noticed was, that as the conference had grown over the years, he'd found that there were more and more people like him attending. What he was getting at was web analytics was finally no longer the preserve of the young hip "web crowd" and that it was becoming more and more mainstream.
The premise of his speech was taking a look at how big businesses were not only using analytics to understand user behaviour on their site and increase sales, but they’re now using it to compete in their respective markets and not just online either.
Real analytics should be where we optimise websites and businesses based on a statistical model, where we understand why users are behaving the way they do, enabling us to forecast and be able to say what the website or business should actually look like in the future.
He argued that businesses should make analytics and fact-based decisions a key element of their online strategies. In other words using data gleaned from analytics is a must, but decisions should not be made unless they are backed up by the outcomes of that data, and not just a "gut feel" approach.
This online approach has thrown up all sorts of new ways to do business offline too. The way we analysis, segment and organise information from the web can be applied to offline business enablement too.
He cited Harrahs, Marriott, Capital One and Tesco as perfect examples of how companies have integrated analytics into a multi-channel approach. They use loyalty, service, web analytics, revenue management, promotions, online shopping, call centres and branches to glean information and paint a very real picture of not only what is being done now and in the past, but also what should be done in the future.
He said that coupon redemption in the US is less than 1%, however Tesco, using its customer data via loyalty cards, manages to get 30-50% of its customers back into the store to receive discounts on products targeted to them.
So how do these big companies do it?
Well they have three main traits:
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They capture the data.
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They are enterprising, centralising expertise and applying a multi-channel strategy for a multi-channel organisation.
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They have great leadership – the fervour for actionable analytics filter down through the company from above.
To round off he gave some "must do's" in order to stay ahead of the game in this brave new world:
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Develop a test and learn culture
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Think “multi-channel analytics”
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Find unique metrics relevant to your business
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Stop commodity reporting
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Spread the analytics gospel around your organisation
Of course you don't need to have a market cap of several billion dollars to apply these tips to your own business.
Internet analysis tools can teach us an awful lot about what kinds of business decisions we should be making.
A simple report on potential search traffic while researching for a PPC campaign can tell you much about how to get people quickly and efficiently to your site. Taking a look at the demographic segments interacting with your homepage can give you incredible insight into the age, gender and geographic location of your users and you may be suprised what that picture really looks like.
With a few choice data decisions you can compete, you just have to make time for it!