Joe Librizzi

Marketing Strategy
Business Technology
Data & Analytics

Sleep-Analyzing

Data and sleep deprivation don’t mix.

At 12:30am last Thursday night, I was lying in bed awake. I should have been asleep, I was incredibly tired. My wife had been sick the whole week, which meant I had been the sole caretaker for my daughter, plus I was trying to prepare for her first birthday party on Saturday (shout out to the single parents, I don’t know how you do it). I was exhausted.

Suddenly something popped into my head. I saw a bell curve. On the x-axis was product inquiry conversion rate and on the y-axis was ROI. I was convinced that there had to be a point where the return begins to diminish. If true, this would be a strategy buster. Figure out what the optimum conversion rate is, measure different lead generation tactics to acquire the correct amount and quality of leads, make oodles of money.

I grabbed my laptop and fired up Excel. Within minutes I had my tables set up, taking into consideration accurate average yields, total cost of sale, total cost of lost sale and every other metric. I was going to Wow my clients in the morning.

But when I graphed it, there was no bell curve. There was a straight line, increasing consistently with the conversion rate. I spent about 30 more minutes stressing over the data, trying to figure out what I has incorrect. Finally I decided to save it until I had a clearer head in the morning.

On the train the next morning, I opened my laptop and instantly saw what I did wrong – everything! I had somehow convinced myself that making more sales without changing other variables would lose money. I was sleep-analyzing!

I guess there is the potential for diminishing returns on conversion. For example if your lead gen cost skyrockets in order to produce fewer, higher quality leads you could make less profit. But that’s not what I was so convinced of during the night. The lesson here is clear: exhaustion and data crunching don’t mix.

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