Disproving the Theory of Analysis Paralysis
November 12, 2012
If you’ve been in the marketing and sales industry long, you have probably heard of “the paradox of choice,” an observational theory that suggests the more options consumers have, the less likely they are to pick any of them. This is why many marketers choose to use calls to action such as “call us today” on their marketing collateral, even though they can be reached through a variety of means. The idea is to tell prospects what to do, rather than giving them a variety of options that could further complicate matters.
A similar concept exists within marketing departments as well. This theory, called “analysis paralysis,” suggests the more information and data businesses have access to, the less productive they become. Believers of this theory argue that data-minded companies spend so much time analyzing and collecting this information that the sheer volume of it makes it nearly impossible to glean any useful insight out of it.
Analysis Paralysis as a Thing of the Past
The fact of the matter is that analysis paralysis is no longer accurate, particularly given all the different tools you can use to collect and sort information from modern marketing campaigns. Several companies can attest to this, with businesses such as the German mail order company Rhenania reporting a 55 percent increase in its customer base after utilizing marketing analytics to fine tune its direct campaigns.
As noted by Frank Germann, an assistant professor of marketing at the University of Notre Dame, the common theme among companies utilizing marketing analytics is the ability to develop new ways of offering products and services more effectively by aligning them with customer desires.
In extremely competitive environments, the theory of analysis paralysis makes even less sense. If companies are feeling pressured to respond quickly to the moves of their competitors, the lack of data would actually further impede their ability to swiftly take action and refine their campaigns to better appeal to their prospective audiences.
“Our results suggest that most firms can expect favorable performance outcomes from deploying marketing analytics,” Germann explains. “Moreover, these favorable performance outcomes should be even greater in industries in which competition is high and in which customers change their needs and wants frequently.”
Using Technology to Sort Data
Information and analytics are extremely helpful in the creation of marketing campaigns and the fine-tuning of existing ones. At the same time, it can be difficult to separate relevant statistics from white noise.
If you’re looking to leverage analytics at your company, you need to consider using tools that can collect information from a variety of sources and present them in a relevant way. This will ensure that your business is able to capitalize on this information and avoid analysis paralysis. Nowadays, computer software and digital platforms enable you to measure campaign effectiveness in real-time, quickly generate customizable reports for different initiatives and share statistics instantly.
Although the prospect of integrating marketing analytics may seem daunting at first, it’s important to realize that few measures can provide results as meaningful as the implementation of these tools. This is particularly the case if your competitors don’t use analytics themselves, giving you an even greater advantage over them.
Data is invaluable to effective marketing campaigns, but only if you can use it correctly. Don’t allow your company to fall victim of analysis paralysis by integrating an easy-to-use analytics platform. The right marketing analytics solutions enables you to truly maximize the efficiency of your initiatives.