I’ve been spending more and more of my time looking at all the data I have surrounding my life and my business. Its interesting to see whats going on at a very granular level, and then zoom out and see the forest itself.

Its also intriguing to see how other people use data. Some people use charts and graphs to tell a story that doesn’t necessarily play out with a closer look, while others take a close look and find something you wouldn’t necessarily see on the surface of the data.

Take for instance Business Insider’s Chart of the Day , they have all sorts of interesting charts compiled from all over the web. Sometimes they are completely outrageous, sometimes they are insightful (mostly they are just charts though). What is interesting is how the headline of the Chart often varies from the data in the Chart. Take this for example:

Yes the people who don't want one doubled, but the people who do want one tripled

Yes, the percentage of people who don’t want one doubled, but the percentage of people who “would like to buy one” tripled, and the percent of people who replied “No, I’m not interested” was cut in half.

Charts are fun ways to take a snapshot of some set of data and to quickly illustrate a point. But is really interesting to see what kind of crazy stuff comes out of the data, not the parts that complement the story you are telling, but the data points you had no idea you’d find.

Look at this chart comparing the last 4 weeks of traffic on one of our sites. The chart covers the exact same days of the week, from a year ago in January. There are no significant events that would drive traffic, other than a slight spike at the end from Valentines Day searches.

Look how each day lines up, fascinating to me

Look how the trend of the days of the week follows so precisely. The first thing I saw when I looked at this chart was the fact that we are down about 7% y-o-y, but then I looked closer and saw the parallel movement across the chart. Look how the dips correlate, and the spikes match up. I’m now intrigued enough to put together a chart of all the data from all our sites and see how this matches up.

I’m not sure what to takeaway from this type of find, but if you just look at the headline, you miss the real gems.

Thanks to Darren for bringing my attention to this great new tool. Woopra is the latest analytical tool I’ve seen. And its wicked cool.

It has a really nice interface that allows you to see, in real time, who is on your website, how they got there, what they are looking at and where they go from here. On top of this exceptionally interesting data, compiled live and as it happens, it has an exciting feature - chat. You are able to have a conversation with the person who is visiting your website, in real time.

This really got me fired up. I was done with “work” and home with my girlfriend, and I got the invite from Woopra, set it up and as soon as I was up and running I was “wowing” every few seconds. Watching visitors come to our site, how they got there, what they were looking at and for how long, and where they went from there. It’s very interesting data, and very exciting to see happening live!

The implications from this (at least to me) are nothing new, but the fact that this is live for FREE is a great. I’m not sure what their revenue model is going to be (assuming s Freemium model of some sort), but I can see alot of value in the site. Imagine if advertisers were able to monitor this data in real time, and engage in a conversation with my visitor (yes the big guys have similar chat features…), or if I was a smaller site who could see a potential customer on our site, be able to track where they came from and what they looked at and most importantly what call to action was most, or least, effective.

Its a very fun interface to use, and its exciting to see how visitors interact with the web, in real time. It makes typical analytics look like SportsCenter compared to a live game.

In a recent fit of analytic interpretation, I really started digging down into our different analytical programs. Google Analytics is the most comprehensive we have, we use two different programs based on log files, and several script based tools.

Going back a ways to a post by Darren Herman, Numbers Don’t Lie, Except When They Do, he touches on a very important point in the measurement of visitors, which set of data is accurate. While there have been recent reports on deleted cookies increasing measured visits, there have been opposite accounts of under reporting.

My recent experience here evolved from a conflict that was directly affecting my advertising budget - Adwords was not agreeing with Analytics. In the process of tracking which Adwords keywords were resulting in the deepest visits into my site, I discovered that while Adwords was sending X amount of clicks per day, analytics was reporting fewer. In one keyword, Adwords charged us for 57 clicks, while Analytics was only reporting 43. Now that is a major discrepancy. While the value of this is not huge (at $.17 CPC) but at a percentage of difference this is major. For one particular campaign Analytics reports 1,049 visits from that keyword over the course of March, Adwords is reporting 1,246. These aren’t showing up as bounces, or repeats, these are just clicks from Adwords. If I was dealing with 5700 versus 4300, now we are talking major dollars, and major pains.

So then I head over to my AdSense account, and of course page impressions are different again. Google has responded with a fairly ambiguous explanation of log files versus scripts and varying reporting methods, but nothing on their own methods and why they disagree, conveniently to my disadvantage. I am certain that if they noticed my Adsense account was receiving more clicks than it actually was, they would fix it.

But back to the issue at hand, how are advertisers and agencies supposed to gather the correct data. One of my sites gets about 250k page views a month. According to Google Analytics - 60k. That discrepancy does not compute. Deleted cookies might inflate my unique visitor count, but how does that account for 45 GB of data transfer. And thats not email solely traffic to our website.

In December our sites crashed due to a server overload. What happened, did the 145 visitors that Google Analytics reported cause that? I doubt it. Quantcast, Alexa, SiteMeter… they are all way off. How do these all work. It is a learning curve for me, although I’ve been learning for a year and a half now, I still don’t get it.

Log files reported 120k visits to my network in March with over 750k page views. QuantCast reported 16k with 80k page views. Who am I to believe? Perhaps more importantly, who are my prospects going to believe?

I’m not sure that there is much scientific data to back this up across the board, but in my experience this theory/rule works. There is alot of click-through data, and conversion ratios that would support this as well.

My 5% theory is that ultimately about 5% of your efforts are ultimately going to succeed. Whether it is converting a lead in sales or converting a purchase on your website. And sometimes 5% is very good. The best online stores convert <5% of their visitors into a purchase, 3 - 4% is often considered excellent.

Now, this theory has alot to do with a lack of focus that many people, and most businesses have and is a by product of the long build up of the mass market. As the internet has grown in influence and instant communications have flattened and shrunken the world, the mass market is largely disappearing in favor of small, segmented niche markets. These markets are allowing niche businesses to succeed wildly by focusing on people who want, need and have a strong desire for their products or services.

My self learned lesson (recently and thanks to a little inspiration from Seth Godin), is that in business and in life, it is tempting to throw cast the wide net and see who we can catch. However, it is often quite to your advantage to focus on what you do best.

On the other hand, not every product has a tiny niche market that you are able to reach. There are many factors that might prevent you from reaching that market (technology, scale, personnel, etc), and sometimes you are better off going after a larger piece of the pie.

What I am essentially getting at is that in life and in business you need to focus on that 5%. Whether you choose to narrow your focus on a 5% niche, or you choose to take the 5% conversion rate you have and focus on increasing that. Instead of casting a larger net, focus on landing a high percentage of your casts. Maybe you narrow your business, or maybe you get better at it. Either way, the rest of the world operates at 5%, and you (and me) need to find a way to make that 5% more valuable.

So take a look at what you do, and see if you can do it better, grow that 5% into 98% or to 8% one way or another, the 5% rule will make sense in what you do.