One recent study asked businesses to highlight which skill was most in demand in the online marketing world. The biggest gap that nearly 40% of companies noted was analytics capabilities. As the most desirable skill, this is an important message to job seekers. But it’s also critical for entrepreneurs and business owners to ask: are you using the analytical capabilities necessary to position your business for success? Do you have access to these insights from a current member of your team, and if not what are you doing about it? One solution that many companies find helpful is working with an outsourced data consultant. Here’s a closer look at what you need to know and how to ensure a successful collaboration.
The Utilization Gap
An article on Forbes highlighted an extremely important fact: the only data that matters is data that your company uses. We live in the age of big data, where we can and do collect information on every level of our businesses. But only a specific cross-section of that data is actually useful, and going to provide insights that we can take action on. Every company will have something of a utilization gap, collecting more information than they actually need and are able to leverage. But smart data planning is about narrowing the utilization gap as much as possible, so that the data you need is collected, analyzed, and efficiently fed into your decision making processes.
The Role of the Outsourced Data Consultant
Fortune 500 companies can afford to have experienced data analysts on staff to help measure everything from buyer audience data to social media performance. For smaller businesses, a full-time employee may not be practical or even desirable. A competent outsourced data expert can provide support throughout the data life cycle. If your company is unclear about how to best utilize these services, here’s a closer look at the services consultants offer:
- Perform a current analysis of your business model and data sources, identifying gaps, redundancies, and data priorities.
- Understand your business goals, and develop data systems that collect the necessary information to make decisions in priority areas.
- Create a customized plan based on the latest approaches and techniques using the science of testing as a foundation.
- Select the tools and infrastructure needed to do data collection.
- Address your company’s culture around data focus, sharing, and integration into business processes.
- Provide training and support to your in-house team.
- Develop interfaces that simplify the ongoing monitoring of data reports and information.
- Design testing on specific conversion points.
- Monitor the progress on active tests.
- Conduct analysis of testing and tie it directly to your most pressing business questions.
- Introduce lean thinking and laser targeted approaches to data analysis.
- Manage ongoing testing programs that introduce incremental improvements into your conversion funnel.
While this list is by means comprehensive, it gives you an insight into the range of ways that entrepreneurs work with data consultants: from thought partners on defining data parameters and designing programs that’ll get the information they need to make critical decisions to much more hands-on test implementation and analysis.
The Lean Data Approach
Eric Reis’ book The Lean Startup introduced the idea of running a lean business into the overall entrepreneurial conversation. It’s important to bring this into your company’s conceptualization of how you approach data collection and analysis. The right consultant for your business will help you develop a plan that’s right for your business, without overinflating the project. In a sense, you want to determine what a fitness professional might call the minimum effective dose of data to achieve your company’s objectives.
Your discussion should start with the key performance indicators (KPIs) that matter the most of your business. Avoid what are commonly called vanity metrics – these are factors like page views. It’s nice to see an increase in page views from any given activity, but this metric in and of itself doesn’t contribute to your bottom line. Instead, choose a consultant that focuses on metrics that relate to your most urgent goals and have a measurable impact on your company’s revenue and profits. These could include:
- New account subscriptions
- Purchase rate
- Email conversions, opens, and clicks
- Shopping cart checkouts
There’s one caveat to bear in mind. While you want a data program that’s focused on KPIs that drive your revenue, you also want a program that recognizes that every business has a complex universe of possible conversions. It’s important to focus on the sale, but not to over focus on the sale. Data about micro-conversions on the way to the sale can catalyze your funnel and ultimately yield a bigger ROI over time. A consultant that balances these two aspects is the right partner for any company that’s investing in growing its data capabilities.
Launching Your Relationship with a Data Consultant
There are some basic aspects to keep in mind when selecting a data consultant. Consultants come with a wide range of backgrounds in this space, from years of hands on experience to academic qualifications. At a minimum, you want to work with a consultant with an established business and brand, happy clients, and a track record with entrepreneurs in your general space. If you sell tires online, you don’t need a tire data specialist, but you do need someone that understands the eCommerce world.
Top data consultants have three primary areas of expertise. The first is technological and statistical, and has to do with designing and implementing the programs your business needs. He or she will be comfortable working with a wide range of tools, and be able to manipulate statistics and numbers. Second, this is paired with the ability to understand businesses in different industries (or within a specific vertical if they have a narrower focus). The consultant needs to be able to appreciate the challenge that businesses face, and to tease out the data strands that can bring real insights into what’s working and what needs to be improved. Finally, you need someone with people skills. A good communicator that can help you translate the data into what it means for your bottom line and overcome resistance within an organization to testing or build consensus around a particular path is invaluable.
Data is more critical to your company’s success than ever before. But for many entrepreneurs and small businesses, adding full-time analytical talent to your team isn’t practical. Working with an outsourced data firm can be your starting point for developing a KPI strategy, designing tests, and getting the insights needed to transform your business.
Have you worked with an outsourced data consultant? Let me know about your experience (and tips for successful collaboration) in the comments below.