There is a difference between information and insight
In this analytics powered age where we are getting drenched with analytics hype, everyone around us suddenly claims to be “data driven”. But what does being data driven mean ? In its true sense, data driven means that you, the data driven person, are able to generate insights from the data.
While it sounds simple, the keyword here is insight. Not every piece of information that you extract from your data is insight. It is critical to understand what exactly insight is. In my opinion, the following five characteristics make a derived piece of information an insight.
What exactly is insight ?
There is no standard definition of insight, which leads to it being an abused term but here are five specifics that I believe define a true insight:
An insight HAS TO contain new information
The information has to be new, relevant and non-trivial. To be an insight, and not a mere observation, the information must be more than ” this trend is going up”. It may even be counter-intuitive, which is often the most interesting finding.
An insight has to quantify causality
An insight has to be about cause and effect. A marketer needs a lever to pull, something to do to effect a change. An insight needs to measure how a change in one variable impacts a change in another variable.
An insight has to provide a competitive advantage
An insight has to be a piece of intelligence the firm’s competitors do not have. All intelligence is based on awareness of some information. An insight provides intelligence such that the firm is in a better competitive situation.
An insight must generate financial implications
An insight should be measurable. Whether an ROI or contribution margin or risk assessment, there should be some financial implication with any insight. If there is not a measured increase in revenue or satisfaction, or a measurable decrease in expenses, the validity of the analyses should be questioned.
An insight should be all about action-ability
All the characteristics of an insight drill down to one thing -action-ability. If an insight provides action-ability, within the dimensions mentioned, it is providing marketers with what they need to make better decisions. An executive must execute, must make decisions. The hypothesis is that if these decisions are based on date then the choice of making the right decision increases.
Views my own.