Although the vast majority of organisations will have had analytics and reporting functions in place for some years now, it seems many are overlooking the strategy behind their digital data.
A recent report from McKinsey identified that many business leaders are struggling to turn data into value, and that the absence of an actionable data strategy is a part of this.
This is understandable. Data’s confusing, and it takes a special kind of person to really enjoy taking on the challenge of doing a deep-dive into it.
A special person like our own Liam Galliers, a web analytics consultant with a genuine enthusiasm for using data for good.
“I reckon only 20% of the clients I’ve worked with in the past think beyond just looking at their reports on a Monday morning or preparing quarterly briefings,” says Liam. ”At the other extreme, you’ve got those who are measuring everything, but feel they don’t know what to do with all this data".
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What is digital data strategy?
“Strategy from a data perspective is simply about measuring the right things by asking the right questions,” says Liam. “like ‘What is the business trying to do?’ ‘What are the objectives?’ ‘What are the goals that will meet those objectives?’
“Every good business will obviously already have answers to these questions, and the data strategy bit starts with thinking about the next step, figuring out which data signals and metrics align to the answers.”
For example, the business objective of Widgets inc is to grow revenue.
They think they will achieve this through their goal of creating a better customer experience than their competitors.
The metrics to measure this goal is conversion rate (percentage of users who buy something), and bounce rate (percentage of users who leave the site straight away).
Focusing on these metrics means that Widgets inc have made the speed of their website a priority for the next six months, as they know that bounce rates will drop if their site is faster and their conversion rate will increase.
The benefits of a digital data strategy
Aligning data to business visions and objectives pays dividends and ensures your digital channels reach their full potential.
Done right, adopting and championing a data strategy can have a huge impact - it can help you improve customer service, sales, break down internal silos or generate customer insights. And that translates as bigger profits. One CEO of a consumer-packaged-goods company told the McKinsey survey that advanced analytics had uncovered as much as $4Bn in benefits for their firm.
In Liam’s experience it’s the smaller companies with a real desire to make a digital transformation who are more likely to be thinking about data strategy and reaping the rewards. And patience is really important.
“It takes time as it’s not just about installing analytics and a few dashboards,” he says, “It’s about a culture shift which can take from a year to four, depending on how invested the business is in making the change”. “Not having a data strategy means that digital and the company are moving in different directions, like having two dogs on a lead each trying to pull away from each other,” says Liam.
“This is an ongoing inconvenience at best but at worst, these companies are running the risk of being “Amazoned” as other, more data-savvy businesses capitalise on knowing their customers better than they do, and are nimble enough to take advantage.”
What’s for sure is that, in a year many are seeing as one in which incumbents finally start to take on big tech, implementing a data strategy doesn’t seem like a bad place to start.
Want to know more? Read about our web analytics services.