Developing a cult of analytics

Building business processes around your tools Steve Jackson (Kwantic)

Background The approach is based on observation of the trends in multiple enterprises The challenge is it’s a change management process Process is relevant for mid-size to enterprise level companies Describes what you need to do in your organization in order to best utilize your web analytics tools to get information out

What is Analytics Utopia? It’s when you’ve reached the stage where you just use analytics for business information, routinely as part of a system Organizational readiness Time

Cult of Analytics (where you want to be) Company wide process that works and is adhered to by all staff. Advanced KPIs for each business unit Business performance measured company wide Web Analytics data is fully integrated with all marketing systems on and offline Marketing decisions based on data and you’re doing it regularly. You can predict how your customers will act in a given situation You use in house analysis to answer key business questions. Investment decisions are made at the executive level based on analytics Lead generations systems drop hot (scored) leads into the email inboxes of your sales people. Your e-commerce systems are integrated to react to who your visitor is based on behavioral data or customer segments. You understand the ROI on your analytics expenditure Cost line Profit line Organizational readiness Time You Are Here

The 8 Step Process Toward a Data Driven Culture

Urgency has to be present The bad news? Without a sense of urgency you won’t get management buy-in. Examples… Urgency of Businesses going online The Internet explosion has often been compared to the California Gold Rush in that it is often not known where the gold nuggets are or how long it might take to mine them but that such a comprehensive broad enterprise must be teaming with wealth. HP Computer Systems Laboratory Feb 1996 http://www.hpl.hp.com/techreports/96/HPL-96-18.pdf Urgency in the Print Industry The biggest fear that newspaper managers have about the Internet is that electronic competitors such as Microsoft's Sidewalk and CarPoint might steal away advertising, especially classified. AJR, (American Journalism Review) May 1999 http://www.ajr.org/Article.asp?id=3251 Urgency in Economy The rising defaults on subprime mortgages in the US triggered a global crisis for the money markets. Many of the world’s leading investment banks have collapsed as a result and the US government has proposed a massive bail-out. The crisis has become one of the most radical reshapings of the global banking sector, as governments and the private sector battle to shore up the financial system following the disappearance of Lehman and Merrill as independent entities and the $85bn government rescue of AIG. FT.com 2008 What are your competition doing while you don’t do analytics? If you don’t do this in the next months/years what will happen?

How companies instill urgency Nokia – Changing from a manufacturing model to a services based approach means primarily shifting from a B2B company to a B2C company. Sanoma – Shift from in publication advertising business model to online business model. KONE – Recession hitting the building industry means new sources of leads required worldwide.

Has to be led top down You will not create an analytics driven culture without top managements buy in, it is simply too expensive in terms of tools, process creation and human resources. There are however ways to convince management of the value of analytics Speak in the CEO’s language. $$$ not bounce rates. Transmit URGENCY Create awareness of the business usage of the tools Get the HIPPO on your side and shouting for you

HI ghest P aid P erson in the O ffice Great idea boss, lets run an A/B or MVT program to test out your idea and see if it works. Great idea boss, lets do a survey to see if our customers agree with your viewpoint Hey Boss, Do you know that our competition have a bigger online market share than us? Hey Boss, did you hear how we made Harry running the services section of our website into a hero with top management? They’re funding his initiatives now. Hey Consultant! Can you help us convince our boss?

Vision (with analytics at the core) Our vision is to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online Creating value for customers, to earn their lifetime loyalty We help people trade practically anything on earth The Vision shouldn’t be about Analytics, the vision should be something greater, more meaningful and easy to understand that requires analytics. The 3 brands mentioned here have strong visions and strong analytics competence to measure customer value, retention, recency, frequency.

Amazon Vision What this means from an “Analytics at the core perspective” is a number of things; Measure & analyze Consumer lifecycle Measure & analyze the effect of reach and acquisition Measure & analyze consumer engagement Methods to measure consumer purchases and interests Methods to measure effect what is valuable to current customers to keep the relationship going Find out the content that works in terms of sales Determine ways to delight the customers Integration of data across ‘the cloud’ (demographics/psychographics) Methods to ensure the competition is outperformed and customer defection is kept to a minimum Our vision is to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online

Internal Communication Don’t say this….. Our conversion rate is 1.5% and our bounce rate is 51%. We drove 100,000 visitors at a cost per visit of €0.40. Our average order value is €350 and our cost per acquisition is €26.66. Say this….. Last month our website made €525,000 revenue with profit after costs of €38760. Our big problem is we wasted €20K of our advertising spend. Our ROI could be much improved. We need to test our offers

Internal Communication In a company of many stakeholders communicate in a targeted personal fashion. KPIs that are relevant to me please Communicate the urgency. Time is money. We need improvement in these results in 3 weeks. Communicate the what happens in the marketplace. What are the competition doing? Are they doing it better than you are? Look at all the data sources. Communicate globally and locally using all the available tools. Email, Intranets, Extranets, Awareness workshops, Graphics, logos with specific purposes that show buy in.

