Everyone in business has heard talk about “big data.” There is no question that we know more about our customers, their buying patterns, their media usage – heck, just about anything – than ever before. It’s easy to get trapped into micromanaging all that data which will overwhelm even the best systems and the smartest analysts. So today I’m going to try to get you to follow some great advice from Thoreau:
I do believe in simplicity. It is astonishing as well as sad, how many trivial affairs even the wisest thinks he must attend to in a day; how singular an affair he thinks he must omit. When the mathematician would solve a difficult problem, he first frees the equation of all incumbrances, and reduces it to its simplest terms. So simplify the problem of life, distinguish the necessary and the real. Probe the earth to see where your main roots run.
He wasn’t exactly talking about big data, but he might have been. In my mind there are really only two numbers that matter. While I’m going to speak of them in web terms the reality is that they apply to every business as I will explain. They are:
- Conversion Rate
That’s it. Multiply those two and you get a measure of success. The first is how many opportunities you have to create a successful interaction; the second is the rate at which you do so. That successful interaction can be a newsletter sign up, a sale, a social share of some content – you will need to define it. Taking the number of times that successful thing happens and dividing it into the number of people who potentially might have done it (your traffic) gives you a conversion rate. Simple!
You would be surprised how many of the analytics accounts I’ve looked at over the years haven’t set up goals, and without goals there are no conversions. It’s not just web-based businesses that can do this. Retail can count foot traffic and numbers of sales, for example. Numbers of customer service calls with a successful (in the customer’s eyes) resolution. Once you’re focused on measuring traffic and conversions, you can place everything else you do in marketing in those contexts. More traffic without conversions is useless. More conversions from the same traffic is fantastic.
Big data is great and I use it all the time. As with all things, however, start with the simple, which often gets overlooked – the necessary and the real, as Thoreau says. You agree?