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They're out there... the single worst enemy of any successful or would-be-successful business.

I'm talking about the highest-paid person's opinion (HiPPOs). HiPPOs have created a lot of trouble recently. Experiences indicate that—from Wall Street to Main Street and at all points in between—being paid a lot of money doesn't necessarily correlate with having the right answer.

Of course, nobody would ever acknowledge that their organization only relies on the boss's opinion to make decisions, but in many cases, that's exactly what is happening. Ask yourself the question, "Do we tend to sit around a table arguing before reaching an 'agreement'?" If the answer is "yes," chances are that one way or another you are a victim of the HiPPO.

Collaborating is key in business success, and it's bad for business when everyone relies on one opinion, neglecting facts and data.

The Real-World Problem

Consider a mobile business wondering when to ask a user to opt-in for push notifications. That might seem like a small decision, but it has major implications. The greater number of users who opt-in exponentially increases marketing effectively down the line. When is the right time to ask the user to agree to an opt-in?

One school of thought would recommend moments after install because that's when you have the largest amount of users available. On the other hand, asking the question at that point is a little like walking up to people on the street and asking for their number. They don't know you, and you haven't given them the opportunity to get to know you, decreasing your chance of success.

Perhaps, then, we should wait. We will have fewer users to ask the question to (user churn is high in mobile apps after all), but by now they know us, trust us, and are more likely to say yes.

That is precisely the kind of decision that can be made in two ways. We could leave it to the HiPPO or argue about it around a table or we could make those two alternatives a reality and see which one, based on real-user data, leads to a greater number of opt-ins.

The Solution

For every business decision made, it can be expected to see results reflected in the performance of the business. (If you don't expect your decisions to have an impact on your bottom line, you might want to ask why you are making them!) Once we understand that, we can begin to evaluate those decisions using actual data rather than simply opinion.

In online and mobile app businesses, a huge amount of decisions made every day can be tested and compared. From how to describe an item, to the number of steps in a tutorial or the difficulty level of a mobile game, it's possible to pinpoint and determine which approach is most effective through actual customer data.

To do so requires creating an A/B test in which certain customers or users are served alternative variants of the digital experience. In an era in which almost every aspect of the user experience is defined by data, that means almost everything is testable.

Take the push notification example... Relying on one person's opinion won't tell much of anything. However, creating an A/B test and gaining data will result in a concrete indication of what approach is effective and when push notifications have the highest response rate.

By testing, we can stop guessing what works, and stop relying on the HiPPO or the loudest opinion. Instead we can know.

Continue reading "Why Customer Data Beats the Highest Paid Person's Opinion Every Time" ... Read the full article

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ABOUT THE AUTHOR

image of Hugh Reynolds

Hugh Reynolds is CEO and co-founder of Swrve.

LinkedIn: Hugh Reynolds 

Twitter: @hughreynolds