Actionable A phased approach and actionable plan

Actionable - REAN Financial services firm

Actionable KPIs How do you use a KPI? Description : Cost of delivering one defined activation/conversion Usage : Used by the sopke actors to optimize campaign spend to campaigns that convert the best. The hub is sent improvements and/or actions required by the spokes so that changes can be made. Calculation : Total cost of referring source / Number of confirmed conversions (per activation) Actions : Compare CPA by reach source and re-direct poor performing sources of traffic to higher performing sources Benchmark : BI-Weekly. Historical information from HBX data & CRM data.

Quick Wins These should be planned…. Don’t wait , find your low hanging fruit, monetize it and communicate it to all concerned.

Identifying quick wins KPIs – Poor engagement; Bounce rates, Abandonment rates, exit rates, page views per visit. Testing – Performance; Better click through/conversion with version “B”. Qualitative feedback; Nothing better than knowing trends in the voice of the customer. Heuristic analysis; If usability is bad check the data. Does it correlate with bad usability? If so get testing.

Continuous organizational Improvement Your organization is about people and their roles as well as processes. Create roles that support analytics Reward passion Create incentives to find business insights Prestige (awards for excellence) Remove barriers – red tape, admin and problem people Hire people that ‘get analytics’ Create processes that drive actions….

Organizational improvement – Hub And Spoke Centrally you have the hub, a combo of tools, process and people that are responsible for data integrity and delivery. Then we have different spokes for different folks! Global development Business line owners Global marketing & comms AND Country operations that are at the front line of local sales, marketing and delivery

Amazon – Organized for execution Information Technology Department Business People Nothing This worked better Small cross functional teams Mix of business people and technical Automated systems Independent KPIs for each team Feeding back to a hub How it used to be

Routinely used Do you use the datasets available to drive insights routinely? Do you communicate and then act on the insights you find as a matter of routine?

Where are you? Level 1 – No system, processes, probably tools but not utilized. What to do next… Generate internal awareness about what web analytics is Examine how your competition is analyzing their site and the tools they use Try to get backing from the executive level via ‘wins’ and awareness initiatives Try to start to create an internal vision about how to use analytics for your business Get help - outsourcing to an experienced web analytics consultancy to build a business case for analytics would help Organizational readiness Time

Where are you? Stage 2 - organization has realized the potential of analytics and is experimenting If you don’t have executive buy in at this stage you need to continue the awareness push Continue to plan some quick wins If you have buy in you might now be ready to determine roles in the business using the Hub and Spoke model as a basis Design a REAN model to help focus ideas KPI workshops Advanced tool specifications (segmentation, custom tracking scripting) Organizational readiness Time

Where are you Stage 3 - You’ve gone beyond simple experiments with tools and are now using the tools and fully understand the potential of analytics to your organization Analytics hub should be formed Place your ‘stars’ here and build process so losing them is not painful REAN should be used as focal point in all communications concerning KPI reporting & analysis KPIs should be developed across all business units (not just the key ones) It’s your business, your strategy, consultants should now be helping you with your process not trying to help you define it Business performance targets should be set and rewarded when met Organizational readiness Time

Where are you? Stage 4 - You have developed a hub and spoke model and have an underlying strategy like REAN in place. KPIs, Dashboards, Scorecards in place. Business performance is measured and rewarded where applicable Keep up the momentum Keep instilling the urgency and vision Reward good analytics practices (Intuit Stinky) Automate more of the data coming into your hub Regular analysis Cross channel data integration is beginning Organizational readiness Time

Where are you? Stage 5 - Web Analytics data is fully integrated with all marketing systems and measures on and offline marketing/sales activity to a reasonable level of accuracy. You’re doing everything you did at level 4 but you’re doing it every day. Continuous win program Continuous analysis program Continuous business question program Continuous award/prestige program Continuous hiring/promotion program Continuous being the key word! Organizational readiness Time

Steve Jackson Director – Business Insights Kwantic http://www.kwantic.com/ [email_address] Twitter http://twitter.com/blackbeak Cult Of Analytics DRIVING ONLINE MARKETING STRATEGIES USING WEB ANALYTICS Steve Jackson http://www.blackbeak.com/the-cult-of-analytics/ Available from all good book stores from April 21 st 2009 BlackBeak Blog http://www.blackbeak.com/ Articles/posts about online marketing and Analytics http://www.kwantic.com

Developing a cult of analytics

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