Answer: Losing sight of the single biggest issue on their way to growth.
Here’s what my years of experience in consulting and auditing web business comes down to- challenging the biggest mistake many businesses make while analysing data. My point in writing this piece is also the same and I believe resolving this one can resolve many others you face daily trying to get the ‘whole data thing’.
I categorize it as the directional issue – wrong direction or lack of it. Better explained as the inability to understand:
- Data to track / collect
- Insights to look for
- Location of right data
Let’s understand what I mean with an example.
Q: What do you do when you see spiraling marketing / advertising cost? Do you cut down activities that’s costing you the most?
If you said yes then welcome to the big club. You should realize cost is not more important for business than profit. Cost does not matter much if profit is many times over. Increasing profit is a forward looking attitude , while cutting cost is often looking backwards. If you still believe cost then you should find another job. Otherwise – know that thoughtless cost cutting could be dangerous. It could be that the costliest activity is also getting highest traffic to your website or your store. Let us look into web analytics and our marketing activities online.
A study of Acquisition reports within Google Analytics (with all business goals properly set up) could clearly show all sources of traffic (Direct, Social, Referral, Ad or Organic) and corresponding rate of goal conversion. Also don’t miss relating total goal volume achieved as that will give a better performance assessment . Add to this an analysis of different campaigns you are running- emails, AdWords, Facebook ads with properly set up campaign tagging. Together these will uncover all those activities that has least return, least conversions or even user session on your website . All of these contribute to acquisition cost but has least impact of overall sales. These should be your target. These are potential areas to cut cost on. So take a deeper dive- verify your finding and take an action.
Getting back to where we started – the central idea of this analysis is to reduce cost but without impacting business growth. Similarly for every analytics question , I feel its is worthwhile understanding the biggest issues that’s stopping growth.