I’m pleased that today’s guest post is from Chuck Ullan.  Chuck’s a fellow direct response marketing disciple and analytics ninja who provided me with much wise counsel when we worked together at AOL. He now runs his own analytics firm, lives in Hawaii and, with his wife Kirsten, writes about their life on the Big Island at Enter Sandland.

When you go to the doctor’s office, what do they measure each time?  Heart rate and blood pressure.  Why?

HR and BP are great for monitoring trends in health and whether there is a critical issue to address.  But if there’s a change or a problem, they don’t tell you why.

Why not run a battery of tests every time you go into the office?  Because it would be wasteful, time consuming, and most of them would be irrelevant.

When doctors identify that something is wrong, they order diagnostic tests to help identify the cause.

Same goes for corporate dashboards.

Dashboards are the business health monitor.  Metrics often include top-level revenue and expense items, plus forward-looking drivers such as leads.

Dashboards bloat because of the belief that if there’s enough detail, you can identify why things changed.  No one wants to sit in front of the CEO and say they don’t know why there’s a dip in the numbers.

There are an infinite number of reasons why performance can change.  The answer is almost always buried in the details, not in the next level down from the top.

The more metrics you use to explore the why, the more points of variance. You create 20 new fires for each one issue you nip in the bud.

When you spot a problem, go investigate.  Don’t try to anticipate.

Dashboards work for alerts, not analysis.  Less time to create, less wasted time chasing ghosts.

Stop hoping to answer why.  Doctor’s orders. . .

About the Author: Chuck Ullan is President of Top Shelf Analytics, which improves the profits and visibility of direct response marketers by measuring and modeling campaign and customer behavior.