008 | The cheat code to find growth in our data

EDITION 008 | More Room to Think (Archives) | Formentor Labs​
​READ TIME: 3 minutes

🗓️ Thoughts this week

A few years ago my team at Intuit was tasked with fixing a slumping conversion rate. It wasn't a massive drop - less than a 1% decrease - but for a multi-million-dollar company the implications become expensive quickly.

Where do you look for a 1% fix?

Today we have access to reams of data. We even call our customer data warehouse a "data lake" probably because we're drowning in it.

1% is really hard to diagnose. The secret, in this case, was drilling down into segments. We broke apart our data by dimensions and suddenly, gloriously, we found our issue. It was screaming at us.

A new iPhone dropped. You know Apple fans. Hundreds of thousands of our users had already bought it on release day and were logging into our e-commerce store to shop.

And 100% of these early-adopters were falling out of our funnel.

Trouble is, the viewport, the usable rectangle on a mobile browser, changed shape with this model. The Safari browser changed size and our visitors couldn't reach the Add to Cart button.

We moved a button forty pixels and welcomed +100% users back into our funnel. Not everyday you get a win like that.

Instead of searching endlessly for a 1% gap we found a clear-as-day urgent fix worth +100% for a single segment.

Today we're going to take a little room to think: how can we be efficient with our data to spot important problems for our business.

Make a little room to think Now is a perfect moment to take a breath. 8 seconds in, pause, 8 seconds out.

🔬 This week's topic

THE PREMISE

An anomaly is a break in a pattern.

Training our eyes to look for anomalies is the best way to spot solvable problems in our funnel.

We can be looking at any report; revenue, traffic, engagement, open rates, adoption or retention. This works everywhere.

An anomaly falls into one of three categories; point, contextual, or collective. (Source: Varun Chandola, Arindam Banerjee, Vipin Kumar)

• Point: spikes & outliers
• Contextual: gaps to expectation
• Collective: breaks from the average

WHY IT'S IMPORTANT TO GROWING OUR IDEAS

It's necessary to provide evidence of a real problem.

Businesses are never short on new ideas ("ie. shiny object syndrome") and yet it's the ideas that solve urgent, expensive and highly-visible problems that get attention.

By diving into the data looking for anomalies; we can uncover real problems; we can develop valid solutions.

The real skill is not spotting anomalies, but separating signal from noise. We need critical thinking to confirm whether the broken pattern we’re seeing is valid, indicative, and accurate.

HOW WE CAN USE IT THIS WEEK

Check the graphic I made for us this week. It's a shortlist of the most useful techniques to slice our data and expose breaks in patterns.

Start looking for areas of the funnel that fail to meet expectations:

• Some gaps fail to meet a plan. That's worth investigating. Leaders pay very close attention to those ideas that recover missed revenue or save churning customers.
• Some gaps fail to meet a previous window. There should be an explanation. Historical performance isn't even the baseline in high-growth companies, it's a miss.
• Some gaps fail to stay within range. A sudden surge or drop in performance is, in my experience, often evidence of a technical issue that has a straightforward fix. Let's be the person to find it.

There are no beautiful solutions without painful problems. We want to find those problems so we can do the best work of our lives.

Next week's issue is part of the same series. Instead of looking at data to find problems, we're going to look at buyer behaviours. Yeah. Getting personal.

Thanks for reading. See you next week.

Rhys

Pssssst, hey

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