The Limitations of "Getting Close to Revenue" in Digital Analytics
💡Key learning you will get from reading this article:
Revenue Alignment Isn't Everything: While important, focusing solely on revenue can overlook other critical factors stakeholders value.
Stakeholder Engagement Is Crucial: Regular communication and understanding stakeholder priorities enhance alignment and recognition.
Multidimensional Value Matters: Demonstrating value across various dimensions strengthens the case for the analytics team's contributions.
A common piece of advice we often hear is that to be successful in our role as data professional, we have to "get close to revenue."
This mantra suggests that analytics teams should align their efforts directly with financial outcomes to demonstrate value and secure their position within an organization. While this approach has merit, it isn't a foolproof strategy. This article explores the limitations of focusing too heavily on revenue through an anonymized case study of a global technology company. It also gets into why aligning with stakeholders' values is equally crucial for data professionals.
Emphasizing revenue alignment in analytics initiatives makes intuitive sense. By showcasing how data efforts contribute to the bottom line, teams aim to justify investments and highlight their impact. Many organizations prioritize financial metrics, making this a seemingly effective strategy for demonstrating value.
Case Study: When Revenue Alignment Falls Short
Consider the experience of a digital analytics agency, let’s call the agency 33 Sticks, working with a large multinational company we'll call "GlobalTech." Specializing in advanced technological solutions, GlobalTech operates an extensive online store serving customers worldwide. The agency was ask to analyze user behavior to optimize the online purchasing experience.
Uncovering a Critical Error
During an ongoing analysis of the online buyer journey, the agency noticed a steep drop in completed purchases. Investigating further, they discovered a critical error affecting over 80% of customers attempting to add products to their shopping carts. This fatal flaw not only hindered sales but also destroyed the user experience. The agency documented the issue in detail, provided clear replication steps, and promptly alerted GlobalTech.
Quantifying the Financial Impact
The potential revenue loss from this error was staggering, estimated at up to two million dollars. By identifying and communicating the problem swiftly, the agency enabled GlobalTech to address the issue promptly, preventing any further financial losses.
An Unexpected Turn of Events
Despite the significant value delivered, GlobalTech chose not to renew the contract with the agency. This outcome was perplexing, especially given the direct impact on revenue preservation. It highlights a critical insight, that while to the company, saving millions of dollars was important, the focus on uncovering such a critical issue with the company’s online checkout wasn’t seen as a “win” for the stakeholders, their priorities were to be found elsewhere. So while saving the company a lot of money was viewed as a win by the agency, aligning with revenue alone didn’t guarantee recognition or continuation of the business relationship as the agency failed to align on what was most valuable to the stakeholder, who was responsible for paying the agency their fee.
Understanding the Misalignment
The core issue lies in a misalignment between what the agency valued (helping the company make more money) and what GlobalTech stakeholders prioritized (something else that the agency failed to understand). While the agency emphasized the financial savings, GlobalTech stakeholders had different criteria for evaluating the value of the partnership. It could have been factors such as strategic alignment with team performance goals, innovation potential, cultural fit, helping the stakeholder get a promotion, or something else entirely.
What Did We Learn?
Alignment with stakeholder priorities is much more important that getting close to revenue.
In fact focusing so heavily on revenue can cause data professionals to overlook other critical aspects valued by stakeholders. Trust, communication, personal goals, career goals, team goals, and strategic relevance often hold equal or greater importance. Data teams should strive to become strategic partners rather than just service providers.
To ensure this alignment, regular check-ins and open dialogues with stakeholders are essential. They help ensure that the work aligns with the evolving goals and values of the organization. This continuous engagement allows for adjustments and demonstrates a commitment to shared objectives.
While connecting analytics efforts to revenue could be beneficial, it should be part of a more holistic strategy. Data professionals need to balance financial metrics with other dimensions of value.
Understand Stakeholder Values:
Invest time in learning what stakeholders prioritize. This could range from innovation and efficiency to customer satisfaction and reputation.Align with Business Strategy:
Ensure that analytics initiatives support the broader organizational goals. This alignment enhances relevance and impact.Communicate Effectively:
Maintain open lines of communication to keep stakeholders informed and engaged. Transparency builds trust and facilitates collaboration.Demonstrate Multidimensional Value:
Highlight how analytics contribute beyond just revenue, such as improving user experience, informing strategic decisions, or enhancing operational efficiency.
Our experience with GlobalTech serves as a cautionary tale for data professionals. Getting close to revenue is valuable but not sufficient on its own. True success in digital analytics comes from aligning with stakeholders' values, understanding their priorities, and engaging as strategic partners. By adopting a more holistic approach, analytics teams can enhance their impact and ensure their contributions are recognized and valued.
