Wednesday, February 13, 2013

Paralysis by Analysis

One prevalent problem with today’s environment is that there is so much data, but knowledge... that's  harder to come by.   Did you know that we have the ability to track the movement of a person’s mouse across the computer screen? -  But what good will that do for any of us when measuring the conversion of a customer, or understanding the psycho-graphics of why people act?

If you do not know the name or work of Avinash Kaushik, then you really need to read this post…  then you need to spend time feasting on his blog; which he has called Occam’s Razor.  Occam’s Razor is the principle that states that the most simple and direct way is probably the best way.

So what are the problems that lead to Paralysis by Analysis?  Every situation is different, and should be evaluated independently – but there are a couple of things that are nearly universal when wading through the data:

Sensory Overload – Bouncerate, Pageviews, Facebook Likes, Unique Visitors, Goal Completions, or Visits by Browser – what do you pay attention to?  What do you ignore?  What should you stop ignoring?  Every supposed expert has a different opinion of what is the key metric that you must watch. 

Unimportant / irrelevant metrics – Just as you can choose from a cacophony of analytics metrics – or do nothing – you can also place too much heed to something that has no real value at all.  Do you ever find  yourself watching your Facebook Likes – hoping to break that next level?  Or did you fall into the recent marketing ploy from LinkedIn and share with the world that you are in the top 5% of viewed profiles?  The big question is what is the dollar value of a Facebook Like or a LinkedIn page viewed? 

Giving too much weight to the wrong things – So you've decided that you need to improve your Bounce-rate and your time on site?  This is not a bad thing – if you are sure that these are really the metrics that you should be paying attention to.  Just because your friend tells you her goals for their website, doesn't meant that you should use these same metrics.

Pick your battles:
One way to sift through all of the information you can obtain in this age of data deluge is to be sure to pick a clear battle – that is, to take an approach to filtering the information with your end goal in mind.
Only a clear plan of attack and a clean structure can provide focus.  Use the following as an outline to check your plan of attack and make sure you’re attacking the problem correctly.

Define the following:

Business Requirements – What are you really trying to achieve in your business?  Before you can measure anything, you will need to figure out why your website even exists.  If you are running a public information website, your goals will be quite different from an e-commerce site’s goals.  So, for your commerce site, your goal could be to generate money.

Goals – Choose goals for each of your business requirements, this is what you want each visitor to do in order to achieve your end.  For the e-commerce site, this could be a goal to have a visitor put an item in their shopping cart.

KPIs – Key Performance Indicators – if you want to measure how you are doing about reaching your goals, this metric will tell you.  Your e-commerce metric could be shopping cart abandonment rate, the average transaction amount, or the percentage of visitors that purchase your widget.

Targets – Set target values for the KPIs above – stretch yourself to achieve these target values.  If your KPI of interest is the average transaction amount, then figure out your target and try to reach it – it may be that your target is to raise the average transaction from $80 to $100. Set it, and find a way to achieve it.  If you don’t have any targets, then make one up, this will give you a good starting point.

Segments – Avinash Kaushik speaks of segments as “a group of people, their sources, onsite behavior, and outcomes”

Google Analytics gives you so much information that your focus can go in a million different directions, what needs to be achieved is a focused direction.  This is the place where you will need to identify your most profitable traffic sources, best demographic, their behavior and attributes.  If you can identify the actions you wish to happen, and the people who do it, and how they get to your site; then you can market to them in a very efficient way, and guide them to the goals you wish them to complete.

Now that you have set up your digital analytics correctly, you’re going to find a great deal of joy in seeing insights in your data where once there was only a mystery hidden within a sea of numbers.

This is not to say that this is the only way to set up your digital analytics, but if you don’t get clear about what you want to accomplish and set up a clear path to get there – confusion and disorientation will be the end result.


  1. I enjoyed your post, Thanks! Very informational when your first looking into Web Analytics

  2. Thanks Jelissa -
    I like to share what I learn from the experts.