Let Analytics Build Your Business

You can’t Manage what you can’t see:

If you ever try to broaden your horizons by taking a management course, Management 101 teaches you the importance of understanding what is happening in your business (or department).  If you are unable to build transparency (define) you will never be able to control outcomes, improve the business, and/or grow the business.

If you consider the online environment, generally, large companies with a strong brand presence in New Zealand, admit to one of two situations with their website: 

1) they do not have analytics (define) installed, or

2) analytics are installed but no one reviews the performance of the website at regular intervals. 

What would happen if a CEO approached his Managers for a monthly meeting only to learn they either had no quantitative metrics on the performance of their departments or they had the metrics but could not decipher performance?  That would be an interesting meeting.  Heads would roll!  

The value of Online Transparency:

Many Agencies adopt the online attitude “if you drive traffic, sales will come”.  Unfortunately, it is not that simple.  Art Neilson (founder of AC Neilsons) stated, “The price of light is lower than the cost of darkness”.  If the website is not performing you need to know about it!  It is far more cost effective to make changes to a website versus continually throwing advertising dollars away by driving traffic to a “leaky bucket” (define).  As global trends continue to prove the value of online advertising, the “cost of darkness” is increasing every month. 

For many businesses that do not have access to analytics, the usual outcome is to increase the advertising budget.  This is born from the paradigm nurtured by Advertising Agencies who thrive in the physical/offline world.  A world where only 50% of the marketing campaign works, but no one knows which 50% was effective!  This paradigm does not work in the online world of complete transparency. 

This problem grows in complication when management attempts to define the performance of the website by answering the question, “what is our website meant to be doing”.  It may seem simple to some, but to define website key performance indicators means there is an understanding of how the website is supposed to function.  If the website is meant to sell, the company is meant to understand their sales process? 

Building your business - how can Analytics improve your ability to sell online?:

In the physical world, a salesperson will have ideas in his/her mind on how to modify a sales pitch based on the needs communicated by the potential customer.  Over time the sales person continually meets with his/her target market, and based on the feedback of the potential customers, the sales pitch is modified to achieve the desired outcome.  The sales person learns at what point to deal with barriers, and when to apply trial closes.  The outcome is an increase in selling effectiveness due to the evolution of the sales pitch which is solely based on feedback. 

The website is no different.  You have a sales person (website) who is in desperate need of feedback (analytics)!  Only by continually analysing how the visitors react to the sales pitch can it be refined online.  If there is no feedback, the online sales person will continue to communicate the same sales pitch, thus creating the “leaky bucket” syndrome.  

This is only the beginning.  Any good sales person will tell you, refinement of the sales pitch is endless; there is no such thing as a “perfect pitch”.  It is constantly evolving.  Analytics helps to continually redefine the changing needs of your potential customers and to evolve the sales pitch to reflect those changing needs. 

Businesses regularly fail based on their inability to meet the changing needs of their customers.  What better way to gauge client needs than to measure their interaction with your business online.

Conclusion:
Jupiter Research have recently completed a study which measures the correlation between online revenue growth and analytics.  Those Organisations which have processes wrapped around analysing the performance of the website plus the means to implement necessary changes have grown their online revenue far beyond those which do not.  

If you think you are not getting the most out of your website, stop thinking!!  Have analytics installed on your website and let the actions of your customers make the decisions for you. 

Management 102 teaches the process of effective decision making.  Business decisions made with insufficient data are bad decisions.  If the “cost of darkness” is growing, and your media spend on Pay Per Click advertising is providing little return, stop guessing, invest in analytics and let the light in.