How to scale in the modern business landscape

How to Scale in the Modern Business Landscape

All that it takes to scale your business is the proper data. In the following video and blog post, we’ll take you through how to take advantage of the information that you already have and use it to scale your business, no matter the industry.

 

Data, Information, Knowledge, Wisdom, and Praxis

Let’s simplify and redefine your views and definition of data. Data is simply the path to information. And information is your road map to knowledge, knowledge guides you to wisdom, which ultimately leads you PRAXIS, which is the ACTION you should take based on the knowledge and wisdom you have.

Data is simply events or outcomes, information is when you understand the relationships between those isolated events, knowledge is understanding the patterns- looking at trends over time and correlations in what is and is not working over time, wisdom is understanding the underlying principles and CAUSES, while PRAXIS is the action you take once you have that wisdom.

Data is an event or outcome without any context or true value by itself. Something like: IT IS RAINING. In and of itself, that would not be a revolutionary.

Information, however, is being able to connected multiple pieces of data together to see correlations and relationships: “the temperature dropped 15° and then it started raining”

Knowledge is then understanding the patterns between the variables: “Knowing that when humidity is high and temperature drops, the atmosphere is often not able to hold the pressure and so it rains”

Then wisdom is where we able to stop looking at the past, and we are now able to extrapolate and forecast what WILL happen rather than what HAS ALREADY happened:  “UNDERSTANDING ALL INTERACTIONS BETWEEN EVAPORATION, TEMPERATURE CHANGES, AIR CURRENTS, AND BEING ABLE TO PREDICT RAIN NEXT WEEK”

Lastly, Praxis is the practical application of all this wisdom in order to get positive results: It’s being able to predict that it will rain on your vacation next week, and that you need to pack boots and an umbrella to prepare for your trip.

The ultimate goal and outcome we are looking for is a result of the actions we take based on the wisdom we extrapolated from the raw data.

So here is a quick side note for you:
“Not taking action from data is like owning a race car and never putting fuel in it”
There is a ton of data available to you, but data itself will not grow your business.
Data itself will not give you the results that you want,
The knowledge you gain from data will help guide you and your team to make the best informed decisions on what actions they should and should not take throughout the day.

So let’s simplify this one last time before moving on to your action steps and road map to scaling.

Data is WHAT HAPPENED in your business, information is understanding the relationship between WHAT happened and WHERE and WHEN it happened, knowledge is understanding the patterns that tell you HOW that happened, wisdom is understanding the principles and mechanics of WHY that happened, which leads you to be able to predict when it might happen again in the future, and at each stage in this journey, Praxis is taking ACTION based on the data, information, knowledge and wisdom you’ve gathered.

Becoming Data Rich

By taking those actions, you are getting NEW valuable data. This is the path that the leaders in your industry are taking, this is what helps them grow and scale, it tells them exactly what is and isn’t working, and how to increase their revenues and profits… this is THE PATH ….. To becoming DATA RICH

Now you understand the road map on how to use data to scale. Up to this point in history, BIG DATA was only accessible to enterprise mega giants because collecting data and hiring data scientists for extracting and analyzing data could cost millions in Technology and Human Resources.

However, nowadays millions of rows of DATA can be found in our cell phones, in the back end of our email systems, and tracking on our websites, so raw data is now accessible to any small business owner.

So the question is, how can you take the raw data that is already available to you and use it gain knowledge and insight to scale your revenues and increase your profits?

That’s what we will be covering in the next part of this blog, what ACTIONS TO TAKE, no matter WHERE YOU ARE on the spectrum, to move to the next stage of data maturity.

Becoming Data Mature

So let’s start at the beginning: your outputs are only as good as your inputs. The foundation for growth is first HAVING data.
When small companies come to us and ask us how to scale, they typically do not have a foundation for success.

Data Foundation Stage

Here are some quick questions to ask yourself to see if your company is in the data foundation stage:

Do you have tracking in place at all stages of your customer’s journey? Including a basic Google Analytics set up?
Are you not using advanced tracking like UTMs, Custom Conversions, event tracking or pixels?

Do you know what KPIs your team should be monitoring?
Do you have standard operating procedures that everyone follows for naming conventions in your systems?

