Tuesday, September 25, 2007
What's your point of reference?
Whenever you analyse results from a marketing campaign, you need to frame them in relative terms - that's the great thing about ROI metrics - they are relative - i.e. what did you get out vs. what you put in.
Very often, analysts make simple mistakes in their calculations and miss simple errors. Because they forget to use a term of reference before they report, they send our garbage.
I learnt this lesson early on when my then boss, Jeffrey Merrihue (http://www.lostartofmarketing.com/) suggested some numbers i'd given him were likely to be b****ks. He took out a ruler and showed me just how wrong my pages of spreadsheet calculation must have been. Because i'd been up for 36 hrs straight (it was a bad week in Madrid) and had become lost in the detail, i'd lost my point of reference.
The biggest mistake analysts can make is not seeing the woods for the trees - is the result sensible and understandable? If not, take a step back and reframe the question. If you're not sure, check your steps!
One more thing - don't always trust your calculator. Excel 97 had issues running regression calculations using the analysis toolpack and now it appears Excel 2007 can't do a simple multiplication - try asking it to calculate 850*77.1. The answer shouldn't be 100000 should it?