Alleged facts can obfuscate view on reality

In a speach at a symposium during the Salzburg Music Festival 2019 the economist and head of the Austrian Institute of Economic Research had a say. Professor Christoph Badelt referred to the myth that everything was connected. As the boss of the institute he is constantly exposed to numbers but especially to index figures. As an example, Badelt picked the »growth rate of the gross domestic product (GDP)«. For Badelt, this index has limited informative value.

This »economic growth« has become a virtual indicator for the development of our wealth. Badelt surprisingly notices that there has developed a downright number fetishism around the GDP growth rate.

In fact, the growth rate is more a thing of statistics. It cannot be subjectively experienced. In common life the economic growth implies the assumption that our wealth grows the more we consume. This assumption is wrong. First we have to determine what factors are being considered when calculating the GDP growth rate, i.e. what counts and what doesn’t. When looking at the numerous factors more closely it becomes obvious that there is no direct context with our »direct wealth«. Although we accept the GDP growth rate as the indicator for our wealth we do not question it and do not subjectively experience it. We actually misjudge it.

Number fetishism of marketing managers

We can observe an analogy in the perception of the GDP growth rates with index figures in marketing. Managers posses a great wealth of information but assess it imprecisely or plain wrong.

Web server analytics are often used as underlying factors for decision making. Hardly anyone questions the actualy meaning of these figures. So-called online marketing experts are being called in who combine their sparse knowledge with lack of customer industry expertise. Nevertheless, we pay homage to these figures and place them fetish-like forefront.

Combining quantitative statements with qualitative metrics

Like with the GDP growth rate we are tempted to make assumptions based on – let’s say – Google Analytics data, but without scrutinising their relevance.

Those figures state, for example, that a number of visitors come from this or that country. Automatically we tend to believe that this particular would be a very important market for my company. After all, a lot of traffic comes from that country. This accumulation could have other reasons. It might be my home market and most of the many visitors are job seekers. My company may be sponsor of a soccer team. From the mentioning of the team in the media my company gets a lot attention. Consequently, these visitors are not necessarily my potential customers.

Everything is relative

These figures can be especially deceptive when we put them in relations. This is happening frequently and delusively. Car makers like to use this trick to place new models in their best light. Registration figures are emphasized explicitly. But looking closely, it is logical that these numbers rise when the old model gets replaced by a new one. A large number of vehicles is registered in a short time and pre-orders are being fulfilled. After the backlogs have been processed, the curves normalize again. It is just a snapshot. But a good-looking one. Another example is applying this technique on bad-selling niche products. Instead of absolute numbers, producers tend to publish relative growth rates. 200 per cent growth are impressive. But 200 percent of a little is still not much, right?

Inbound-Lead-Marketing for greater clarity

So, Google Analytics numbers have limited informative value. Only when combining them with an additional qualitative component they makes sense for precise statements. 

Eko Data Intelligence reveals the names of your website visitors. The perspective on your data is broadly widened with information not available to you up to now. Who from what industry visited what pages for how long? Who are returning visitors? Are our existing customers revisiting my website? Should I attend to them again to recall their memory about our company?

When linking numbers to names – and with it comes a lot of information – the original statement goes through an significant upgrading.

Visit www.ekoconsult.at and learn, how Eko Data Intelligence can save you up to 61 % in cost by using inboung-lead-marketing. Make more of the data you already own!