Marketers love data.
Data, data, data. Big data. Little data. Internal data. Platform date. Web site data. Sales data. Conversion data. You name it data.
Our fascination with data is bordering on the obsessive.
I’m all for making wise business decisions based on solid data, but show me the numbers! What I’m categorically against is holding data, any data, up as some sort of false idol to be worshiped at the “altar of numbers” simply because data involves math. And yet, I see it all the time. Here’s why I never trust a calculation.
Making a decision on bad data, or worse, on bad interpretation of good data has the potential to harm your business far worse than making a decision on no data at all. Why? Because you have the data on your side – or at least you think you do – and the fact your decision has been “data validated” is likely to prevent you from seeing the truth of the matter. You may very well throw good money after bad in an attempt to prove the data right.
Marketers can (and do) make many types of mistakes when working with and making decision based on data. Today I’m here to encourage you to make one change in your data consumption habits. I ask you to join me in never trusting a calculation. If you can’t see it, count it or measure it, then DO NOT TRUST IT! Validate!
For example, as a digital marketer and web strategist, I encounter “conversion rate” ever day. The conversion rate of a web site is the total number of web site visitors divided by the number of visitors who took action during their visit. Depending on our web site and how you define success, that action might be a purchase, a sign up for an email list, or any number of other desirable outcomes. It depends on your business and on your web site.
Whenever I see a conversion rate, my reaction is always the same. I want to see the underlying data.
Let’s look at just a few examples to illustrate the danger of looking at a calculation.
Clearly, site #2 has a “strong” conversion rate, relative to the other three web sites. But that doesn’t tell you much without knowing the underlying data related to number of visits, total number of purchases and sales related to those purchases.
Now, if you could just raise the $ per purchase, then you’d be in great shape, right? True, but that’s yet another calculated number and not raw data. It’s obviously calculated by dividing the total sales by the number of transactions.
Right about now, you’re probably scoffing, because this is so incredibly obvious. “Duh. I didn’t get my MBA to have a lawyer teach me basic math.” I can hear you saying it from here. And yet, I bet you a dime to a dollar that some executive in your business is relying on a calculation or three in some business dashboard or another without paying too much attention to the real data underlying that calculation. I saw it regularly in my prior life as a corporate drone.
Conversion rate is a great thing improve. But, hypothetically, it’s possible for me to double your conversion rate by halving the number of visitors to your web (better targeting?) while keeping your total sales the same. Have I REALLY moved the dial?
Obviously, this isn’t the outcome you’re looking for if someone states that can double your conversion rate.
My advice is this: never trust a calculation. Hone your professional skeptic reflexes. Rely on the underlying data as a decision making mechanism first and get to the calculations second. Or at the very least, keep a wary eye on those calculations, and if something doesn’t pass your sniff test, delve deeper.
Show Me The Numbers!! Do you trust calculations? Are they crutches that lead businesses to inaccurate decisions and bad strategy? Join the debate, share your thoughts below.
Image Credit: Jorge Franganillo, Licensed via Creative Commons