Small business marketing is tough, but marketing analytics can be mind-numbing. It seems everybody has a new metric to track. You can quickly become so overwhelmed with numbers that you lose track of what is really important to your business. This is how I keep my perspective, and it’s based on my life journey, so come along for a ride… Good management practices “When you can measure what you are speaking about, and express it in numbers, you know something about it…” That quote came from Lord Kelvin, way back in 1883 (no, I’m not that old), from which a common management philosophy evolved: If you don’t measure it , you can’t manage it. Sounds like great advice, and it is often used to justify big investments in business intelligence or analytics solutions. Having worked in I.T. for a long time, I know it well. But management experts like Edward Deming and Peter Drucker have consistently positioned measurement, or checking results, as only part of good management practices. They promote a simple continuous improvement cycle that has become the cornerstone of many systems, including the granddaddy ISO 9001 certification: the Plan, Do, Check, Act cycle. OK, I know I should be measuring…but measuring what? I really have no time to devote to meaningless metrics… Try an experiment “All life is an experiment. The more experiments you make the better.” -- Ralph Waldo Emerson Now that I have my own business, I read a lot of entrepreneurial articles. One great bit of advice said that I should run my business as a continuous series of experiments. It’s more of a mindset thing: never let yourself become complacent with the status quo; always be looking for changes that might lead to improvements; actively pull back on a change if it does not deliver the expected results – i.e. fail fast! Having been through an ISO 9001 certification process, this feels a lot like the Plan, Do, Check, Act cycle, but without the bureaucracy. It just feels right to me. What I really like about it, though, is that it gives purpose to some of those marketing metrics and lets me comfortably ignore many others. I only need measurements for the experiments that I’m running, and those measurements will tell me if the experiments are, or are not, a success. We are besieged with numbers, but typically only need one or two. The rest are just noise – fun to look at in your spare time. Measure to decide, don’t decide to measure The story telling doesn’t end here…as an ex-CIO with thirty years of experience, I have lots of life lessons to fall back on: one of the most common I.T. headaches I have seen is the build-up of custom reports that absolutely had to be developed but are no longer used. There is a really simple reason for this: someone thought there was a problem, measurements were needed (the analysis/report), changes were made, and measurements confirmed the problem was resolved. Since then the report no longer served a purpose. The decision was made to start the measurements, but no one recognized that the measurements were only needed until a decision was made. No one ever ended the experiment . Analysis-paralysis Another hard I.T. lesson learned: when people collect lots of data, someone inevitably starts suggesting that if we could invest in analytics [or business intelligence, or an executive information system, or a decision support system], then we might find tremendous business opportunities or insight. Sometimes they suggest we collect more data, so we don’t overlook anything. What usually happens is a lot of analysis with little action. People become paralyzed by the information because they didn’t start with a purpose. They are searching for an answer when they don’t know the question. Since it was a big investment, they are looking for big insights, but what they find are lots and lots and lots of small ones. Keeping it simple Finally, I started my career in engineering, and have always had a preference for simple solutions; probably because the math of a complex solution was sheer hell. Here is how I look at my marketing analytics: My marketing initiatives are experiments I focus on the few numbers that indicate a degree of success or failure When the experiments end, I log my measurements, observations and lessons learned ( a few simple notes in my business journal) I then terminate, extend or restart the experiment with changes. Friday afternoon nuggets So what do you do with all those “other” metrics that aren’t specifically part of an experiment? I reserve them for a time when I don’t feel like productive work; Friday afternoon is common. Just start surfing the numbers to see if something, anything, peaks my interest. It’s a great time to have a look at things someone mentioned in passing, or a recommendation you read in an article. It is not activity without purpose, though; the goal is clear: identify experiments to be run. Maybe it’s a question you can’t answer with the numbers you have. Maybe you see a stagnant number you think can be improved. But don’t worry if you can’t come up with anything; it was simply confirmation that those other metrics were safe to ignore…
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