Flipping the Script: Approaching Data Analytics Differently

I was recently invited to speak, along with two peers, to a group of 200 legal marketers about data analytics. Collectively, we shared our insights and stories about how to best leverage data to advance marketing and BD efforts. My section of the presentation was focused on connecting data to strategy and my primary point was that the strategy needs to lead to the data, and not the other way around.?

I gave an example of how a specific practice wanted to use webinars to generate new business. Using this example, I showed how the number of attendees was rather irrelevant and that marketers should focus instead on the number of prospects who attend, the number of sales meetings held after the webinar, and the number of prospects who are converted into clients. Three simple metrics that help us identify if we are successfully reaching our marketing goals. And yet, the very first question posed during the Q&A was about solo marketers and what one metric they should measure above all else.?

That is when I realized I needed to write this article.?

Firms are collecting vast amounts of data, eagerly diving into it with the hope that it will reveal hidden insights and untapped opportunities. However, many are approaching data analytics backwards. They start by looking at the data and asking, "What does this tell us?" rather than beginning with the critical questions and seeking data to provide the answers. This rear-facing approach can lead to missed opportunities and misguided strategies.

The Common Pitfall: Data-First Approach

Imagine you have a treasure map, but instead of following the directions, you wander around hoping to stumble upon the treasure. That's essentially what happens when firms dive into data without a clear objective. They might find interesting patterns or anomalies, but without context, these insights often lack actionable value.

This is why many firms report on so-called "vanity metrics," quick and easy-to-understand data that does not truly give us insight. One of my fellow panelists shared a story along these lines. He was excited to share an increase in readership with one of the firms that he works with; the firm’s savvy marketing leader quickly quipped that she doesn’t care about the overall number of readers, but rather, getting in front of the right readers, even if it’s only a few of them.?

In a data-first approach, firms sift through mountains of information, hoping something will stand out. This method can lead to several pitfalls:

1. Information overload: Without a clear focus, firms can get overwhelmed by the sheer volume of data, making it difficult to discern what's truly important.
2. Misguided insights: Data without context can be misleading. Firms might identify correlations that aren't relevant or actionable, leading to wasted resources.
3. Reactive strategies: A data-first approach often results in reactive rather than proactive strategies, as firms respond to what they find rather than strategically seeking answers to specific questions.
4. Distracting data: Shiny “vanity metrics” can mislead marketers and firm leaders about what is truly important and impactful.?

A Better Approach: Strategy-Driven Data Analytics

To truly harness the power of data analytics, firms need to flip the script. Start with the questions that matter most to your business, and then seek out the data that can provide the answers. When I say questions that matter most to your business, I am talking about big-picture strategy and goals: Are you trying to grow your revenue by 15% or are you trying to enter a new market? Are you trying to improve your customer retention? What does success look like for this strategic initiative?

Once you know and can clearly articulate your goals, you can look for key performance indicators (KPIs) or metrics that help answer the question of what success looks like. This question-driven approach ensures that your data analysis is focused, relevant, and actionable. It can help you understand if your tactics are moving the needle and creating the impact you’re hoping to achieve, or not.?

Step-by-Step Guide to Strategy-Driven Data Analytics

1. Articulate Your Goals: Write down your firm or practice goals in concrete, SMART (i.e. specific, measurable, achievable, relevant, and time-bound) terms.?
2. Identify Key Questions: Begin by identifying the key questions that will drive your marketing strategy. For example, "Which services provide the greatest opportunity for increased revenue?" or "What are the common traits of our most loyal clients?"
3. Define Objectives: Clearly define your objectives for each question. What do you hope to achieve by answering it? This could include improving client retention, increasing new business for a specific group, or enhancing marketing ROI.
4. Gather Relevant Data: Once you have your questions and objectives, gather the data that will help you find the answers. This might include client demographics, service usage patterns, or marketing campaign performance metrics.
5. Analyze with Purpose: Analyze the data with your specific questions in mind. Look for patterns, trends, and insights that directly relate to your goals and objectives.
6. Implement and Iterate: Use the insights gained from your analysis to implement data-driven strategies. Continuously monitor results and refine your approach based on what works and what doesn't.

Benefits of a Question-Driven Approach

Adopting a question-driven approach to data analytics offers several benefits:

• Focused Insights: By starting with your strategic goals and specific questions, you ensure that your analysis is targeted and relevant, leading to more actionable insights.
• Proactive Strategies: This approach allows you to be proactive, addressing key business challenges and opportunities head-on rather than reacting to data that may or may not be available.
• Efficient Resource Use: Focusing your analysis on specific questions helps you use your resources more efficiently, avoiding the trap of chasing irrelevant data points.
• Ensuring Impact: Instead of just engaging in marketing activities for the sake of marketing, this approach ensures that your marketing efforts are truly making an impact and driving the business forward.?

In conclusion, mastering data analytics can be a game-changer for law and accounting firms. To unlock the full potential of data analytics, we must reframe our thinking and flip the traditional approach. Start with the goals that matter most to your business and let related questions about those goals guide your data analysis. By doing so, you'll gain deeper insights, develop more effective strategies, and ultimately, drive better results for your firm.

In a world awash with data, the power lies not in the information itself, but in the questions we ask and the answers we seek.