Data vs. Information

Numbers don’t mean anything, in isolation.

If I tell you that your website gets 3,200 hits per month, is that good or bad?  How do you know?  You’ve got the data - what’s the problem?

Often, data is mistaken as information - a leap in logic that results in improperly drawn conclusions and frustration with the data collection itself.  However, the data’s not to blame - it’s the failure to translate that data into information that’s the culprit.

We love numbers.  We want analytics on our website so we can see how many hits we get.  The big letdown comes when we realize there’s no context to consider the data inside of - nothing at all to translate data into useful information.  This is why strategy is so important (and so hard).  Strategy and goals are what provide context around data and make it useful.

Two areas I’ve seen this happen often in are web analytics and surveys.  Web analytics, as mentioned earlier, often end up useless because the owner of the site never thought about what data would be important and what benchmarks and goals the numbers should hit.  Is 3,200 visitors to your site good? Sure it is, if your strategy is to get a 10% market penetration into pygmy water buffalo farmers.  If you know there are only 10,000 of these people in the world, 3,200 visitors is damn good.  If, on the other hand, you’re Chevrolet, it’s probably not.  (Also, don’t get caught up on visitor count.  Visitors don’t mean much, conversions and user actions are where the paydirt is.  Think critically about what data you need to evaluate to assure that you’re meeting some sort of user engagement and conversion benchmarks.  10,000 people walking into a store everyday and buying nothing makes for a short-lived business).

Surveys are just as bad.  I’ve seen countless surveys conducted that result in useless data, because the survey creator never considered what information they were looking to extrapolate out of the data.  Every question you ask in a survey should result in you taking some action based on the information pulled out of the data.  Asking questions like gender or race are probably useless (unless your product’s success depends on you targeting a group of customers based heavily on this criteria - for most businesses, however, this isn’t the case).  Think about what problems you have, what information you need to make a decision, and design a way to collect the right kind of data that will allow you to glean that information.  It’s shocking how many people don’t do this.

When it comes down to it, information is just data with context.  Context is almost always determined by strategy, which means deliberate and thoughtful planning.  Be careful not to abuse the glut of numbers you have access to.

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Posted Friday, August 28th, 2009 under Business, strategy.

One comment so far

  1. Amen…

    I like to boil down Web Analytics for clients into three steps:

    1) Collect data.
    2) Analyze.
    3) Provide actionable insight.

    But even those three steps all depend on setting up goals and having a strategy.

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