A great product, combined with a data-driven marketing strategy, is the key to success for any modern web company. Today’s top companies are turning traditional marketing philosophies upside down and using data to drive sustainable and traceable growth. Marketing is now a science, and not just an art.
Considering marketers have the resources to track just about every action and result, I am a big advocate for the implementation and analysis of analytics within all organizations. However, my recent ventures and experiences have proven that you shouldn’t hire a director of analytics. The position is best suited for outsourcing to an agency partner.“Analytics is the perfect agency position.” http://bit.ly/1Fj88D2 Click To Tweet
What is a director of analytics?
A director of analytics has two main objectives:
- Acquisition: Understand where users come from, why they came from there, the correct messaging, and the actual flow of becoming a registered user. In other words, they increase conversions. Typically this involves analyzing attribution, messaging, and conversion rate optimization data to present to the product and marketing teams.
- Retention: The experience, value, and communication points must be studied and enhanced to improve customer LTV, overall experience, and, of course, an excellent net promoter score. Doing so will not only increase the revenues per customer, but will also confirm that we have raving fans to help you grow and a product or service that provides real value.
Why is a director of analytics so important? Analytics focused teams collect important information and collaborate with executives and other departments to help create data-driven decisions. These teams are excellent at identifying patterns and digging through data to find risks and opportunities, as well as making performance-based recommendations. The result is organizations with a strong understanding of KPI’s, customer lifetime value, conversions, and measurable actions that affect the bottom line.
Analytics focused companies are fueled by data and “Smart Marketing” instead of risky and expensive growth ideas based on assumptions. An analytics team must exist in one way or another.“The result is a company that is fueled by data and 'Smart Marketing' instead of risky and expensive growth ideas” http://bit.ly/1Fj88D2 Click To Tweet
Why you should outsource a director of analytics
If this work is so important, then why should it be outsourced to an agency? Having been a founder of a SaaS company, a director of marketing and analytics, and now a partner in an analytics and growth consultancy, I’ve experienced analytics from every angle. One thing continues to stick out to me (and it is the reason I am writing this post): Analytics is all about expertise, experience, and answers. Unlike most roles, which are either product or customer focused, analytics requires an unbiased Q&A approach. When handled internally, this process tends to be extremely biased. You need to get your heart out of the way and listen to the numbers. That is a big problem for in-house teams, and I have found that a good analytics consultancy will provide valuable answers.
“Analytics requires an unbiased Q&A style approach. When handled internally, this process tends to be extremely biased.” http://bit.ly/1Fj88D2 Click To Tweet
We all know how hard it is to hire great people (we are hiring). It may take an entire team to build the array of skills needed to properly execute and analyze valuable metrics. From AB testing, CRO, and analyzing traffic, to qualitative analysis, a group of experts can bring many valuable skills to your organization. Currently, this process may require recruiters or employees who understand advanced analytics (not just Google Analytics) to find the right candidate to make major decisions in your organization. A bad choice can become extremely costly and turnover can last months.
From my experience, I’d estimate that 95% of the companies I’ve worked with that have implemented advanced analytics such as Mixpanel and KISSmetrics have done so incorrectly. The result is inaccurate or irrelevant data that can lead to bad decision making. So, if you don’t hire the right person to implement your analytics, your money and time could be at risk.
Experience plays a crucial role in analytics and testing. Sure, an internal marketer can execute an AB test, but the execution is the easy part. Where most companies fail is interpreting their data to create new hypothesis and tests. Agencies have seen it all, thousands of successful and failed tests, traffic irregularities, and scenarios that allow experienced analytics professionals not only to find the answers fast, but drive results quicker (Ask me how I recently doubled a client’s conversion rate with one AB test). Everyone tells you to fail fast and learn, but experienced marketers also have a lot of successes, and success is ammunition for more success. Don’t just fail fast, succeed more often!“Don’t just fail fast, succeed more often!” - @danielmcgaw http://bit.ly/1Fj88D2 Click To Tweet
You need answers yesterday. At my previous venture, we spent over two months defining the team, KPI’s, and tactics to execute our analytics strategy. We need data for data-driven decisions, but ended up spinning our wheels on logistics. Although they are a newer concept, analytics agencies are proving to be the fastest way to implement and analyze data. In hindsight, we should have use an agency to provides the answer we needed, fast.
What is an analytics agency?
Analytics agencies are a vision for the future of marketing, where data and technology are the keys to growth. This happens in three phases:
- Implementing advanced analytics to collect clean and accurate data.
- Create insights by analyzing and interpreting the data to create a tailored data-driven strategy.
- Analyze the data to create actionable growth tactics. These tactics have been defined by data, increasing their success rate, and monitoring ability.
Analytics agencies are allowing fast moving startups to execute on data-driven insights with advanced conversion and user data without having to stray from their focus on their product and growth. From the smallest 2 person companies to the massive Uber’s of the world, data is the key to scalable growth, and should be the driving factor in your decisions as well.
What steps is your team making to operate smarter and faster? Leave us comments below.
Disclaimer: Daniel is a partner of McGaw.io, an Orlando based analytics agency that drives data and growth for some of the world’s best SaaS companies.