Friday 18 December 2009

Right-on Reporting

“If you can’t measure it, you can’t manage it”. This is a phrase you should always bear in mind when you’re evaluating the performance of your business.

Far too often companies only have sight of top level data, so when the boss asks “Why are sales down 10% on forecast this week?” people are left to come up with their own pet theories - these usually involve blaming everyone and everything else from Postal Strikes and the Recession to the catering company, rather than the usual answer that the forecast was based on hope rather than fact.

The more detail you can break any activity down by, the better placed you will be to identify what’s causing the problem and solve it.

The key is to focus on what makes a material difference and not just on what is statistically significant.

I encountered a perfect example of this at a company where an agency was asked to come up with a ‘pen-portrait’ of a customer segment based on their profile compared to the base as a whole.

2% of this group had expressed an interest in Fitness compared to 0.5% among the rest of the base, so the agency’s illustration of this segment was of a man on a running machine. The information would have been invaluable if the company was in the Fitness industry (it wasn’t) but gave a misleading picture of the segment as 98% hadn’t expressed an interest in Fitness. The information was statistically significant, but a look over it would have confirmed that it didn’t reflect that segment as a whole.

Ultimately, track and report everything, but don’t sweat over the little things. However, if you don’t measure it at all you won’t be able to separate the truly important from the interesting but irrelevant.

Dig into the detail but know when to stop.

Dan Barnett,


Analysis Marketing Ltd

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