Analyze This! (Building an Analytics Culture)

Note: This post was archived from the Infusionsoft Blog. More details here.

Bar Graph TrendLast week, I really needed to get out of the heat here in Arizona. Its just ridiculous! So, I took a couple guys on our marketing team and we headed to San Jose for the Search Engine Strategies Conference.  The weather was awesome and we had breakfast each morning at a great little 50’s cafe called Peggy Sue’s.  It just doesn’t get better than that. But it did.

The conference was amazing!  Aside from learning a bunch of cool search engine techniques, I picked up some great higher level strategy tips and learned about some great free tools.

The thing that hit home most with me was the idea of Creating an Analytics Culture. As I’ve thought about this, I’ve come to some conclusions about how marketing decisions are made most of the time and how to do them right.

Problem #1: Gut Reaction
People make decisions based on their “gut” instead of data.  Its called a “gut reaction” because its reactive instead of proactive.  Although many entrepreneurs have been very successful following their gut, the vast majority lose.

Problem #2: Beware The H.I.P.P.O
The H.I.P.P.O is the “highest paid person’s opinion”.  Often times the H.I.P.P.O. sends everyone scrambling because of his/her “gut” feeling.  In order to not get on the H.I.P.P.O.’s bad side, people do as they’re told, even though they know it might not be the best thing.  Only data can help you here.  If you’re the H.I.P.P.O, request data.  Then you can send everyone scrambling in the right direction.

Problem #3: Blind Anxiety
The H.I.P.P.O. and other higher ups will rightfully get very anxious about the marketing budget as long as they can’t see the data.  If you want them to get off your back, and let you do what you do best (or help you do it better), and let you make decisions based on data, you have to give them the data.

Problem #4: Data Overload
When providing data to the decision makers (or when looking at it yourself), don’t get stuck in unimportant things.  These days, we have access to every little piece of data you could possible want.  You can spend weeks diving into the data in your web analytics program only to come out with more questions than when you started.  Keep it high level.  Focus on what’s important and what you can impact now.

Problem #5: Lack of Manpower, Will-Power, or Both
You really need to dedicate a person to be the analyst.  If you can’t hire a full-time analyst, find someone in your organization that can do that job.  There’s no excuse to not be basing your marketing decisions off of good data.  If you don’t have the data its because you don’t have a person assigned to be the analyst and/or you don’t have the will-power to make it happen.

You might be able to tell, but I’m talking from experience here.  We’re no different than anyone else and sometimes anxiety and “gut feelings” compel us to act.  And, Clate (our CEO & Co-Founder) has rightfully stated that there are some things that can’t be measured — you have to follow your gut on those.  But there are a few steps you can do to ensure you’re building an analytics culture and you’re making smart decisions based on data.

Solution #1: Create an Executive Dashboard
Give yourself (or the H.I.P.P.O.s in your business) a high level dashboard of your numbers that can be auto-generated and reviewed once a week.  Don’t let it get too detailed, but provide enough info for it to be meaningful.  I recently created a dashboard report using the Google Analytics API and connecting to our Infusionsoft database.  The end result is a one-page report that shows our weekly and monthly website traffic trends, main sources of traffic with details, top referring keywords, our sales funnel showing conversion rates from site visitor to opt-in to demo to free trial to new paying customer, marketing expenses with results, cost per lead by leadsource and a summary, as well as any updates and new findings.  This report is sent to our executive team each week to keep them apprised as to our progress. (How’s that for transparency? We do it, and live it just like you.)

Solution #2: Don’t Rely On Automation
That sounds like heresy coming from me.  Of course you need automation, and you’ll definitely want to rely on Infusionsoft’s automation power if you truly want to grow your business.  But, when analyzing the data in your business, don’t rely on the automated reports such as the Executive Dashboard I just mentioned.  That’s good for a high level view.  But, you need to dedicate someone to digging in and finding the nuggets of info that are hidden beneath the overall trends.  Those hours of digging in the data are often when flashes of insight come (data is knowledge).

Solution #3: Demand Discipline
Its really hard to stop yourself or others from going haywire and changing things all the time.  Demand discipline from yourself and others to slow down enough to gather data and make smart decisions.

Solution #4: Always Be Testing
Tools like Google Website Optimizer and Infusionsoft can help you easily test your website, your message, your marketing tactics so you know what’s working and what’s not.  Knowledge is power and its best obtained through continuous testing.

