The Problems With Data Analytics: Relevant Comparison Is Key

Problems with data analytics? What do you mean?

Over the past month in my role with CCA Global Partners as a Marketing Coordinator, I've been increasingly exposed to numbers, and how they factor into performance. Whether it's looking at data specific to a business, comparing businesses against their markets, or making key, statistic based decisions - my belief that analyzing the past leads plays a large role in determining valuable insights for the future has certainly been affirmed in what I've seen working with clients. What I have realized, however, is that not all data that seems important is relevant - especially when it comes to marketing. In our time, there are many ways in which data cannot even be acquired accurately or fully. For instance, I would argue (and many others would, too) that social media is a crucial part of the marketing funnel for pretty much every B2C organization. Yet, while tracking its role in the customer journey is possible with the right software, assigning a dollar figure to it is nearly impossible. This doesn't mean businesses should just stop being on social media because they can't gage the full impact. Rather, the numbers simply don't matter so they simply operate without worrying about it. It's counterintuitive - but sometimes in marketing, this is the way to go.

Averages: Discoverable, But Not Always Relevant

As a marketer, it's crucial to be able to decipher certain statistics, but it's just as important to be knowledgeable about which ones to disregard. Piggybacking off my example of social media, I would offer another example category of data that is accessible, but not always relevant: averages. Recently, one of my clients expressed that she was upset because compared to the average in her industry, she felt as though she was underperforming. This is an incredibly common mistake that businesses make - and, it makes them feel bad about themselves - for no reason! As an example, most of you reading this know I love to surf. If a surf shop in Venice Beach, CA (an area with year round frequent, large numbers of foot traffic) were to be compared to a surf shop on Martha's Vineyard (an island & popular seasonal beach destination off the coast of Cape Cod, Massachusetts) a person would inevitably find that their available market share, conversion rate, revenue and pretty much everything else would be completely different. Not only would the 2 locations likely have completely different marketing approaches, but comparing them would be totally arbitrary because even though both are surf shops, their markets are not the same at all. In the case of the shop on Martha's Vineyard, who knows if it even makes sense to compare their statistics to the national average for surf shops? They probably wouldn't stack up well at all - and the key here is that's not a reflection of their performance. As an alternative to looking at the industry standard, which would include shops like the one in Venice Beach, they would probably want to adjust their comparables, redefine their competition, and look at their personal growth on a year to year basis.

So if you're confused or worried about how your business stacks up to the industry average, it probably doesn't matter.

Instead of looking at your industry statistics, I propose you look at things from a different perspective. Markets generally fall into three main types: rural, suburban, and urban. These are the main ones on a basic level, and the first step for gaging a businesses' performance is to gather an idea of what variation of these they generally fall into. Narrow your scope; think about direct competitors, not those in different markets who target a different demographic with access to different assets or audiences. Your competitors are those who are most similar to you, not those who are the most different. I'm not saying that data isn't important, because many times, it is. What I am saying though is that good marketing involves being selective and knowing what matters as well as what doesn't.

I urge all of you to keep this in mind when you're developing your strategy and forming your marketing approach in your business.