Nothing is more important than knowledge in professional life.
Contextual knowledge, knowledge of usable networks, sources and future
developments. Nothing should be more important in a company (apart of
course from the people who work with the data) than data. Only reliable
data sources can provide managers with information on historical
successes and current and future target achievements. Only data provides
a usable, combinable and valid source of assessable decisions.
Web Analytics is an integral part of this vital data flow for
entrepreneurs, managers and experts. Web Analytics may act as primary
and/or complementary source of knowledge and is therefore indispensable,
especially in the future.
Analytical Benefit
How much benefit can be derived from web analysis that provides
optimization options based on metrics and analytics reporting? The
general answer is certainly “a lot!”, although subjectivity will always
augment final decision making.
However, in this process of analysis remember to apply the law of
Gossen. We all know Gossen’s law of diminishing marginal utility – even
in terms of web analytics and conversion optimization Gossen’s Law comes
into play.
A redesign of email format might lead to increased newsletter
registrations. Avoiding getting lost in the minutest detail, probably
also helps the conversion. Even a minimal chance of synergy between two
campaigns may have a positive effect on sales.
But at what price?
At what cost?
Gossen´s law
There is the law of diminishing marginal utility of the economy (or
First Gossen’s law), which is based on the assumption that the magnitude
of a given pleasure decreases continuously as we continue to satisfy it
until, at last, saturation occurs. Applying this in a digital context,
it can be represented, albeit simply, here in this chart:
The more investment a web analyst makes in a project or a general
optimization, the smaller the benefit over time. A quick optimization
change is often the beginning of a project; leading to more continuous
improvement or conversion increases which are only achievable with
significantly higher costs. This law of diminishing marginal utility is
universal enough to be frequently observed in practice with users!
In order to make the available (though often necessary) small steps,
requires a maximum effort of the staff. But – and here is the crux of
this model – in most cases it is necessary to accurately perform these
minor improvements, or to gain a competitive edge through detailed work,
in order to become a successful online store rather than a less
successful one. Human effort is required to succeed in taking a
confusing, not goal-orientated, search and redesigning it to create a
perfectly designed internal search tool – so that you might achieve that
essential digital competitive advantage.
The real challenge is that we have long since arrived, in many areas
of the knowledge economy, at the point of the minimum marginal utility,
so that the difference is small, but crucial. Relevant optimization and
targeted increased conversion that can identify a market difference –
can only be achieved with great effort. This effort must always be set
against the potential benefits. Economic models that are applicable
across a range of sectors and which have stood the test of time are
becoming increasingly popular. Be it the phenomenon of over-optimization
or the Six Sigma DMAIC cycle (Define, Measure, Act, Invest, Control).
Nowadays a lot of companies still struggle with the benefits of using Web Analytics
software. This will change and more and more departments will see the
value of data-driven decisions. So, do not only feed your software with
data – feed your brain with knowledge and experience. As soon as you
come to a border and remind yourself on Gossen´s law; you need to decide
if it is worth investing the additional efforts to get close to
perfection or if you should concentrate on parallel projects within
Digital Business.
Please Visit : IMarks Digital Solutions India Pvt Ltd.
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