25 Nov 08 Medicine, vitamin or food?

As executives to look for places to save money, measuring web site outcomes becomes more important – at least to the people who do the measuring! Helping management resist the urge to cut analytics calls for knowing exactly why we do it. There is an old idea that products and services are either medicines that cure a illnesses or vitamins that maintain or increase health and strength. I’ll add a third category, food, without which none of us survive long.

If analytics is just food, expect your budget to be cut to the bone. Food, in my thinking, means that your company does analytics only because your competitors do. The problem with justifying your existence this way is that you’re a cost center. Costs are things that companies minimize, not places to invest. If analytics is funded and managed entirely out of your IT/Operations budget, face it, you’re food. You may have been gourmet food when times were good, but in this economy, if it isn’t rice and beans yet, it will be as soon as somebody takes a good look at spending.

Your job is more secure if you can show that analytics is a medicine and even more so if you’re a vitamin. If you are a medicine, your budget still might come out of IT, but you have the numbers to prove that without analytics, there will be trouble. If trouble would be in the form of reduced income, you can be reasonably sure that nobody will come at your budget with an axe. Well, not a big axe, anyway.

Aspire to be a vitamin. Numbers that show that investment in analytics increases revenue means job security in good times and bad. Even if your business is unable or unwilling to increase that investment, you’ll cause the people who hold the purse-strings to look elsewhere to do their cutting.

Tags: budget, web analytics