Gone Fishing?

If you don’t aim how can you hit your target?

I’m amazed at how many times a week I get contacted for Data Insights assistance. Most of these requests go unanswered as they come across as bulk shotgun style emails that are quite leading. They are not aiming for anything, they are just looking for me to agree with what they’ve already decided. Well, if you already know the answer to your question, why are you asking me? “I’m a doctor, not a Captain, Jim”.

One of my clients explains this phenomenon further http://tanujparikh.com/post/26384857215/know-your-target

I’m also astounded at how many “analysts” take the same old approach to Analytics. Their approach is give me all your data and let me play to see what we find, or even worse tell me what you think the answer should be.

However when someone takes the time to craft a targeted email that demonstrates they have spent a few moments researching my background and have thoughtful questions about their business, I usually get back to them quickly. I am happy to run through some high level theory, but often its only a matter of helping them reframe their initial questions to better direct and organize their overall strategy. When they’ve got the real bulk of data in hand, we begin a long term engagement.

At Soko Creative, we don’t just toe the age old line that predates your PC. Data Insights teaches us to use a far more scientific, truly objective approach. We essentially ask the data a question, understand how the impact could drive a future decision, how it will impact your business, and then set about to prove our hypothesis right/wrong. Most importantly, we take them time to educate you and your staff on how to take the ball and run with it; implementing long-term business processes that you can count on.

Analytics is Priority #1

Studies, Surveys, and CEO’s all point to the same thing. Analytics and Data Insights are “The Top Priority” for companies.

http://blogs.sap.com/analytics/2012/01/25/bi-and-mobility-top-the-2012-priorities-for-cios/

http://thesologuide.com/2725/website-analytics-is-the-top-priority-for-marketers-in-2012/

http://practicalanalytics.wordpress.com/2011/11/02/ibm-cio-study-bi-and-analytics-are-1-priority-for-2012/

Why then do so many firms struggle to glean maximum intelligence, if any, from their data? Why are they struggling to fill the exponentially growing number of open head counts they appear to be prioritizing.

Here’s why: An individual employee actually has a “Priority #0”, which takes precedence over Priority #1. While Analytics sole purpose is predicting and improving business performance in the future, somehow employees are recognized, rewarded, and evaluated on something other than Analytics. Your product owner is responsible for making sure the product ships, not so much on how it “will do”. The engineers and designers don’t understand why proper data infrastructure is needed to make current design decisions… because its not. Its for future design decisions. However without that infrastructure in place upon launch, there is simply no way of tracking a product’s success or failure post-launch.

How does this get resolved? While there’s no silver bullet, the solution must start from the top. It’s not enough for executives to preach data driven decisions from a soap box, or for internal recruiters to post, post, and repost analytic positions which they can’t seem to fill. They must make sure that proper incentives are in place and that perverse political disincentives are eliminated (like needing a particular number to be the answer aside from the actual number). In fact, I often get asked “Scott – What do you when you have to make up the numbers”? 

Woah.

While Data Insights is what the CEO’s are calling for, CFOs, CIOs and other internal staffers know its also a bit of a whistle blower, or political “Debbie Downer” http://slashdot.org/topic/bi/big-data-top-priority-executives-mckinsey-survey/. What would you do if there were actual data on your products performance beyond marketing hype and conjecture? Your departments contribution, your online presence, customer loyalty, call center efficiency, etc… all up for mathematical analysis. Would you pass muster?

But on the upside, maybe that multi-million dollar advertising budget can be reallocated toward a far more profitable end. Analytics can help you make these crucial decisions.

If profitability of your company is truly Priority 0, then fill these open Analytic head counts with true problem solvers. Don’t hire the politician, hire the mathematician. 

 

Keep your friends close

How much value do your friends bring to you? Silly as this question may be, its one being asked in offices and boardrooms across the country. Companies are trying to understand how much a “fan”, a “follower”, or a “like” is worth.  The most common response is, “I don’t know, but more is better.” However, in this case more isn’t always better.

Social media sites leverage something called EdgeRank to determine what content is shown to people when they log in. On Facebook, it’s believed that only less than 2% of eligible content has the potential to show up in the news feed.  So, the question shouldn’t be how do I get more fans, the question should be how do I get my posts to show up more than 2% of the time. The simple answer is engagement.

When people interact with your content it’s more likely to show up again in the future in their feed and the feed of those that are “close” to them. When companies attempt to gain just any followers via contests and other means, adding them could in fact be decreasing the total value of all their fans.

So how much value do your friends bring to you? Within social media, just like the real world, in some cases less may in fact be more.

Decisions, decisions….

We make decisions everyday. Some big ones, some not so big, and most without really giving it much thought. Should I wear the white shirt or the blue one? What route do I take on my way to work? Do I want fries with my lunch?

Answers: The blue one, last time I wore it with this outfit I received several compliments. I’m taking the backroads, the traffic on the main road is unbearable this time of day. I’ll should pass on the fries, fried foods upset my stomach.

What do all these decisions have in common? While there is no wrong answer, they all rely on past knowledge, or historical information, to make a determination. When we make a decision we take to sum of our previous experiences into consideration to determine what to do next.

Why then do so many expensive decisions in the business world rely on only a small window of data? It’s still typical for companies that have been around for decades to base day to day decisions on only the last 13 months.

Firms that have successful data management strategies in place make data driven decisions based on years, and in many cases decades of learnings. If you can learn from the past you won’t be doomed to repeat it’s mistakes. By choosing to shortcut valuable historical data, you’re only fooling yourself into thinking your actions are supported by the numbers.

Pricing to stay in business

How much does a single donut at Dunkin Donuts cost?  Calling around to a few stores I received the following 4 answers: $0.50, $0.69, $0.99, or $1.29? Are the stores charging $1.29 overpriced? Are the stores offering it at $0.50 discounting too much? The answer is “yes, it depends”. This same question applies across the QSR spectrum.

A thorough analysis of all transactions and an understanding of the locations is required to best answer the question. Using economic principles with the results displaying graphically, a business owner can make a more informed decision.  By understanding the local demand through the use of data insights techniques, he can work to maximize marginal profits. Typically this improves bottom line profits by several percent.  In a world of compressing margins, knowing where you can and can’t pass higher commodity costs to the consumer could mean the difference between staying in and going out of business.