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Leading Digital Strategy: Mitigate the Risk of a Wrong Outcome

23rd February 2015 | Christopher Bones, James Hammersley

Leading Digital Strategy authors Chris Bones and James Hammersley take a frank look at how today’s world of e-commerce, where unfamiliarity is rife and non-technical expertise is in short supply, but checking that there is real clarity on three things can reduce the risk of wasted time and mounting workloads.

Leading Digital Strategy: Mitigate the Risk of a Wrong Outcome

E-commerce is one of those areas of business where unfamiliarity is rife and where non-technical expertise is in short supply. This combination offers considerable risk to both e-commerce team leaders and those responsible for the overall commercial performance of the channel. There is no failsafe way around it, but spending just a little more time upfront checking that there is real clarity on three things can reduce the risk:

Being clear on what you want done or what someone wants you to do.

Let’s take a simple example: we all know what a report is, do we not? Well, from our experience, the answer is we don’t. Being clear upfront, especially in a digital environment, can make a significant difference to what comes out from analyses and requests for answers to questions around customer behaviour. Not only are terms confusing- sessions (visits), users (unique visitors), impressions, clicks etc are all very different starting points- but also digital numbers and likely to be directional rather than precise. Google Analytics standard tools work on a sampling basis; most testing software also operates on a sampling basis and makes assumptions about statistical probability: both of these will drive imprecision. We ask the question of our clients, ourselves and our team: ‘What exactly do you mean by (the request)?’ That way we ensure that we are both talking about the same thing.

 Being clear on how you want it done or how someone wants you to do it.

Again experiences tells us that there is a plethora of ways of going about a task- the problem is choosing the way that is most likely to generate a successful outcome. Mapping out how you want someone to go about solving a problem or establishing a data set will ensure both of you understand the assumptions and the process through which answers will be generated. This will help you understand the degree of probably variation for any figures presented and if and where proxy measures are to be used. We ask the question of ourselves, our clients and our team: ‘How do you/we do the requested action)?’ That way we ensure that we both understand how a task will be approached and agree that this is the best way to approach it.

Being clear on the point of measurement.

For all we think digital is a data-based discipline, it has surprised us considerably how little consistency there is across e-commerce teams and even within them about the point of measurement and the evaluation of the significance of any movement. Measurement in itself tells you nothing; it is the direction, the point of comparison and the value of the difference to your business that is critical. Our general rule of thumb is that unless you can put a financial value on it, it doesn’t tell you a great deal. Bounce rates and exit rates are great examples. A high bounce rate from a page where people are finding a telephone number and calling it can be a good thing. A moderate-sounding exit rate at point of payment may be a bad thing. Knowing why people are leaving cannot be separated from this type of data. A 50 per cent increase in the rate of conversion might be impressive, although if it’s taking you from 0.5 per cent to 1.0 per cent and you are a mainstream retail site it sounds far less impressive when, at least at the time of writing, we understand the average UK high street retailer’s e-commerce conversion rate is 4.7 per cent.

Leading Digital Strategy is out on March 3rd 2015. You can pre-order a copy at 25% off by using the code LDSTRA25 at checkout on this website. The discount code is valid until 31st April 2015.

Business, Finance, Risk, Information Management

The Kogan Page range of management and leadership books combines leading authors, practicality, detailed case studies and best-practice methodology. Our books are used by managers and leaders worldwide to make informed decisions based on the latest business thinking. Follow us on Twitter @KPMgmtLeaders.

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