A web analyst’s guide to the two emotions that fuel business

When you look into it, you’ll find that, almost universally, there are two emotions that fuel business: fear and greed.

In the stock market, these emotions influence buying behavior. Everyone knows that to be successful, you have to buy low and sell high, but when you do the forensics on actual market purchase behavior, you’ll actually find that the opposite is true: people buy high and sell low. Why? Because when stocks are on the rise, people think they will go to infinity, and when they’re on their descent, people think they are going to zero. In a rising market, greed takes hold. People who have stock hold on to it as it rises, even above logical levels (pets.com, anyone?), waiting for their ultimate payday. People who don’t have the stock buy it when it’s at its peak, jealous that other people are making money while they sit on the sidelines. Greed fuels this ride to the top of the roller coaster.

Then, the stock starts to falter. It has a few days of downward movement, but nobody sells because they want it to get back to where it was. They’ll sell when it gets back to the previous week’s high, they say. Well, that turns out to be a long wait, it continues to plummet, and people sell all the way down to the bottom. When did everyone get out of our lovely, depressed market in the last few years? You guessed it. At the bottom. And they’re going to wait to get back in.

Then, you can look at when a stock is practically worthless compared to where it was. Fear sets in. Nobody wants to buy this stock. So when it’s cheapest, people aren’t buying it because it’s going to zero. And I’m not talking about day trading or penny stocks here. I’m talking about stocks like Merck; people avoided this one like the plague when Vioxx went south on them. At its cheapest, nobody wanted it, even when just one successful drug would bring it back to life.

In our day to day, greed and fear fuel a lot of decisions, too. Fear is what causes people to stick with the old page design after a multivariate test, even though there was a clear, new winner. Greed causes stakeholders with a smaller share of the company’s revenue to get their offers plastered all over the home page, harming other, more important revenue channels.

So how do we, as analysts, handle these two emotions?

Primarily, I’d accuse us of living in fear, right now. We have been crying out for years that we want our seat at the table, but when we get it, we clam up. We don’t barge in there with our mountains of data and convince the CMO or CEO that the whole company needs to be turned on its head, even though that’s what we’ve been saying around the water cooler or over lunch for years.

We call ourselves “digital measurers” out of fear. We know that we really are valuable business assets, but when the rubber meets the road, we are comfortable in our ability to measure. There’s no risk in measurement. But we are pushed out of this comfort zone when we aim to turn that measurement into provable business results. That’s less of a guarantee, so when we’re asked to take the risk of advising shifts in strategy and tactics, we clam up again, often choosing instead to give the data to other stakeholders and let them make the tough decisions. Ridiculously, we sacrifice the potential reward to avoid the potential blame. Because for someone who’s data driven, there is nothing worse than being wrong.

Well, I have news for you. You’re going to be wrong. But there’s more news: the business is used to people being wrong.

This is in no way a criticism. If there were three or four emotions for us to choose from, maybe letting “happiness” rule our decision-making, it would make our lives easier. But unfortunately, there are only two emotions that run decision making, and that makes it hard for us because greed sounds so bad. We don’t want to be lumped in with people that caused rolling blackouts in California or who started the mortgage crisis.

But I want to go out on a limb here and suggest this to web analysts: be greedy, but still be you.

Greed, in fact, can be a good thing. Greed builds risk tolerance. Greed is what gets you your seat at the table. Greed is what compels you to challenge the status quo and make bold recommendations about how to change the web site, or better yet, your process or even the whole business. Greed is what will get you promotion after promotion, and turn you into the person everyone leans on to make hard decisions when they are paralyzed by their own fear.

But the house of cards will all come crashing down if you don’t keep being you. What I mean is that if you are greedy, you must stay analytical. Your greed will put you into a mindset where you are solely focused on finding opportunities, but your analysis will vet those opportunities. You’ll buy opportunities low and sell them high, because you know what constitutes low and high: you have the data. On the other side, your fear causes you to focus on small things fixing what’s broken on the web site. Yes, these fixes have upside, but that is a mindset that takes your performance from negative back to zero. Not from zero to positive.

