In my previous post, I introduced a “path to value” diagram (see below), showing the different key steps required to achieve value from your web analytics investment. The first “domino” in the process is data. Originally, I felt it was well understood that your business goals shape or inform your data collection, but upon further reflection I felt I needed to more explicitly highlight the importance of strategy in the process.

My first thought was to add another domino before the first data domino. However, as I thought about it more, I feel strategy is something far more encompassing and influential than just an initial step in the process.  Strategy truly impacts all of the dominoes, and it is the foundation for all of the steps in the data-driven path to value.

In order to show how strategy is the foundation for all data-driven activities, I’ll walk through all five of the critical areas and identify how strategy influences each one in different ways.

1. Data

In order for the web data to be useful, relevant, and complete, it needs to be tied to the online strategy and goals of the organization. As mentioned above, a web measurement strategy ensures the implementation or set-up of the analytics and optimization tools are aligned with key business goals. No organization wants bad data. Irrelevant and incomplete data can be just as bad as inaccurate data.

2. Reporting

Without knowing the strategy or business objectives of a company, it is challenging to build meaningful reports and dashboards. The best reporting and dashboards are finely tuned to measuring the performance of the business. If you’re not careful, over time reporting can become disconnected from the current online strategy and business goals.

From time to time, the web analytics team may be asked to re-create a particular report for continuity reasons. Before moving heaven and earth to accommodate the request, someone needs to hit the pause button and ask “why does this report exist?” and “is it still relevant to the business?” Rather than replicating historical reports, which are based on an outdated strategy with potentially different (and probably forgotten) business goals, you need to determine if those reports should be replaced with more relevant, meaningful ones tied to the current online strategy.

3. Analysis

Analytics tools such as SiteCatalyst, Discover, and Insight provide a rich set of web data for companies to analyze. In most cases, you have more data than you know what to do with. In addition, your analyst team has multiple analysis requests pouring in each day or week from different parts of the business. When analysts have a clear understanding of the online strategy and key business goals, they can prioritize which analyses to pursue, postpone, or ignore. Most companies have limited analyst resources so knowledge of the business strategy is critical to ensuring that they use their time efficiently. It’s easier to push back when analysis prioritization is based on what’s most important to the business. Keep your analysts’ eyes focused on the prize.

4. Action

Analysis is only valuable if it is acted upon. Strategy influences the actions that companies take once they have useful analysis insights to act on. Similar to how strategy can guide prioritization for analyses, it can also help prioritize which recommendations to pursue or which tests to run in Test&Target. Strategy can also instill a greater sense of urgency among the teams executing on any recommendations. With a shared understanding of the key business objectives, marketing and IT teams can rally around strategic projects, which need support in “jumping the queue” over lower priority projects.

5. Business Value

Strategy determines the maximum potential value that a company can achieve from its data-driven initiatives. A poor or weak strategy will limit the overall potential value. You can be solid in all other areas (e.g., great implementation, insightful reporting, skilled analysts, action-oriented teams, etc.), but the business value generated will never exceed the boundaries set by a weak strategy. On the other hand, a sound strategy can provide endless value to an organization. The capacity of the data, reporting, analysis, and actions to drive value for the company will ultimately be defined by its strategy.

Yin and Yang

An interesting thing happens when a company’s strategy influences all of the key areas in the path to value. At first, data will begin to guide or optimize business tactics. Then eventually you will see insights from the data shaping or influencing your business strategy. A symbiotic relationship between the strategy and data is formed – a sort of optimization yin and yang. Both areas need to be balanced so that they can complement and benefit each other.

For example, no matter how quickly or smoothly the implementation goes, it’s all worthless if the data isn’t closely tied to the business strategy. Without the influence of a well-defined online strategy, data, reporting, analysis, and actions are not going to drive the anticipated levels of value. As Peter Drucker poignantly stated, “There is nothing so useless as doing efficiently that which should not be done at all.” When analytics resources and time are constrained, having a clear strategy is critical to data-driven success. It will make sure your company is measuring and testing the right things, and then over time the data insights will start to refine and improve your online strategy.

Strategy informs data. Data informs strategy. Yin and yang.

Adam Egbert
Adam Egbert

Great Post, Brent! Often, I find clients either do not have a consistent strategy or do not follow the strategy in place. The result is the dominos fail to connect and full value is not realized. Execution on that strategy is essential. Best, Adam Egbert Technical Consultant Adobe Consulting Services