Two (Only Two!) Reasons for Analysis: Opportunities and Problem Areas
A common — and seemingly innocuous — question that analysts get asked all the time, in one form or another:
“Can you do some analysis tell us where you think we can improve our results?”
Seemingly innocuous…but what does it really mean? All too often, it seems like we have a tendency to just analyze for the sake of analyzing — without really having a clear purpose in mind. We tell ourselves that we should be doing better, without really thinking about the type of “better” that we’re trying too achieve.
I was having this discussion with a client recently who was challenging me to explain how to approach analysis work. I found myself pointing out that there are really only two scenarios where analysis (or optimization) makes sense:
- When there is a problem
- When there is a potential opportunity
It really breaks down – conceptually – pretty simply:
- I send an email newsletter once a month, which accounts for a pretty small percentage of traffic to my site (Level of Activity = Low), but that channel delivers the highest conversion rate of any channel (Results Being Delivered = High). On the one hand, that’s expected. On the other hand, is this an OPPORTUNITY? Can I send email more frequently and increase the level of activity without killing the results being delivered? Basically…can I move it into the NO ANALYSIS REQUIRED zone with some analysis and action?
- Or, flip it around to another classic: I have a high volume of traffic (Level of Activity = High) from Display going to a campaign landing page, and that traffic is converting at a very low rate (Results Being Delivered = Low). That’s a PROBLEM AREA that warrants some analysis. Should media spend be scaled back while I try to figure out what’s going on? Is it the page (should I optimize the landing page experience with A/B testing?) or is it the traffic quality (should the media targeting and/or banner ad creative be adjusted)? Again, the goal is to get that segment of traffic into the NO ANALYSIS REQUIRED zone.
- Finally, I’ve dug into my mobile traffic from new visitors from organic search. It’s performing dramatically below other segments (Results Being Delivered = Low). But, it also represents a tiny fraction of traffic to my site (Level of Activity = Low). How much effort should I put into trying to figure out why this traffic is performing poorly? “But, maybe, if you figure out why it’s performing poorly with the existing traffic, you’ll also get more traffic from it!!! You can’t ignore it. You need to try to make it better!” you exclaim. To which I respond: “Maybe.” What is the opportunity cost of chasing this particular set of traffic? What traffic is already in the PROBLEM AREA or OPPORTUNITY zone? Isn’t it more likely that I’ll be able to address one of these dimensions rather than hoping my analysis addresses both of them simultaneously?
This diagram is nothing more than a mental construct – a way to assess a request for analysis to try to hone in on why you’re doing it and what you’re trying to achieve.
What do you think?