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By Thomas Baekdal - July 2013

Don't Optimize When You Need to Change

One of my pet-peeves about the world of analytics is that we spend far too much time on 'optimizing', even to the point where it's distracting us from making the right decisions.

One of the big problems with analytics is that it's reactive by nature. Every report you look at tells you about something that happened in the past. In my recent Plus report about 'your most important marketing channel', I illustrate how this can sometimes leave us astray from our real goal.

Let me ask you a simple question. Do you feel like your brand has reached its full potential? Have you achieved market dominance, or at least market leadership? Are you transforming people's lives and have your established yourself as the go-to place?

No? Well... welcome to the club.

The simple fact is that most brands are maybe operating at 20% of their full potential (which is probably even a high number for many). But instead of doing something about that, you are spending all your time chasing small incremental changes through tiny optimization techniques.

You do A/B testing of how your product page should look, where the buy button should be, and whether the front page should have one big product feature or 5 smaller ones.

All that is good, it may even help you achieve an extra 10% in sale. But 10% extra of 20% is still only 22%. You are not really making a difference.

As an analyst, I absolutely love data. I spend most of my time with data. I can get totally giddy if I can play around with a really big and complicated data set, trying to find that elusive pattern that explains what caused something to happen.

Data is fun!

But too many brands are wasting their time optimizing the little things, when they should be focusing on fixing the larger issues. Look at Nokia. They tried to capture the smartphone market by optimizing their existing handsets.

Apple, on the other hand, didn't try to optimize their business. They decided instead to change it, and look what happened. (Although, one might argue that optimizing the past is exactly what Apple today)

Kodak tried to optimize their business for digital cameras by optimizing what they already had. They failed.

Blockbuster tried to capture their future by optimizing their existing channels, they also failed.

Most newspapers are trying to become digital by optimizing their current models, most are failing.

Amazon, a company famous for hyper-optimizations, still went ahead and created the Kindle, Amazon Web Services, Amazon Prime, and many other ventures. They are succeeding.

Google, also a company that is constantly hyper-optimizing, no longer just do search. Every time they realized that there was a bigger potential ahead of them, they jumped the chance to change. Google Cars, Glasses, Google+, Adwords, Gmail, Google Drive, etc... all products that you couldn't make by optimizing what you already have.

But, sadly, too many brands spend so much time optimizing what they already have that they forget to look up and see their real potential.

You can't optimize change itself, you can only optimize what has already been changed.

 
 
 

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Thomas Baekdal

Founder, media analyst, author, and publisher. Follow on Twitter

"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made ​​himself known for his analysis of how digitization has changed the way we consume media."
Swedish business magazine, Resumé

 

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