Paralysis by overanalysis. It happens to gamblers in the Vegas sports books. It happens to everyone who plays fantasy sports. It happens to all types of people in many different ways. It occurs when people have too much information – overanalyzing to the extent they outthink themselves until they are completely lost.
Paralysis by overanalysis happens to companies, too. And it’s happening more often thanks to the advanced research and analytics tools available. While big data has provided amazing intel that can lead to great business success, it’s critical to understand how to use it.
Having a wealth of data is a good problem to have, but not knowing how to maximize it can muddy the waters – and lead to paralysis that can halt a company’s progress. Organizations must have a sound method and process in place. There are five keys to making big data work for you:
- Start small. Don’t instantly try to make the leap to predictive analytics. Start by studying past performance and identify exactly what events took place during the time period – things like advertising, promotions, PR campaigns, etc. Track where you’ve seen changes in performance and begin to identify where there is a relationship.
- Take a step back. There is typically some piece of data that is one or two steps away from sales performance. For most companies, it is as simple as increased search or increased Web traffic. See if you can draw correlations to your marketing and communications activities to those precursors of sales.
- Visualize. Relationships can be much easier to identify when visualization tools are used. These can be as simple as charts in Excel to more sophisticated visual software like Tableau and Visual.ly. Looking at massive spreadsheets with thousands of data points can make anyone go blind. Let software work for you.
- Don’t give up. Working with big data is the perfect mix of art and science. Trial and error is required to crack the code. Successful correlations and relationships can come from weather trends, traffic data, seasonal changes, emerging technological advancements and more.
- Make sure the data streams you analyze have an actual relationship to your business. An old theory suggested the winner of the Super Bowl had a correlation to the stock market’s performance. By that premise, one should be able to make savvy investments based on the winner of the Super Bowl, right? Not so. There is no direct relationship from a sporting event to business performance. It would be a waste of time to study unrelated data in hopes of finding predictability.
Despite all the information available, companies can avoid paralysis by overanalysis. Start small and don’t be frustrated by failure. While every marketing and communications investment is ultimately a bet, big data can help tip the scales in your favor, giving you a better chance of avoiding the familiar traps of investing blindly. Those in the Vegas sports books, however, will have to figure out their own system.