Marketing Data vs Real Numbers

March 18, 2008

Kee Hinckley’s recent Technosocial post on the Zuckerberg/Lacy interview drew a comment that I found interesting – essentially that the analysis doesn’t fully explain what happened. That immediately hyperlinked in my mind to a recent LinkedIn question on the difference between marketing research and scientific research. There seems be confusion about when one knows something conclusively vs when one knows something well enough to take an action.

At Dell we had high transactional sales volume. We could put something up on the site in the morning and have enough units sold by noon that we’d have an analysis completed by 2pm. At Sabre we had millions of booking and ticketing transactions per month to analyze. With such a wealth of data, decision-making should be easy.

A funny thing happened to that Dell analysis by 3pm, though. Between the analysis and the decision, someone would start second-guessing. “OK, we have LOTS of transactions there…but it’s Tuesday. Aren’t Tuesdays different? And we only have morning numbers, evening behavior might be different. How many sigmas are we significant to? Nice job, guys, but do we really know enough to make a decision? Maybe we should wait.”

Your question, Mr. Middle Manager, needs rephrasing: “Do we really know enough to make a decision without risking a mistake that might make me look bad?” If you don’t act, you can’t be blamed for making the wrong decision.

For the record Dell didn’t suffer from analysis paralysis while I was there. Decisions got made quickly and reversed quickly when wrong. We understood Jeffrey Fox’s point from How to Become CEO about revocable vs irrevocable decisions. At Sabre we weren’t so good with the quick decisions, leading me to hypothesize that willingness to risk a decision was not tied to transaction volume but rather to 1) length of sales cycle, 2) size of customer base, and 3) transactional vs relationship sales model.  (No, I don’t have enough data to prove that assertion, nor do I care).

Business isn’t rocket science, and most business decisions aren’t like launching nuclear missiles. Make decisions boldly and adjust quickly. You’ll be making money and winning customers while competitors delay launching products to ensure that no one can be blamed for leaving money on the table.

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2 Responses to “Marketing Data vs Real Numbers”

  1. Tim Walker Says:

    Good points, Russ. This reminds me of two things:

    1. Jason Fried’s comments at SXSW in the vein of “Make tiny decisions.” If you decide something today, implement it tomorrow, and then find out that it doesn’t work . . . you just fix it day after tomorrow. No biggie.

    2. Bloomberg on Bloomberg about iterating their system: get it up and running, get a prototype out there, tweak, collect some data, tweak more, keep moving. More details here:

    http://is.gd/2np

    ~

  2. rsomers Says:

    Thanks Tim! The Bloomberg take on iterative innovation is great, I hadn’t read that


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