  • Fear has you measuring. Greed has you creating.
  • Fear has other people talking to the CEO. Greed has you talking to the CEO.
  • Fear has you changing bids. Greed has you building new pages and sections to satisfy an unmet need.
  • Fear has you focusing on the “visit quality” side of conversion rate. Greed has you focusing on the sales.

Give this some thought; leave some comments. How will a greedy outlook today change what you do in your analysis? If, instead of fixing what’s broken, you create something completely new, what new and different information would you be diving into to prove your hunch?

Try greed on for size, but never forget that you have the information to back yourself up. Gain some confidence and swagger. Make bold claims and back them up. Leave fear behind.


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9 Comments

  1. Evan,

    I really like the concept around this post, especially when you take a step back and re-read those last bullet points. All greed is not the Gordon Grecko version!

    -Rudi

    Posted February 25, 2011 at 11:17 am | Permalink
  2. In business, fear and greed are not always deadly sins.
    It’s like the way women often view men. In theory, nice guys are great, but if Nice Guy gives his spot in a queue to someone else or doesn’t stand up for himself when mocked, his lady friend will lose all respect for him. It’s all about perception and delivery.

    Posted February 25, 2011 at 12:09 pm | Permalink
  3. As per usual Evan, I freakin’ love it. We are so guilty of hiding behind data and not putting our neck on the line. We claim we have the data to tell the business what they should do, then we deliver numbers and leave it up to an executive to reach a conclusion and make a decision. We need to stick our necks out, make recommendations and changes and stand by them, with the data to support, EVEN if it blows up. Why don’t we? Because we’re afraid. Well, I just mixed a little extra greed in with my coffee. Now let’s get this day started.

    Posted February 25, 2011 at 1:16 pm | Permalink
  4. Ned Kumar

    Evan,
    I agree with Emer in that fear and greed are not necessarily bad. In the Old West there used to be a saying “A little fear keeps you alive” — because then you were always aware of your context/surroundings and watching out for movements that might be potentially dangerous (Indians, the bad guys and what not). Similarly to your point, greed has always been a great motivator for humankind.

    I think the key is to balance the yin-yang of these emotions in a way that we move forward yet don’t overstep certain boundaries. You lay down some good arguments along these lines.

    And since we are talking about Web Analytics – I would like to add a couple of more emotions into the fray 🙂 — pride and empathy. When you go to a C-level meeting or a boardroom or even talking with other stakeholders, it is difficult to sustain confidence unless you are passionate and proud of what you do. Also, considering where we are on various fronts (including privacy concerns), I think it is critical that we be empathetic and have the patiences to explain certain points even if it is kindergarten stuff to analytics ninjas.

    Best,
    Ned

    Posted February 25, 2011 at 2:15 pm | Permalink
  5. muddslide

    More like….

    Greed has you lying/manipulating.
    Greed has you in a narcissistic fog, unable to identify w/ others pain.
    Etc, etc.

    It was established thousands of yrs ago that greed as behavior caused so much more harm than good that it was elevated to the status of “sin” in the Bible.

    Given the multiple examples of how greed motivates American business leaders (C-suite and business owners) to take treacherous, self-serving actions at the expense of others [think Ken Lay (dead of heart attack), Bernard Madoff (life sentence, son’s suicide) and all the little Kens and Bernies running companies out there we never hear about] it’s odd to read a post from someone who sounds like he seriously wants to take something so obviously unseemly and rehabilitate it as an indication of positive life force?

    #twisted

    Posted March 2, 2011 at 11:50 pm | Permalink
  6. Great question! No, I am clearly not endorsing the type of greed you are talking about. That would definitely be very, very bad.

