We don't all need to take advanced quantitative statistics, but it's time to start embracing statistics as marketers. Here's why—and how.
Before I go any further and become the most hated writer on the planet, let me say, I’m sorry.
I know most of you would rather eat kale every day than learn statistics. I get it, but give me a chance to explain.
I’ve been intrigued by big data every since the last election when Nate Silver, author of "The Signal and the Noise: Why So Many Predictions Fail-but Some Don't" and founder of FiveThirtyEight, accurately predicted the outcome of all 50 states presidential election.
As someone who was tired of inaccurate predictions, from political pundits to meteorologists, I was ready to listen to someone who knew how to read data accurately.
I was already following Silver’s predictions, so I wasn’t surprised that President Obama won on election night. However, many Republicans were shocked that their candidate didn’t win when some polls had him winning by a wide margin. However, as John Dickerson puts it: “He [Romney] was the numbers guy. But in the end, his numbers were all wrong.”
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This discrepancy between how two different people can look at the same data and come to very different conclusions has huge implications in the political world. It also has incredible significance in the business world.
Marketers have to be numbers guys, too. Because when we bet, we sometimes bet it all. And we have a lot to lose.
So while I’m not suggesting we all need to take advanced quantitative statistics, I am going to advocate that we start embracing statistics as an integral part of our jobs in the 21st century.
1. Big Data is Already Everywhere
One of the best examples of how pervasive big data is in our lives is the story of how Target found out a teenage girl was pregnant before her father did. It’s a story told by Charles Duhigg in his book "The Power of Habit: Why We Do What We Do in Life and Business". Target wanted to snag pregnant customers early in their pregnancy and kept them loyal into their child's early years because it’s an extremely profitable market. And they accomplished this using big data.
The girl’s father was outraged, and who could blame him. Plus, it’s kind of creepy to know that a business can tell your secrets just by your shopping habits.
So while the majority of marketers aren’t at the level of Targets analysts, the lesson is clear: big business is already using data all the time to discover their customer’s habits. Marketers should, at least, understand the capabilities of big data and how to apply them in any marketing effort.
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2. New Access to Data
The area of big data has always been analysts, statisticians, and IT departments. Marketers were given reports and made decisions based on the information prepared by others. There’s nothing wrong with this practice, but times are changing. We are now entering the era of smart data discovery.
According to the business intelligence firm, Panorama, “by 2017, most business users and analysts in organizations will have access to self-service tools to prepare data for analysis.” This means there are new tools emerging that will help the everyday marketer prepare, curate, and analyze data. While these tools allow you to act like a statistician without actually becoming one, you still need to understand the limits and applications of what you can accomplish.
3. Intangible Marketing is Growing
Social media is incredibly difficult to quantify. Mike Volpe calls tracking the numbers of new followers or the vague increased brand awareness “fluffy marketing”. And he’s not wrong.
Only 15 percent of marketers can prove their social media marketing activities have an actual quantitative impact on their bottom line. We all know there are problems with the ROI on social media platforms, but we still believe in using social media. The only answer is to figure out how to quantify social media ROI so we don’t throw away good money on possibilities.
It’s time to stop running away from this problem and figure out how to connect social media and ROI. Accurately understanding the data is the only way we can do that.
Sorry, It’s Time to Learn About Numbers
Your first response may be something like, “if I wanted to be a numbers guy, I would have gone into accounting.” I completely understand and I’m not in love with learning statistics either. Marketing geniuses are incredibly creative and inventive, two things statisticians are not known for.
However, as they say, times are changing. We are entering an era of smart data where everyone in an organization will be able to harness the power of business intelligence. So while I don’t believe we have to go back to school and become actual statisticians, I do believe we need to become proficient in numbers. Otherwise, you may miss out on the rich, complex data that is right in front of us. Sorry.