Analyze This! (Building an Analytics Culture)

Last 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]