In this post, we are going to integrate two concepts that you can use to support your growth hacking initiatives.
Lagging vs. leading indicators
A lagging indicator is more like the output from some system, whereas a leading indicator is more like an input to that system. For example, if Sam is looking at the statistics from his business from last month, a lagging indicator would be the revenue, which is kind of like the output of that business system for that month, whereas a leading indicator might be the time allocation that Sam’s growth team put into different marketing initiatives that went out there to support the business. You can use correlation between lagging and leading indicators and try to see if there are relationships there.
Growth hackers have the ability to change the leading indicators because these are things that you can manipulate, whereas a lagging indicator really is a result of the system so you cannot manipulate it. You want to tune your mind especially into the leading indicators.
Correlation vs. causation
The correlation is relationship between variables. It is useful for looking at how a segment would behave on your website. For example, you could determine how a geographic segment behaves when they visit some page on your site. Do they ultimately then take some action?
You could make a correlation between that geographic segment, the visits to that page, and then the actions that were taken.
Causation shows a causal link. For example, this would be the number of shares of some post on a different social media network and then the amount reach that that post got. There is a causal link between the number of shares and the reach of that post. You want to be picky about how you use these stats and you have to really make sure that they’re relevant.
One famous example of a non-relevant positive correlation one is, if you look at the data, there seems to be a correlation between the number of pirates on the sea and global warming. That is, the degree of warmth on the planet. Is this “correlation” relevant? Probably not- you have to be careful.
Check out our Growth Hacking with Digital Marketing Masterclass on Udemy.
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