Solution #5: Do Live Tests
Don’t just rely on automated tests.  Dedicate a small budget to get a few random people (or bribe your friends) to sit down and walk through your site or your marketing materials and give you their honest & open opinion.  Ask them questions to make sure the message you want is getting across.  Let them navigate the site on their own and see if they end up taking the calls to action that you want.  Take detailed notes.  Give them a cookie when they leave.  Don’t do just one user test.  You need to do enough to get a good sampling.  Make sure the people you use to test your site & your marketing fall into your target market.

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Parting Thoughts
Luckily we have some really smart H.I.P.P.O.s here at Infusionsoft and their “gut” has lead us in the right direction.  Although the numbers speak volumes, don’t dismiss those flashes of insight that you may get from time to time.  Find a good balance between the data and the insight you gain from running the business and knowing where you want to take it.  Creating an analytics based culture is one of the best ways to ensure the success of your business.  Continuous analysis of the data requires you to do other things in your business that will keep you on the right track.

[Image credit: ndevil on Flickr]

6 thoughts on “Analyze This! (Building an Analytics Culture)”

  1. melaniebensonstrick

    Great article and I totally agree.

    As a matter of fact, I find that the reviewing of the right level of data is such a problem for business owners I recently did a whole training on how to use a dashboard (which I created a template for) to review the right level of data to make decisions.

    I also highly recommend that every team member particiipate in a monthly review of statistics. If they research their own stats, then present to the team, it provides a sense of ownership and accountability that a team member might not have otherwise.

    I'm looking forward to digging into the Google/Infusion dashboard…I'm sure we'll be calling you for a template soon!

    PS Loving our Infusion program and your customer service. I'm one of Infusionsoft's new advocates to the aweber/1shoppingcart users.

    Melanie Benson Strick
    CEO, Success Connections
    http://www.successconnections.com/articles
    Helping entrepreneurs leap into 6 & 7 figure success

  2. Tyler – A HUGE thanks for the new dashboard. I shared it with the rest of the executive team and we LOVE it. Seriously, that's all we need – a weekly snapshot of key items including site analytics, leads generated, advertising spend, and other important things learned during the week. Your magic even tamed Mike (our CFO)! When the executive team has the data and sees that the marketing team operates off of data & testing, we are much more open to taking the time to learn the effects of changing things, rather than wildly changing things based on 'gut'. I applaud the disciplined approach.

  3. Ok, so a bunch of people have requested the code to be able to do this. I can produce the code (for a small fee). No, just kidding. Here's the deal: internally, we have direct SQL access to our database. Yes, I know a lot of Infusionsoft users would love to have that kind of access, but its just not smart for us to open up the databases like that. So, my code was written with that direct access. What I'm going to do is rewrite it so it uses the API. Half of the code uses the Google Analytics API and half will use the Infusionsoft API. You'll get a sweet blended report all on one page. Code coming soon.

  4. I have battled with the conflict between the “gut” and the data. Being a management consultant for large firms (Fortune 500), I have seen people get caught up in the numbers, the metrics, and the incentives without having a real understanding of why they exist. In large corporations, there is so much information available (too much, really) that often times management doesn't know what to measure or they build the wrong metrics into their dashboards and related metrics displays. The result is that employees “bark up the wrong tree” and, consequently, the business suffers (I've seen millions of dollars wasted due to these mistakes). They make decisions because of the numbers on the dashboards (the data) without understanding the impact to the business.

    Of course, we management consultants have learned to capitalize on this area 🙂 One area where we address this issue is in business intelligence, which helps business provide the right information to the right people. I'd like to build upon Tyler’s solutions based upon my own experiences in this realm.

    Dashboards are wonderful as long as the right metrics are displayed (very critical). How do you determine the right metrics? Start from the top — your business's strategy. Focus on what’s most important to the business. Know your audience and then ask “What behavior do I encourage by displaying this metric?” and “Will that behavior help the business meet our strategic goals?” By aligning metrics with your business’s strategy, you’ll minimize the changes to the dashboards. Unless your strategy changes dramatically, your dashboards should maintain consistency.
    Tyler – your closing thoughts are great. As small businesses grow into mid-size and, ultimately big businesses, it’s imperative to maintain a culture where employees and managers think for themselves and use the data as input to the decision-making process. If managers/employees rely solely upon the data for their decisions, they’ll become disconnected from the human ability to be creative and find innovative solutions and a constantly-changing marketplace. They may also end up focusing on the wrong data/metric/incentive…and then end up hiring a management consultant to get them back on course 🙂

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