In today’s data-driven world, it’s tempting to accept statistics at face value, like badges of honour. “We’ve seen a 20% boost in conversions!” may create applause in the boardroom. But are we celebrating too soon? It’s time we pull back the curtain on the narratives hidden behind these figures.
Imagine an ad agency flaunting a surge in conversion rates. A promising story, until you uncover that the advertising budget doubled to achieve this ‘win’. This reveals a crucial lesson: numbers alone can be deceiving. The real magic lies in the intricate dance of cost, effort, and result, often left untold in that top-line percentage.
Similarly, website traffic can be another mirage. A 20% boost in visitors might make a marketer’s day until they realise that the uptick is due to a viral blog post that, while popular, has little to do with the company’s core offerings. The actual business benefit from such traffic may be limited since these visitors might have little to no interest in the product or service being sold. Moreover, tools and metrics can sometimes betray. If an analytics platform, due to recent changes, begins capturing any form submission attempt as a conversion, it can paint an overly rosy picture. Making strategic decisions based on such skewed data can be disastrous.
At their core, statistics simplify complex scenarios. They offer a neat summary, but often lack the context of the journey to that end result. That journey, rich with nuances and external variables, is where the true insights often lie.
Another trap that businesses often fall into is the lure of percentages without absolute numbers. A startup, for instance, might celebrate a 100% increase in sales. But if that’s a jump from 10 to 20 units, it’s a far cry from a business that sells 10,000 units and sees a 10% growth. Both scenarios are growth, but their scale and implications can be vastly different.
Additionally, the temptation of drawing quick conclusions can lead to conflating correlation with causation. Just because two trends occur simultaneously doesn’t imply one caused the other. For instance, if a company notices a rise in sales alongside an increase in website visits, it might be tempting to assume the latter led to the former. However, without deeper analysis, it’s premature to draw that conclusion. The sales spike could be due to an entirely different reason, like a successful email marketing campaign.
Conversion Rate Optimisation (CRO) is like a focused spotlight in the wide world of data. It tests different versions of web pages to see which one performs best. CRO allows for a controlled environment where specific changes can be isolated and their direct impact on user actions can be measured. This means we can be more sure about what’s working and what’s not. Instead of guessing if A led to B, CRO helps prove it, making decision-making clearer and more informed.
We all have a tendency to seek out information that confirms our pre-existing beliefs. Without context, it’s easier to cherry-pick data points that align with our views, leading to skewed decision-making. Being strict with what KPI’s you measure on a weekly or monthly basis from the start can help counter this by enforcing a wider view of the performance, helping to go against the nature to cherry-pick and shining a light on what looks to need improving.
So how do we ensure that stats are not just numbers but actionable insights? The answer lies in context. Here are a few steps to follow:
To wrap it up, while statistics offer a window into the state of affairs, they are merely the starting point. Understanding the stories they hint at, the context in which they exist, and the myriad factors influencing them is key. Only then can we harness the true potential of data and steer our businesses towards informed and impactful decisions.
Written by our Stat man, Adam Clifton.