Are You Missing the Marketing Trees for the Analytics Forest?

Although we are big fans of web analytics, it is sometimes important to remind clients that more information doesn’t always lead to better predictions or decisions (just ask your local weather reporter).

In fact, in some ways an overload of information actually makes it harder to progress in your business and online marketing plan.

That’s because, with so much information coming at business owners and executives so quickly, there is a potential to draw the wrong conclusions, or make connections that don’t actually exist. To put it another way, the more data there are at hand, the more chance there is that we’ll look at them incorrectly, or make a quick decision when more thought might be required.

It’s a classic “forest for the trees” situation, but it doesn’t have to derail your online marketing efforts. In fact, here are some tips for keeping things in perspective and not being overwhelmed by analytics data:

Keep everything in the proper perspective.

Statisticians use a figure they call “degree of confidence” when it comes to analyzing trends, which basically means that they like to see a lot of something – preferably over time – before they are ready to consider it meaningful, important, or sustainable.

You can take the same approach with your own business website.

Don’t get too excited, or distracted, by anything that only involves a few dozen visitors, or doesn’t last for more than a week or two.

Get information straight from customers whenever possible.

Sometimes, one of the trickiest things about dealing with web analytics isn’t seeing what people do, but trying to understand why. There might be times when they aren’t sure why a page isn’t converting, for example, or why customers are taking one action instead of another.

In those situations, it’s best to go straight to the source whenever possible.

Poll current customers on their opinions, or send out a questionnaire, and you might get the insights you are looking for. If that isn’t possible, then perhaps a split test or investing in an online marketing software subscription could be the answer. At the very least, it will help you test the effectiveness of different ideas, messages, calls to action, etc.

Keep an eye on the most important figures.

There are a lot of data out there that you can pay attention to, but that doesn’t mean that they should all be given equal weight. As interesting and informative as certain statistics are, they don’t tell you as much about your business – or just aren’t as important – as some others.

For example, it’s nice to know how much time buyers are spending on a page, what your bounce rates are like, or where your referral traffic is coming from. Don’t become so focused on any of these, however, that you ignore new sales, cost-per-customer figures, conversion rates for landing pages, and other key metrics.

Don’t make rash decisions.

Patience isn’t just a virtue in old fables. The real risk of some high-powered analytics is that they can trick you into a false sense of certainty when there isn’t enough data to make conclusions. Or, that a few days of early disappointments will stop you from continuing with a campaign that would have been a winner.

The idea is to use numbers and relevant data to make better decisions over time, not to ignore what common sense tells you, or what you’re hearing from your customers. Avoid rash decisions, look for long-term trends, and you’ll go a long way toward making the most of your analytics.

The increased attention paid to web analytics is mostly a good thing, and can allow you to make better decisions for your company. But, as easy as it is to feel like you know everything about every potential customer once you start digging deeply into analytics, remember that short-term trends, hunches, and ideas don’t always pan out… and that a small sample size of anything can be misleading.

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