Why Brands Must Invest in Analytics During Trying Times
I’m not going to sugarcoat it. The last few years have been rough. We’ve had political upheaval, wars, a global pandemic, supply chain woes, inflation, layoffs, and more. The net result of this is there’s a general feeling of distress all over the world. To make matters worse, economic uncertainty looms large. While the US government and governments worldwide take steps to avoid a downturn, there’s still an underlying feeling of uneasiness.
The question is, what can one do to weather this storm? The Chinese word “Wei-Ji” is the transliteration of the Chinese word for “crisis.” It’s composed of two words; Wei meaning “danger,” and Ji meaning “opportunity.” How do we find the opportunity in the crisis?
Let’s explore where the opportunity is and how you protect your business when the world feels anything but stable. We know chaos and turmoil are cyclical and part of business; despite this knowledge, we seek certainty. In my world, data equal certainty. Data is the key to finding the pulse of your organization and understanding if you’re thriving or about to become roadkill on the information highway.
Ignoring Measurable and Manageable Problems Doesn’t Solve Them
This sounds dire, but ask yourself: would you fly in a plane without instruments? Of course not. Now is the time to put your analytical alarms in place. There are three things I recommend thinking about in these trying times:
First, rely more on facts and leave gut feelings by the wayside. Gut instinct is excellent if you’re lost and have a great sense of direction, but wouldn’t you rather have GPS? Analytics are your GPS; they tell you when things are good or bad and who your best customers are. Analytics can tell you when you need to change course. With a solid implementation, a good strategy, and a capable analyst, analytics will get you further than any hunch. Additionally, I guarantee your hunches are more costly than data.
Many companies will want to pull back on analytics in uncertain times, but that’s absolutely the wrong move. Don’t chuck out the bellwether for your organization.
Second, business as usual won’t help us cope. It’s easy to say that the best way to get through a rough patch is to go into ostrich mode. Stick your head in the sand and pray the storm ends. That’s avoidance, though. Many companies will want to pull back on analytics now, but that’s absolutely the wrong move. Don’t chuck out the bellwether for your organization. You don’t fire your accountants when revenue is down. Instead, you have them work harder to understand why revenue is down.
Third, analytics provides the foundation to rely on facts. In life, when the going gets rough, emotions can easily take over. We need to retrain ourselves instead to look for logic, reason, and facts; these will help us avoid panic and impaired decision-making.
4 Things to Always Watch for
Below are four simple examples of how digital analytics are your canary in a coal mine. The guideposts will save you when business slows, revenue dips, and the C-Suite is asking questions.
Order velocity is critical to understanding how you’re performing as a business. You need to be able to look at your data and understand performance this time last week, last month, last quarter, and last year. A look at these four data points will give you a read on the trajectory of your business.
If you want to understand the data, investigate your marketing channels and spending. Look at your marketing mix. As the spending goes, so should your orders.
Have you ever thrown a party and no one showed up? That’s excess inventory. You stocked for what was supposed to be a record holiday season, and now you have warehouses full of last season’s merchandise.
This can be a huge red flag for analysts looking at inventory and marrying up the sales. Depending on your business, it can be better to be out of stock than inundated with unwanted merchandise. Analysts show the buyers this data and have them look for ways to buy prudently for the current economic environment.
Average Order Value
A drop in AOV can be slightly more subtle, but it’s a gauge of consumer confidence. Even the most basic analytics packages will give you an average order value, and a change in your product mix, pricing, or other factors could influence this.
When looking at AOV, take the aforementioned factors into account. Once again, looking at the prior week, month, quarter, and year will give you a trajectory of your AOV. If AOV is starting to slide, ask yourself if this is consumers not having money to spend or if we’ve done something to cause a drop. If it’s the first, a larger conversation about price, value, and consumer perception needs to happen with the C-Suite.
Click Thru and Conversion Rates
Has there been a drop in CTR from paid media and, therefore, a drop in overall conversion rates? As mentioned above, it’s essential to scrutinize media buys when the economy is tough.
Watch and Learn
John Wanamaker’s famous quote, “Half my advertising spend is wasted; the trouble is, I don’t know which half,” is dead. We know where we’re wasting money; we must do some simple math to get there. If the media is tanking, so too will conversion rates. Prune the losing media and double down on what’s working.
Now that we’ve looked at the low-hanging fruit, let’s talk about how you get the maximum return on analytics investment.
Analytics Aren’t a Set and Forget Magic Solution
First, be rigorous about alerts. This may seem like a no-brainer, but often analytics setups have no alerts or dozens of alerts. The trick is to find meaningful alerts (hint: see bullets 1-4 above) and monitor diligently. Too many alerts become noise, but the right alerts are your north star. Look for ways to incorporate alerts into your daily life. Many analytics tools offer email or Slack alerts. If you create an alert Slack channel, you can democratize the data and bubble things up quickly when problems occur.
Use KPIs to Stay on Track
Second, monitor your KPIs. You may not have an alert for every KPI, but that doesn’t make them any less important. Simple dashboards are often the answer for explaining problems or successes to leadership. Keep it tight, meaningful, and visually appealing. KPIs lose meaning when they end up buried in a sea of numbers. Most of us are visual learners, so make those KPIs easy to understand.
Test and Check for Better Options
Third, Optimize. Optimize. Optimize. We’ve established that it’s easy to tell when the media is working. Wouldn’t it be nice to know whether the site is working? This is where multivariate testing can be a quick and effective way to avoid regrettable mistakes. A good testing program will enable you to make small and large changes to your site without the ever-fallible gut instinct.
The Right Tools Make Deep Dives Easier
Fourth, dive into your analytics data, along with other data, such as the voice of the customer, to identify friction points in the digital experience (errors, performance, problematic journeys, etc.). Tools like Qualtrics and Quantum Metric are excellent examples of external help that will take you to the next level. As discussed in a previous post, Quantum Metric can tell you when people become slowed down, frustrated, or downright enraged with your site. Talk about insights! Nothing will give you the pulse of a customer faster than seeing what they’re doing in a session replay or simply asking for their opinion.
Your Partner for Unrivaled Digital Experiences
BlastX can partner with you to navigate uncertainty and implement analytics that will serve you in bad and good times. We do many of these things and are here to help you weather the storm. Together, we’ll unify your customer data, business intelligence, and marketing technology to create unrivaled digital experiences for your customers. Contact us today to learn exactly how BlastX will use analytics as a part of a comprehensive plan to ensure your business is ready for the future.