Avinash Kaushik 10/90 Rule

Most of studies have proved that a lot of companies are doing great job in using web analytics in order to do investments , but they still have problems on how they can make the right business decisions and recommendations. Most of the employees are complaining about the tera bytes of data and giga bytes of data that comes from the reports for Excel and power points files that have no actionable insights . Avinash Kaushik had found the solution for this issue , he created the “10/90” rule. This rule suggests that for every $10 you spend on your analytics tool and implementation, you should spend $90 on intelligent digital analysts that can convert your data into actionable insights. Avinash Kaushik mention an example in order to clarify his

rule , he said that “If you are paying to your web analytics vendor such as : Omniture, WebTrends, ClickTracks, Coremetrics, or HBX (now owned by WebSideStory) $25,000 for an annual contract, you need to invest $225,000 in people to extract value from that data. If you are paying your vendor $225,000 each year, well, you can do the math”.
It is easy to collect data, but that data will worth nothing until you transform it into insights that drive your business goals. Avinash Kaushik said that the goal for this rules is to reach the highest value from web analytics implementation and to reach customer satisfaction, testing, usability, voice of customer .

In addition , this rule will offer a clear way to understand what customer experience on your site, so by that you can influence their behavior .As I mentioned above $ 10 should be spend on cost of analytics tool and vendor professional services , and the $90 is required to be invested in intelligent resources and analysts , also people are the bottom line for magnificent success , so hiring the right people in the right positions is important ,if you hire IT Admin access to your favorite expensive analytics tool that will not help in management actionable decisions.

You need to set up your web analytics program for

success.

Furthermore,the reasons that made Avinash Kaushik to create the 10/90 rule are ,if the website has a lot of pages for example more than 100 pages and you get more than 10k visitors per month , you will face complexity of the interactions that are happening with your website.

Drop in marketing campaigns, a dynamic site, SEM, more pages, more traffic, promotions and offers and you have a very tough situation to understand.Furthermore,not every data is useful some companies are collecting large amount of data and then after they analyze it , they figure out that they don't need this type of data ,so the bottom line is that it will take a lot of intelligence to figure out what is real in all this data and what is fake and what, if anything in the canned reports, is meaningful or not .Also ,actionable Web Insights do not come simply from ClickStream ,so companies need to hire the right and smart people and have business acumen who can tie clickstream behavior to other sources of data.MR Kaushik point out that “one fact that remains a bit hidden is that almost all of these “standard metrics” are measured and computed differently by each vendor, You are going to have to sort this out”. A lot of people do not think about these problems before they purchase a web analytics tool or software and they still wait for (ROI) returns on investments it does not make any sense

.

The best thing about the 10/90 rule is that even if you reach to step 3, you can walk away no harm and would have learned valuable things , it means if you don't want to continue in this rule , you will get out from it with something at least and you will gain a great experience of using it.Moreover,most of web analytics vendors are welcoming the 10/90 rule.

Finally , based on a study a lot of big companies are spending around $150,000 per year on the web analytics tool, but with 10/90 rule companies should be spending $1.35 million on the brains operating this software and if we calculate the costs an average of $100,000 a year for each analyst company hires , but the 10/90 rule states that the company should be able to hire 13.5 analysts in order to measure what comes in their premium web analytics tool.With this budget , smart companies can hire 10 analysts and use the other $350,000 left over to hire specialty agencies to help with technical implementation, project management or analysis.