Move beyond "Can't Manage What You Don't Measure" (part I)
To my embarrassment, the first time I heard the old management adage “You can’t manage what you don’t measure”, I heard it from a competitor of mine at Unica in the web analytics space. Namely, I heard it from Webtrends’ former CEO Greg Drew.
Brilliant, I thought back then. A very good fit not just for management in general, but especially for online marketers who have to manage the process of:
- attracting visitors to their web sites,
- engaging them with the right content,
- and enticing them to convert to leads, customers, loyal customers, and high value customers, over time.
How could you make that process more successful over time if you didn’t measure where you stand now? How could you know whether a change you make to your site or marketing campaigns improved things or worsened them?
But then I came across another eye opener.
The eye opener came when I finally read the 2007 book, Competing on Analytics.
Much of the book is a long overdue overview of all the kinds of analytics that companies (and even sports teams) are running across the enterprise. But one central idea forms the basis of this book.
Namely: The role of analytics is much more than just tactical optimization of processes to increase ROI. Rather, analytics can and have formed the basis of competitive differentiation for successful companies. The authors cite for example:
- Historical cases such as Capital One who started as a “nobody” but revolutionized the credit card industry by targeting credit card offers more intelligently. Namely, as it has become common for banks since then, the idea is to use customer analytics to target credit card offers not to wealthier demographics but to more profitable prospects, e.g. those most likely to carry a balance.
- Recent cases such as Netflix who are going to battle it out with Blockbuster in the coming years on the basis of providing customers with more intelligent (i.e. relevant) movie recommendations.
In both cases, analytics are far from being a management tool. They are a leadership tool!
And that is why I am saying: Move beyond the old management adage, this Memorial Day! The old adage just falls too short.
Whether you are in a leadership role or are in an analytics role, at least ponder what analytics could do for you besides just yielding incremental cost savings, time savings, and margin improvements. Ponder what kinds of analytics could help you change the rules of competition in your industry.
It is OK if you draw a blank. But at least ponder!
Take an example. Say, you are the web analyst for Unica.com, a software vendor for enterprise marketing management solutions (and my employer). Can you change the rules of competing with SAS. Aprimo, Omniture, etc. given that you are just in a peon role tasked with analyzing web site usage???
Tough call, I must admit. Making the web site as easy to use as possible is very important, yet tactical. Hardly, the strategic basis of competition! But come to think of it, all of Unica’s software products have a web browser based user interface. So as the web analyst, why not walk over to the CTO and suggest building web analytics into all of Unica’s products. Customers who opt in would have their usage of the product be measured across all users in their enterprise, and down to the feature level. Product management can then learn:
- What features are being used, which others are not?
- If we provide customers with proactive training do they then adopt the other features which we know will be to their benefit?
- How does that help with creating loyal customers and cross-sales opportunities for other products over time?
- How long does it take to adopt certain advanced capabilities?
Should a participating customer’s use of a Unica product become less frequent, their account manager could be alerted that the customer may benefit from help, advice, training, encouragement, you name it. Classical relationship marketing applied to the software business!
And needless to say, all of this information can flow to product management for deciding future features.
By the way, this vision is already in place at many software companies. It is especially easy to realize for On Demand products (i.e. SaaS / ASP). It is harder to realize for on-premise software customers where the tools are installed at client sites. The analytics data has to be permitted to leave their firewall and come to the software vendor.
Bottom-line: with some creative thinking even a peon can advance to become a Sergeant in the competition with analytics. Let’s grill our burgers on that thought, this weekend.
Happy Memorial Day to us all!