Using analytics can help you see a shift in your metrics, either positive or negative.
- Asking the right questions: finding discrepancies and questioning your data results.
- Why has your average new orders dropped?
- Why are you seeing less new visitors to your site this quarter?
- Generating hypotheses: drawing a conclusion about your question that can be tested and evaluated.
- Example: I’m driving less new visitors because I’m spending less on paid traffic.
- Example: I’m driving less new visitors because my website is loading slowly.
- Then, test and evaluate your hypothesis.
- Contextualizing data: identifying and recognizing factors that could influence your data.
- Example: I see a downward trend with my site visitors. What could possibly have changed?
- Has something changed in my business? A competitor’s business?
- Site changes and strategy changes: think about these before coming to a conclusion.
- Data lies and it always will. But by contextualizing you’ll see the natural bumps and valleys and see the real trends in your information.
- Testing and evaluating: reviewing drill down metrics and relevant information to prove or disprove hypothesis.
- See if what you assume has happened.
- Look at deeper dive metrics and see if the hypothesis makes sense. If so, what can you do to take advantage of what you learned.
Here at Up Automation, we have discussed the importance of using analytics to drive data-driven decisions. Analytic decision making is not just looking at raw data and deciding. It requires a flow of a thought process and proper analysis to ensure you are using data well.
Analytic Decision Making Flow Chart
Step 1: CHOOSE YOUR FUNNEL STAGE
- This is the place where you want to be optimizing if you are…
- Not driving new leads.
- Not driving enough people to the middle and turning them into leads.
- Not driving enough people to the bottom and converting them.
- Decide where you want to take action and prove something.
Step 2: REVIEW KEY METRICS
- Once you decide where to focus your efforts, review the metrics to let you know what is actually happening.
- For example: if your average order value dropped 13% (at a time you expected more buys), this should tip you off that something is wrong or needs to be remedied
- For example: Core offer conversion rate is down 5%, you know your business is underperforming.
- You’ll often see the metrics in the same stage dip as something has changed.
Step 3: FORMULATE YOUR QUESTION
- Think about what you are trying to figure out: What changes you are seeing in your key metrics so you can properly question them.
- The question you chose to ask, sets the stage for the hypothesis you generate and ultimately tells you whether you’ll be able to test and improve your business with that testing. Just like 8th grade science class basics!
Step 4: CONTEXTUALIZE WITH THE ANALYST’S TOOLKIT
- This is a series of questions to ask yourself, to help you look at the data:
- What might be influencing the sale?
- What might cause the avg. order value to drop?
- Did we change a promotional strategy?
- Are we spending less money on paid traffic?
- Is this a buying trend that is happening historically? Externally? Internally?
Step 5: FORM A HYPOTHESIS
- Take your question: what’s going on with the key metrics?
- Take the context. For example: You know order value is down but you also know that traffic is NOT down.
Step 6: REVIEW DRILL DOWN METRICS
- The KEY METRICS act as flags.
- They indicate when you need to take a look at something. You’ve got a baseline and a key metric, and you see a big shift from what you are expecting to see, that’s the flag.
- The drill down metrics are the tools to actually dig in and figure out what’s going on. Look at more minute things:
- What kind of traffic is coming to the site?
- What kind of actions are they taking?
- Are they reading our new content?
- Who is reading it? Who is interacting with it?
- How is each individual funnel performing?
Step 7: PROVE OR DISPROVE HYPOTHESIS
- It’s rare that your first hypothesis will be tested and shown to be the answer to your problems.
Often you’ll go back and form another hypothesis and test it. Check multiple hypotheses even if the first one was correct.
Step 8: APPLY INSIGHTS
- Stick with the process: Look at the funnels, look at the metrics. Figure out what is wrong.
- Apply what you find to improve your website, your customer experience.
- Improve and build your business.
Use the Right Lens: an Analytics Toolkit
A huge mistake is to take a large collection of data and misapply your findings. In order to help analyze your data well, consider some of these analytic lenses through which to see your data.
Take your boring spreadsheets and turn them into stories by asking questions of what’s happening and what the different factors are that may be influencing or shaping what you’re seeing. This will give you the context that you need to analyze your data.
It’s important to note that data does not start out perfect. There will be inherent flaws in the numbers you are pulling. There’s no escaping this! Even if you follow every analytic process perfectly, you will not have perfect data.
Decision making requires context. The toolkit gives you context:
Historical lens: Historical data looks back at existing data and uses that to shape what you are seeing right now.
- Raw numbers v. percentages
- If looking at new visitors to your site, compared to last year, and looking at raw numbers (total number of new visitors), you’ll likely say “wow!”
- Then convert the raw number to a percentage: what percentage of visitors coming to my site is old vs. new? Number may dip.
- DO: talk in terms of ratios to compare data sets of different sizes to get a better understanding of what’s going on.
- Baselines skewed by outliers?
- Remove the numbers that are dramatic or heavily weighted, even if true, to understand the general trends you see.
- But—remember that the outliers exist to make changes as needed.
- Data correctly pulled?
- If number seems odd, pull it again. Likely it was manually input incorrectly
Transitioning From Reactive to Proactive Analysis
Regarding the Analyst’s Marketing Funnel, where each part of the funnel has its own metrics and separate goals, as you try to be a more proactive business, you need to leave behind the reactive strategies of these numbers telling you about this stage.
- Start thinking holistically. That is, your business as a whole, a complete organism.
- Where every part influences each other.
- Every part is connected.
- When something happens here, it influences everything that happens elsewhere.
- Become Proactive
- Understand the analyst’s funnel is connected: the analyst’s funnel, and all funnels, do not exist in a vacuum, all the parts work together.
- From a visitor to a customer to a multi-buyer: all of these stages are connected.
- Start with goals, then reverse engineer: use your desired end result to map out what success looks like.
- Work backwards to determine what to do at each different stage of the funnel.
- It doesn’t need to be revenue-tied; it just needs to be something you believe to be accomplishable AND something you can reverse engineer back to reach that goal.
- Track and optimize along the way: use your analyst skills to improve performance at every stage to hit and surpass your goals.
- Don’t start with the optimizing and tracking. Start with a plan for what you want to accomplish.
- Then figure out where to optimize, looking at the numbers you tracked and figure out how you can build your business.
- Use your analyst skills at the END of the planning, at the END of the reverse engineering process, to improve performance at every stage.
A business without data cannot grow. But more importantly, not using the data well is just a waste of time and waste of resources. By using these tools and analytical lenses, you will be able to start making smart, informed, and effective decisions to get your business growing and successful.[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row admin_label=”Row” make_fullwidth=”on” use_custom_width=”off” width_unit=”on” use_custom_gutter=”off” padding_mobile=”off” allow_player_pause=”off” parallax=”off” parallax_method=”off” make_equal=”off” parallax_1=”off” parallax_method_1=”off” column_padding_mobile=”on”][et_pb_column type=”4_4″][et_pb_post_nav admin_label=”Blog Navigation Section – Do Not Touch” saved_tabs=”all” global_module=”116279″ in_same_term=”off” hide_prev=”off” hide_next=”off” prev_text=”Previous Tip” next_text=”Next Tip” title_font=”Montserrat|on||on|” title_font_size=”20px” use_border_color=”off” border_color=”#000000″ border_style=”solid” /][/et_pb_column][/et_pb_row][/et_pb_section]