From Misunderstood to Celebrated: How to Make Executives Care About Digital Analytics
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Presentation I gave in London in 2010 at the Webtrends Engage event. Often hearing digital analysts complain that nobody seems to care about their reports, I tackle two fundamental causes: lack of understanding of business performance measurement by analysts, and use of jargon.
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From Misunderstood to Celebrated: How to Make Executives Care About Digital Analytics
- 2. WebAnalysts Are Irrelevant • Adoption remains the biggest hurdle What is measured What is being done
- 3. WebAnalysts Are Irrelevant Web Analytics often underdelivers
- 4. WebAnalysts Are Irrelevant • We talk too much jargon • We get a lot of “SoWhat?” faces
- 5. WebAnalysts Are Irrelevant We have a communication problem
- 6. WebAnalysts Are Irrelevant We have an alignment problem
- 7. Measurement & Behavior • Performance Measurement determines how people will behave in an organization • People tend to do what they are paid to do – even if it’s the wrong things. Dean Spitzer
- 8. • Self-Aggrandizement • Self-Promotion • Self-Protection Measurement & Behavior Dysfunctional Measurement
- 9. • Are yourWeb metrics aligned with what people are judged on? Measurement & Behavior • Should you? • Do you have a choice?
- 10. • Their own advancement What the C-Suite Cares About • Profits • Predictability
- 11. What the C-Levels Care About • Dissonance between what we report on and what they need
- 12. Prospects & Customers • Businesses only truly care about prospects and customers • How to convert the formers into the latter • How they can keep them as long as they can
- 13. BeyondTraffic • TheVisit Paradigm has boxed us in • We need to realign with the Prospects – Customers dynamics
- 14. Aligning KPIs • KPIs are too often descriptions of visitor behavior • And not enough measures of business execution
- 15. Aligning Performance Systems • You can’t have contradictory Performance Systems • Web Analytics: more about business health • Web Analytics: less about mechanical metrics
- 16. Analysis to Action Do we really impact the big, shiny things?
- 17. From Indifference to Relevancy Start answering questions such as these: • How many prospects did we get this week? • What is the value of aWeb customer? • How doWeb investments contribute to overall profitability? • AreWeb customers more or less loyal?
- 18. From Indifference to Relevancy • How doWeb investments contribute to overall profitability?
- 19. From Indifference to Relevancy • How doWeb investments contribute to overall profitability
Editor's Notes
- I built this presentation following a rather long reflection period about the topic of organizational adoption of web analytics, performance management and measurement, and the overall state of web analytics in regards of its importance in the business.This was the first time I had ever presented those ideas, and I was testing their interest with this workshop opportunity. It turned out that many people were actually interested in the topic, probably feeling that they didn’t have the impact they wish they did, or as managers, were looking for ways to increase their web analytics employee’s relevancy to their goals.
- -- To me “adoption” , i.e. the true use of WA in the Web business decision making process, is the number one problem. It is an even more important one than staffing, which is a real one as well, since not doing anything of significance with all the purchased applications and hired hands is manifest of a deeper problem.-- Many, as myself, like to talk about business culture, and how we must create an analytics culture (for what it means). Perhaps true Web Analytics adoption has very deep roots into those broad questions. But today, I want to examine what part of the problem is our own doing as Web Analysts.-- Why is it that so many projects, at so many companies, don’t really proceed from what Web Analytics tell, or could tell them. Why is it that that at so many companies, WA has so little impact, even though investments were made in applications, training, etc? Why would anyone not try to push their WA investments to the limits, if we are to believe 15 years of literature boasting WA benefits to a business?-- It is one of the strangest things to me that we are still complaining about not really being heard even though we have so much to contribute. This would mean that management is either stupid or it is us who are not doing what’s right.