    Human beings are self centered creatures. What I mean by that is we act in correspondence with how we feel our actions will impact us. Fear and greed are two of the primary motivators of action, one causing us to be self-preservationists (fear) and the other causing us to elevate our condition (greed). These are innate and instinctive things, and they are what allowed our species to exist and flourish.

    But obviously humans have had some real issues with greed, some of which you mention. We need to avoid that. My whole point with the post, which may not have been totally clear, was that as analysts, we are safeguarded against some of the more negative aspects of extreme greed if we stay true to our craft. If we seek to elevate our role and significance, it ultimately benefits others and the business as much or even more than it benefits us. So long as truth, trends, and data are our guides, we should be a little more ambitious and selfish in our daily activity, not entirely abandoning fear for many of the reasons Ned mentioned, but shifting away from it to a place where we leverage the assets we are for our own gain.

    We deserve it. We have great value to offer, and that value deserves reward. It’s how the role will attract talented people who can make a difference, and what will keep us engaged. It’s awfully hard to justify creating value and not being rewarded for it.

    Posted March 3, 2011 at 12:40 am | Permalink
  7. I agree with everything you have said here, we need to step up to the top table and tell the CEO and directors what they should be doing. And greed appears to be a good word to use, particularly to highlight the issues and fit in with your example, however there are some negative connotations around it. Instead, I would like to suggest it is a mixture of confidence and conviction (which equates to the same thing).

    For an example, I am hoping to get a meeting with a medium level retailer via a search marketing agency and have already been warned that the key contact only works at a high level, bored with the detail. If the meeting goes ahead, I am likely to get the question, what would be the impact of working with you and using web analytics?

    As an web analyst, my natural response would be to say “it depends”. After all, changes haven’t yet been made and it is difficult to estimate accurately the uplift that could come from a single change to website/marketing/strategy, let alone multiple changes combined. And you can never really guarentee anything.

    But with confidence & conviction (greed to make a difference to this business), I am instead going to say that I am targeting a 20% increase in revenue if they implement my recommendations. Let’s see if that gets me their attention and a seat at the table.

    Posted March 3, 2011 at 5:42 am | Permalink
  8. Great insight Evan! I think perhaps you could use a parenthetical statement like the one used by Gordon Gecko. For “Greed is good,” is really only true with the entire statement is quoted “Greed (for lack of a better word) is good.”

    A better word is needed. A word that includes the desirse to better yourself ethically, to blaze a better trail ethically, to improve your station ethically, to lead the charge ethically, etc is needed.

    Because greed is too often interpreted as muddslide did, and wrapped with all the dark and evil baggage labelled by the word greed.

    Posted March 3, 2011 at 11:41 am | Permalink
  9. Tim,

    I agree with you. But I asked myself this: would picking a better word change the fact that fear and greed are the prevailing emotions? I hope it would, but I don’t think it would.

    I guess what I’m trying to communicate is two things: first, appreciate these emotions, not just in ourselves, but in others. See how they impact their decisions and shape your company. Once you can appreciate where others are coming from, you can understand how to help those in fear or those who suffer with greed by adding context and the great insight brought about by good analytics.

    Second, it’s about looking within. Fear is a big motivator today. We think we aren’t smart enough, good enough, cool enough, etc. to “hang” with the execs., and that just isn’t true. By being a little “greedy,” instead, we actually do others a great service; as we become more important, the organization benefits greatly. The focus comes off of people, opinions and politics, and refocuses on reality, objective feedback, and data. And by identifying with the same emotions we dislike in others (we typically dislike seeing other people act out of fear or greed), we can better understand and empathize with their struggle, understand that we often commit the same crimes we judge others for, and start putting the pieces together.

    Fear and greed are both very, very bad things. But they are also very, very REAL things we need to learn how to deal with and embrace constructively, because no matter what we call them, they’re still there!

    Thanks for the great comment!

    Posted March 3, 2011 at 12:20 pm | Permalink