Word to the Wise: If You Can’t Measure It, Don’t Do It
When I first began my career as a Principal for PriceWaterhouseCoopers’s internet business division, one of my main goals was to deliver value to global businesses via end-to-end software solutions. Senior executives looked to me to understand how technology could make their businesses more efficient, more connected to the global community and more profitable. What I learned from this early career experience was that if you can’t measure it, don’t do it. You can’t ask C-level executives to invest hundreds of thousands of dollars in a software solution without proving the value of that investment first. This mantra holds true for the smallest businesses and the largest corporations, and from the most junior contributors to the most senior decision makers.
As a majority shareholder of a high growth internet start-up, I put this philosophy into action every day. We measure everything. Of course, we use standard heat mapping, real-time digital observation, trend analysis, and segmentation and attribution modeling to help us ensure that our front end and re-marketing campaigns are running as optimally as possible and that we are monetizing our digital audiences with precision. However, we also have performance-based KPIs in place that reach down to our junior level content writers, accountants and human resources. Every member of my organization has goals that can be tracked.
EVERYONE HAS AN OPINION:
Everyone – including me – has an opinion. We use our personal biases of success, past experiences and gut intuition to make snap decisions every day. Sometimes, this pays off, but more often than not, making decisions without facts boils down to pure dumb luck. And, as is always the case with luck, sometimes you’re up and sometimes you’re down, because there are opinions and there are tests. In Malcolm Gladwell’s book Blink: The Power of Thinking Without Thinking, he reminds us that, “the key to good decision making is not knowledge. It is understanding. We are swimming in the former. We are desperately lacking in the later.” The good news is, if you can measure it, you can understand it.
If you believe success hinges on a good hunch, you’re already setting yourself up for failure. Overconfidence in our own abilities to judge business situations puts too much emphasis on the person rather than the process. However, to scale you must define and replicate a bankable process, because you can’t replicate people. Stated another way: the most consistently reliable and predictable path to success hinges on defensible, replicable facts, grounded in data analysis. Measuring the ROI on a CPC campaign or the take rate on your lead generation strategy helps you define success and the repeatable actions that get you strong results. Measuring data also helps you understand the difference between correlation and causality, taking the guesswork out of your strategic planning process. If you can measure it, you can learn whether your actions are having an impact … or not. It’s as simple as that. If you can’t measure it, chances are that it’s not a key performance indicator for success.
BREAKING FREE FROM AVERAGE:
If you can measure success, it means you can also measure risk. Businesses that are doing well or contemplating new ideas sometimes fall into what we call “decision paralysis.” They become terrified to try radical or new marketing techniques, because the status quo is good (enough) or they worry that emerging technology is simply too risky. Sometimes, this is true, which is why I always say, if you can’t measure it … well, you know the rest.
A good rule of thumb is to expose no more than 10% of your profitability to risk until you’ve proven the validity of your actions. This is especially easy to do when you’re testing web enhancements or campaigns, because you can simply segregate a percentage of your digital traffic toward different experiences. When all of your actions are measurable, you can win, lose and learn quickly – and then extrapolate the results tenfold.
Miami entrepreneur, Burton Katz, is the majority shareholder of a high-growth internet start-up company that focuses on content, data and commerce. Having developed, managed and operated over 200 websites, Katz has created a network of web properties across many verticals. He has achieved success by building a scalable Customer Acquisition and Data Monetization Platform, that has efficiently turned high-volume transactional clicks into lifetime value customers. Katz has also pioneered the development of extensive publisher relationships within the burgeoning territory of content marketing and contextual commerce. The company currently acquires 30,000 new consumer records each day, across it’s owned and operated websites.