- -- Despite all the talk about Web Analytics, all the hype, especially in the last 2 or 3 years, it puzzles me to see so many organizations where web analytics is still not delivering all the nice things we’ve been promising since 2000. Yes, many companies purchased an application, or adopted Google Analytics or other free solutions, or switched to GA from a paid solution (which escapes me to be honest, and translate how unimportant WA can be, or has become), but I see everyday businesses where, after all, WA do not have the impact we anticipated, and long for.-- Many analysts will tell you that they send out reports nobody seems to care about. We’ve often heard of examples where the analyst stopped sending reports, just to realize that nobody was calling to ask why they were not getting them anymore. To their defense, web analysts’ colleagues have been too often bombarded by large numbers of numbers! Add cluttered graphs, and especially lots of unknown terms and concepts, and it’s no surprise a lot of them would rather sit through a root canal with no anesthetic! -- A common reporting mistake is trying to make a point instead of getting to the point!-- In still many businesses and organizations, there is no formal program, let’s call it governance, that explicitly establish rules and processes regarding with to do with the information generated by analytics. This is a different topic from what I want to talk to you today, but I must mention it, since I truly believe that the absence of formal Web Analytics governance is a good sign that a business hasn’t given WA all the credit, and the importance it deserves.
- -- The language of web analytics is one of its own. How many times have you had to conduct internal training sessions where you were asked to explain all those concepts we use: visits, visitors, page views, bounce rate, click-throughs, etc.-- I think now that most of our colleagues have a fairly good grasp of those terms, but there’s a fundamental problem here: they had to learn our language, we didn’t learn to translate what we wanted to say into theirs. (one of the key arguments).-- An excellent sign of the little impact of some of the things we say is when we get the “So what?” reaction. Because of its jargon, or even fundamental concepts, WA insists on looking at web investments in terms that do not touch/reach managers, and even less executives. For example, think about it this way: to a CFO, or any high-level manager, the number of visitors you got on the web site last week, or fans on the Facebook page, is actually costs.
- -- Our main problem is certainly not how to find statistical confidence or to be able to execute flawless multi-linear regressions. It is communicating. -- We talk too much about what we do and how we do it. We talk too much about how the Web works, and what happens or doesn’t during all those visits, but not enough about how the business works and how customers behave. If I can use an image, we live too much on a “mechanical” plane rather than knowing our ways on the higher strategic one, where business goals reside. Web Analysts tend to focus too much on what happens on an interactive interface rather than how it translates in goals met or missed.-- Obviously, I am not saying that there is a disconnect between what visitors/users do and how successful a business is online! What I want to point out to is how all those actions are translated into meaningful information to managers/executives. One of a web analyst’s the very first duties is to clearly expose how all those little actions have an impact on the business. And it goes without saying that another one is to make sure the analysis framework focuses on the essential ones!
- -- By that I mean that a major problem is that Web measurement is not well inserted/aligned with what else is measured in the business. This particularly touches two aspects: 1) how is the business performance measured and 2) how managers to whom analysts report are measured (expressed more candidly by their “objectives/goals”-- We can see immediately that if what we report on is not well aligned, we cannot be perceived as strategic/important; we relegate ourselves back to the “So what?”. By the way, we must know that the “So what?” (or whichever form it manifests itself) is the first sign that a manager does not see the connection between how ultimately he/she will be measured and how relevant all those visitor actions numbers are to those goals.
