Will Data-Driven Organizations Please Stand Up
After experimenting with my own personal blog over the past year, I figured it was about time that I ventured into the world of corporate blogging. Some of you may have had the opportunity of attending my Omniture Summit 2009 presentation on the “7 Keys to Creating a Data-Driven Organization”. Others of you may have seen the same presentation as a free webcast provided by our marketing team.
Through an upcoming series of articles, I will examine each of the seven key success factors of data-driven organizations in more detail. But before I do this, I want to discuss why being data-driven is more important than ever for organizations and why so many companies still struggle with it.
Why Be “Data-Driven”?
In times of economic growth like we experienced from 2005–2007, too many marketing decisions were made based on intuition and gut instinct. Too frequently marketing initiatives were not tied to success metrics or even measured at all. Holding people accountable would have interfered with working on the next big project or campaign. Between the abundance of “low-hanging fruit” and the sheer volume of work to be done, mistakes could be masked or conveniently overlooked.
Now with the recent economic downturn, companies are being forced to scrutinize their marketing spending more closely. Many CMOs have had to significantly cut their advertising budgets, and they have to do more with less. They want to understand which campaigns, marketing channels, and online content are the most effective so they can get the most “bang” for their marketing dollars. In addition, more and more advertisers are shifting budget away from traditional channels to more measurable digital channels such as paid search, email, social media, etc. In a down economy, data is proving to be a marketer’s new friend.
Why Is It So Difficult to Be Data-Driven?
In my five years as an Omniture consultant working with several Fortune 500 companies, I’ve repeatedly seen how organizational issues — not necessarily technical ones — have impeded the success of many well-meaning companies in the area of web analytics. Becoming data-driven requires more than just tools or technology — it requires supporting processes and people. Too often companies obtain the necessary technology but don’t add sufficient resources or make changes to their existing internal processes or culture.
Web Analytics / Garden Analogy
When discussing the challenges that organizations face in becoming data-driven, I like to compare web analytics to gardening. Just like in gardening, people, processes, and tools are equally important in web analytics. By considering all three areas, companies are more inclined to become data-driven and successful in even a down economy.
Looking at the “people” aspects of gardening, you have the owners of the garden (senior executives) who determine what the priorities are for the upcoming “harvest” (reporting and analysis). They determine what “crops” (data or reports) are needed to sustain the organization. Second, you have the actual gardeners (technical staff) who grow the desired fruit or vegetable plants (implement the tagging strategy). Third, you have the harvesters (business analysts) who collect and distribute the “produce” to the organization when they’re ripe.
I have seen companies run into problems when executives do not participate in defining business requirements or deciding what data is needed. After the “harvesting” has occurred, it’s painful to find out from executives that key reports or metrics are missing. I’ve also seen cases where companies don’t have sufficient or effective harvesters — leaving valuable data to “rot on the vine”.
Similar to gardening, processes are equally important to web analytics. Besides planting (implementation) and harvesting (data analysis), there are several other processes that impact the success of web analytics at an organization. Your web analytics may need to be “weeded” (data validation) on a regular basis to ensure that the data is accurate. A consistent “watering” (training) schedule may be important to data adoption within your company. Just like in gardening if you skip a key step in web analytics, it can undermine a lot of hard work in other areas. What’s the point of planting an extensive garden if you’re not willing water or weed it?
From an overarching process perspective, it may also be important to think of your web analytics as an ongoing program rather than just a one-time initiative. Some companies may feel as though they have instituted a web analytics “program” but have really just launched their web analytics as a “project” (e.g., no training or requirements gathering after the initial launch).
When I refer to “tools” of a data-driven organization, I am referring to more than just enabling technologies such as SiteCatalyst or Discover. These products may be the shovel or hoe of web analytics, but I consider other utensils to be equally important to establishing and maintaining a successful web analytics program. For example, a web measurement strategy is a valuable document in ensuring a company’s online initiatives are aligned with its overall objectives and appropriate KPIs are predefined for measuring performance. In addition, larger organizations may benefit from a corporate standards document that defines how variables are allocated and how page tags are to be instrumented. Indeed, there are many complementary tools — outside of the actual analytical tools themselves — which contribute to the success of people and processes at data-driven companies.
Author Rudyard Kipling once stated, “Gardens are not made by singing ‘Oh, how beautiful,’ and sitting in the shade.” Getting your web analytics program in order and creating a data-driven company is going to require some work. In my next blog post, I will examine the first key to creating a data-driven company — securing an executive sponsor.