Planning to succeed with Analytics

Analytics and insights play into the business planning cycle in more ways than most organizations apply. It is a standard practice to use historical data and known events to prepare outlooks for the upcoming year. However, success metrics can be utilized to make business planning more robust and measurable. Businesses should identify a set of metrics that are bound to change during the course of the year, primarily from, shifting consumer, market and corporate needs. It is also imperative to earmark the metrics that cannot be influenced during the year and define appropriate measures to control the impact of these “fixed” variables on overall quarterly/yearly goals.

Pitfalls may come from unknown market forces – shifts in economy and consumer sentiment impacted overall usage patterns for online businesses in 2008 and 2009, thus significantly reducing the bottom line. In such times, it became imperative to focus our efforts on targeting and relevance to drive higher conversion and better average revenue per user (ARPU) to ensure viability. Ignoring the obvious may also lead to a lot of pain – for instance, drops in online shopping impacted not just the number of items sold, but also lower cost per clicks (CPCs) for online retailers and aggregators. The other hurdle, in my experience was, when external partners started to rewrite deals to cut costs, leaving us with no choice but to find innovative ways of managing/achieving our revenue and OIBDA goals.

As part of the annual planning, it is important to keep an eye on the key variables that “we control,” in order to be able to react to unforeseen market conditions and/or revenue dips. We started to listen more to our consumers and reacted appropriately to provide more engaging experience thus driving incremental revenue to offset the losses. The frequent A/B testing and agile project management to incorporate resulting recommendations assumed a whole new meaning. It also highlighted the need for a nimble annual planning process and metrics tracking/monitoring, so we are not caught with our pants down when; market softens, consumers leave, partners bail and corporate goals are “reorg’d.”