- -- Every business evaluates its people, how well they perform. -- It is a simple fact, almost a human truth, that what gets rewarded and what gets punished will attract all the focus.-- Performance management literature is full of examples about metrics that went wayward in unpredictable ways, always caused by people trying to optimize the reward system to their advantages - Inventory kept low to the point of availability break outs and client disatisfaction - Unprofitable business taken so that end of quarter top line numbers will be met - Higher level of unsatisfied customers because the call center is rewarded for shorter callsNOTE to NAN: I can find other examples, but for the ones shown here, let’s us refer to Spitzer in a footnote
- “Measure used to prove, rather than to improve” D. Spitzer-- We have all seen situations, too often unfortunately, where measurement served an agenda, either of a manager or a team.-- Should we actually be surprised? Never think that measurement is all about objectivity: it evolves in a socio-political environment that necessarily pre-determines what will be adopted, rejected, or plainly ignored. -- I think we too easily forget that measurement is not isolated from the vagaries of organizational life. Metrics, KPIs, optimization processes, etc., although rightly fact-based, are also within the environment of politics, agenda, priorities, and execution contingencies. Note to Nan: This is an area where I could develop if we need more content
- -- One important thing to understand is what people are judged/evaluated on. This is in general also one big hurdle to Web Analytics, or even analytics in general, when some activity metrics are not aligned with the overall evaluation grid of people.(Transition slide, not much to say)
- -- Profitability is without a doubt something on which Web Analysts don’t report enough. To their defense, this is mainly because, I believe, most Web Managers are not evaluated on their contribution to the business profitability, but rather on top lines. This explains in large part why the vast majority of optimization efforts focus on conversion. One other problem is confinement: Web Analysts tend not to go beyond the online properties they report on, instead of following web prospects and clients all the way through the cycles. By that I mean very few are asking questions that pertain to what happens once the transaction/conversion occurs.-- C-Level (Directors) Managers are rather obsessed with the future. However, most Web Analysts report on what happened, but are ill equipped to make statements about what will probably happen if X or Y investments are made. Web Analysts need to learn to make credible predictions based on the knowledge they have accumulated-- And naturally, maybe even especially, C-Level people are very much focused on their professional success, which is in principle aligned with the business one. This is a pretty sensitive factor when KPIs are determined. I don’t want to suggest here that high-level Managers will only want to align everything so that they can achieve their career goals. However, understanding the business objectives from the overall business ones down to the Managers’ ones is essential to give maximum chances to Web Analytics to be seen as relevant and important.
- -- Obviously, if we insist in talking visits, CTR, Bounce Rate, or even Conversion Rate, we still are too close to operational execution. This level of analysis certainly is relevant, but not the place where higher Management acts.
- -- We should talk less about conversion optimization and more about how the Web can acquire/keep customers with outstanding value. Web Analytics needs from now on the do their part.-- If we just stop for a minute. Do businesses, at least most of them, really truly care about visits and visitors to their site? Is it how everybody else in the business, non Web people that is, talk about? No. They will talk about prospects and clients. They will be concerned with how to turn those prospects into customers, good ones, and how to retain them as long as possible.
- -- For 15 years we have been using the wrong terms. We are the only ones in the business talking about visitors whereas everybody else it talking about prospects, who are potential clients, and customers, and what we can do to keep them.-- Worse, we even thought necessary and spent recent years teaching our language to our colleagues! Now, most people in the business have attained a certain degree of understanding of what we are talking about, but are not always fully convinced that they should base their decisions on what web analysts do (well, in part at least).-- Also, and this is I believe very critical to the upcoming evolution of Web Analytics, we have been boxed in the visit paradigm, one that has made us focus way too much on transactions, somehow conceptually cutting us off the more important relational aspects of a purchase cycle on one hand, and loyalty building on the other.
- - Be wary of KPIs that are rather visitor behavior description than measures of business execution. What visitors did, how well they converted, what pages they saw, where they were coming from, etc. all important behaviors, for sure, but not necessarily relevant comments on how well the business is doing. KPIs, at least at the strategic level, should very clearly answer one simple question: what do our investments in the web do best for the business?-- KPIs can be the source of a certain confusion if we didn’t make sure to align them correctly with the business strategy. I see too many businesses where we forget that the Web Strategy should be plainly aligned with the larger Business Strategy, and that Web Analytics is, at the end of the day, a way to know how well that strategy is executed, while hopefully get some insights on how better execute in order to meet everyone’s objectives. Note to Nan: this is another area where I could develop. We’ll see once we have a first draft.
- - It is of no surprise if not much is accomplished with Web Analytics when it doesn’t take into account the deeper, more important Performance Measurement systems. In a word, how can you expect to be seen as very relevant if you do not possess a deep understanding of the underlying measurement system on which everyone will ultimately be judged upon?-- The KPI Definition step must then be addressed very carefully. This one very practical area where you can operationalize what I said about the communication and alignment problems of Web Analytics
- What is it that we ultimately want influence as Web Analysts, if not the business? More than just the Web component?-- When was the last time you discovered $500,000, or even $50,000? Or saved costs you could quantify? Or increased client satisfaction you surveyed?