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Voodoo Analytics: Understanding the Signs of Primitive Solutions

02.02.2016 by Ken Claflin


Finding an analytics solution is daunting enough without the added anxiety of choosing one that might prove to be insufficient after the fact. With the need to create efficiencies that will improve your gross margins and increase your bottom line, it’s important for modern retail and food service providers to choose a solution that will allow you to have a comprehensive understanding of associate and product behavior.

However, not all analytics companies are created equally. Yes, some will suit your business needs better than others. But some will claim to bring value to your business—without actually being able to derive an ROI from your data. Beware the traits of “Voodoo Analytics”.

Voodoo Analytics refers to analytics that promise insightful information but don’t give any kind of prescriptive actionable recommendations to improve results. Many analytics companies today offer solutions for closed-loop reporting, which bridges the gap or “closes the loop” between your marketing efforts and revenue. This allows you to monitor the progress and see the effectiveness of your efforts on prospect or customer conversion. But what that really means is you’re receiving static reports rather than the the iterative, actionable solution your business needs. 

The problem with Voodoo Analytics is that the solutions provide nuanced information that appears valuable, but lack the ability to quantify any kind of return. You see the information and perhaps understand the problem, but you don’t know which steps to take next. How do you prioritize opportunities (actions items that will improve store level operations) when you don’t have any idea what kind of return you’ll get from doing so?

You need a solution that goes beyond the primitive one offered by Voodoo Analytics.

That’s where prescriptive analytics comes in. In the scheme of big data analytics, prescriptive is the final phase of analytics (following descriptive and predictive), and answers the question: “What happens next?” Prescriptive analytics provide you with actionable recommendations based on industry best practices, so you and your employees know which steps to take to optimize operations. 

When it comes to choosing an analytics solution, you’ll obviously want to choose one that best suits your business needs. But, more importantly, you’ll want to avoid becoming one of the many unfortunate victims of Voodoo Analytics. And to do that, you have to recognize the attributes of primitive analytics solutions:

No Opportunity Prioritization
It’s difficult to take action without a solid understanding of what opportunities should be addressed first. You’ll want to find a solution in which actionable recommendations are prioritized and distributed based on gross margin dollar value. It’s also important that your solution has the ability to communicate those action items (whether it’s via email, text, or in-app notifications) to the right associate and monitor the progress.

No Calculated ROI
How much is each opportunity really worth? In order to understand the financial impact on your company, it’s important that each opportunity provides a calculated ROI. Find a solution that allows you to identify specific associate or location performance gaps, so you can determine which KPIs you want to track to discover anomalies in their performances. Because every anomaly lends an opportunity to increase sales or gross margin dollars, it’s essential that each one has a calculated remediation dollar value.

No Opportunity for Growth
Will the solution you’re considering allow your company to evolve? If you’re not adapting to meet your market’s ever-changing needs, you’re falling behind. It’s important to consider how even the smallest changes your company makes might affect your clients and your margins. With solutions like Spark Analytics, you can build tests that will allow you to predict how customers might react to certain changes and how those changes will affect your bottom line.

You’re now equipped with the knowledge to steer clear of solutions displaying the qualities of Voodoo Analytics. Use this information wisely in your search for an analytics solution and pass your knowledge onto others. Help us prevent any more unfortunate individuals falling victim to Voodoo Analytics.


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