Thursday, September 15, 2016

Here's What Your Data Isn't Telling You About Your Business

Nick Francis, co-founder of support company Help Scout, believes that “Data can serve as an impartial reality check, but it’s not a crystal ball” (Francis). In his article “Here’s What Your Data Isn’t Telling You About Your Business”, Francis illustrates that while the troves of data companies own can paint a detailed picture of where they stand and the decisions they should make, they don’t tell the entire story. While I recognize how valuable data is to companies of all sizes, I happen to agree with Francis’ position that by focusing entirely on the metrics, companies lose sight of the vision that delivered them to where they are today. I believe that firms have become obsessed with trying to recognize the greatest ROI on every decision they make by consulting spreadsheets and charts, leading them to a myopic way of running their business. This myopia has led them away from innovation and the root of what made them great in the first place. I understand that there is a certain comfort in working with data. One can easily analyze what is on the sheet in front of him and make an educated decision based off the writing on the wall. Francis writes, “What makes working on the immeasurables so difficult is information asymmetry….In the end, your decision will hinge on how deeply your company believes the immeasurables matter” (Francis 2). Anyone who is an analytic thinker will naturally shy away from the immeasurables because of the inability to quantify the impact it can have on their business. This is when companies need to get back to basics and focus on the reason they opened their doors in the first place: to help people.
                Francis explains that while building Help Scout, they needed to make a decision about their pricing model. After crunching all the numbers and pouring over data, the team made a decision. In the weeks leading up to the launch, they realized they had only focused on the spreadsheets, not how it would impact their customer’s perception of the company. They changed course and picked the other option. This example shows how wading out of the numbers and back to your core values can help get you on track. While we observe hundreds of companies pouring energy into data that tells them where to go and what to create, companies with vision can go full steam ahead on what they know works. “Great companies aren’t great because they can predict ROI: they’re great because they succeed on the immeasurables” (Francis 3). We don’t love companies because they’re most efficient with their data. We love them because of what they build, because of the vision they had that has improved how we live our lives every day. It is impossible to deny the value that data adds to companies. However, while we recognize and respect that value, one cannot forget the vision, the immeasurables, that are the lifeblood and driving force behind the company.


1 comment:

  1. Connor has provided great insight on the article, “Here’s What Your Data Isn’t Telling You About Your Business”. There are too many companies today that focus primarily on collecting and analyzing data, where they end up with a mass of data. There is such a thing as “too much data”, since those companies based its decisions off of the metrics found.

    I’ve witnessed this problem firsthand in my personal business. When I first started my athletic apparel company, there was a ton of research and industry data collection. At one point, my partner and I focused entirely on the metrics we saw on paper and devised our pricing structure and marketing initiatives off of it. We cut our prices in half compared to competitor products (without sacrificing premium quality) and launched a multitude of Facebook and Instagram campaigns focused on the pricing structure we received from the data. We didn’t realize we looked at the ROI completely wrong and should’ve focused on one major sector…the customer. We focused so much on cutting prices and didn’t focus on providing value to our customers. Sure our prices were amazing, but strangers to our brand would see a cut in pricing equivalent to a cut in quality.

    When companies focus too much on the ROI and metrics they’ve found, they soon come to realize that they are just pouring unnecessary funds into ineffective channels. Companies must focus on how customers will perceive the company and brand. There must be brand integrity witnessed from the customer’s perspective. You can’t quantify everything since there’s no actual formula. You should focus less on cost/benefit analyses and develop marketing plans with its core focused on customer value and trust.

    This doesn’t necessarily mean scratch the data you collected and focus completely on the immeasurable. Any thriving or growing company still needs data and analytics to help forecast the company’s growth plan. But, when it comes down to long-term brand image in the eyes of the customer, it’s always best to make sure the brand is providing tremendous value and trust to the customer.

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