Tuesday, 14 May 2013

What's an analyst selling?

When we offer analysis in any field, what are we selling? I mean what do we really offer, right down at the core of it?

There isn't always an easy answer. A great story that makes this point is the one about the advertising consultant who was speaking to Parker pens and asked them what business they were in. What do Parker pens sell?

Pens, they said.

The consultant disagreed. He said Parker were in the gift business and that the gifts happened to be pens, and he was right. Nobody buys an expensive pen for themselves.

If you understand what you're selling, then you can sell it better. You can also future-proof yourself and not go the way of Kodak, who thought they were in the film business and not the 'taking photographs' business, so ignored digital cameras for a long time, despite having invented the first one in 1975. You go bankrupt by not understanding what you really sell.

So back to the original question. What do analysts offer?

Answers... Numbers... In advertising, I could tell you that spending a million pounds on TV will make you two million pounds in extra profit. In football, an analyst could tell you that signing the latest bright young thing from Italy should increase your points total for next season by ten.

That's the visible output from our work, but why does a decision maker want that information? In one word, what is the analyst selling?


In an uncertain world, we sell certainty. Confidence. The ability to know.

Since I've started analysing football, two themes keep bubbling up in conversations among football analysts on Twitter. One is a huge frustration that clubs appear not to be listening to the analytical community and what it thinks it can add to the game. The other is the large role that luck plays in winning football matches.

I think these two are related.

As analysts, we're hugely interested in chance because it sets the limits of what we can know for certain. In a football match, we obviously can't predict the bit of the result that is down to luck. If two teams are incredibly closely matched, who will win? It could come down to inches either way, on just one shot in the 90th minute, that strikes a post.

In a sales model, we often have measures which we're not statistically confident about. The model says that a marketing campaign is probably working and generating extra sales, but it isn't sure.

This is a problem, when what you're selling is certainty. Undermining the certainty that you sell is a Bad Thing.

What do we do? Do we make claims that aren't substantiated? Offer 100% certainty, even though we know it doesn't exist? Some people do. They quickly get found out as charlatans. Let's not do that.

What we can do is focus on what we know and move slowly onwards from there, because if you've done a big piece of work and you still don't know anything with more certainty than the person who commissioned it, then you've wasted your time. Start with the building blocks that you're confident in.

In marketing, analysis has a foothold because we can do this. We can walk into a business, run an analysis, offer some certainty about the world and critically offer a set of decisions that will improve the current situation. "Will improve" in analyst language means "will probably improve" but we tread a fine line.

In offering this certainty in an uncertain world, partly what we do is transfer risk from decision makers, onto ourselves. If you hedge your bets and prevaricate about what is the right decision, all of the uncertainty and all of the risk is still with the decision maker. They're paying you to make some of that risk go away.

I've yet to see very many of these types of conclusions in football analysis; concrete, positive strategies, based on statistics, that will help to win more games. Proving what doesn't work is easy.

We think that around 35% of match results may be down to luck.

We think that sacking your manager doesn't make any difference.

We believe that winning a cup trophy doesn't make you a better manager than the guy you beat in the final.

These are fascinating things and essential to understand, but it's positive conclusions that will make the difference in getting analysis adopted in any field. If you're a football manager, what's the knowledge above worth? A consolation prize as you sit at home, sacked, that you were just unlucky?

We sell certainty. And if we don't have any certainty to sell, we've got nothing.

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