Are you or your team members MANUALLY creating excel or google sheets for your reporting because it’s all stored in a bunch of different technologies and is disparate?
Or are you simply logging into each of your systems to look at the native reports?

If you answered YES to most of these questions, then you are in the FOUNDATION stage.

Data maturity stage one

Your main action step in order to become more mature is to focus on TRACKING and MONITORING.

Remember, your outputs are only as good as your inputs, so we need you to HAVE data first. That’s the foundation for you to be able to scale.
In order to progress, you need to:

  • Implement tracking procedures in GA and UTMs
  • Define what metrics are important for you and your team to know
  • Implement SOPs to make sure the data is clean and consistent

Even if you don’t have the resources right now to do anything with this data, you need to start GATHERING it so that later, when you can afford to look back for patterns and hidden areas of opportunity, you have something to review… you can’t RETROACTIVELY pull data if the data wasn’t being tracked… so PLEASE, make sure you do this now… you will thank yourself later.

Automation Stage

Once that foundation of data collection exists, you can move on to the next phase: Automation

You’ll know if you are in this stage if you have all the complex tracking in place, but you or your team is spending a ton of time gathering valuable insights from a bunch of different systems and compiling them together into google sheets or into excel and pivot tables.

Let’s chat about this for a second:

What compound interest is to your money, automation is to your time

It’s exponential leverage to scale
It’s reduction in overhead, it’s focus on what’s important – the ANALYSIS of the information, rather than the collection of data.

Data maturity stage two

To advance higher and to scale, the focus is on integrating your systems together so that they automatically transform the raw data into the insights you need to take action. This allows your team to focus on valuable actions rather than mundane data entry. In technical terms, this is called ETL (automatically extracting, transforming and loading your data into one place).

In addition, setting up this automation lays the foundation for visualized reports or DASHBOARDS. Dashboards allow you to quickly see the highs and lows of your business, and let you quickly see patterns and anomalies of success, as well as those areas of wasted time, money and valuable resources.

Finally, it also allows you to share this information with all the people on your team. You wouldn’t believe the value that democratizing your data can have on your organization… sharing this data allows your team to bring valuable insights to the table and different perspectives that you might not have seen. We call this the LIFT EFFECT.

Optimization Stage

So once you have the foundation of all your data tracking, and after that data has been gathered to one place, and you have automated reporting in dashboards,

THEN you can focus on optimization and analyzing really fun CAUSATIONS between your internal data and EXTERNAL factors…

For those of you who aren’t TOTAL nerds like I am, let’s define this because there is an extremely important principle in statistics that states: CORRELATION does not imply CAUSATION.

As a simple example: Polio rates and Ice Cream sales from 1949. Although they are CORRELATED, that does NOT mean that Ice Cream is the CAUSE of polio. It is very simple to see here, but how many of you make these assumptions in your business when you see trends or relationships like this?

The more data you have, the more accurate picture you can paint among it’s relationships. The more data points you have, the better you can tell which one is most accurate.

You have a ton of INTERNAL data, but there is ALSO a ton of incredible PUBLIC data that you can integrate with in order to gain a more robust understanding of your business, your ideal customers, and their purchasing behaviors.

 

Imagine knowing that when temperatures rise above 75º, your return on ad spend for your Sunscreen company increases by 15%…
or imagine KNOWING that your customers with the highest lifetime values have certain demographics or political affiliations?
Or that you have the best sales when certain economic factors align?

Data maturity stage three

Here at Praxis, we have found:

COMPANIES THAT CAPITALIZE ON CAUSATION
WILL SCALE:

THOSE THAT DON’T
WILL FAIL

Here is a real life example of this in use: Walmart sees a 7x increase in strawberry pop-tart sales when hurricanes are reported off the coast of Florida or Texas. Imagine being a competitive grocery store and not having enough pop-tarts in stock. You would suffer an incredible opportunity cost of potentially millions of dollars.

Can you imagine how many small to mid sized companies are put out of business because they don’t see these patterns? Because they don’t capitalize on these hidden insights that their competitors DO.

What causations are you missing out on in your business?

Mastery Stage

The final stage of data Mastery is for companies that are innovating and modernizing.

At Praxis, we help clients with the most cutting edge resources to help them understand their business better, including natural language processing, machine learning and Artificial Intelligence in order to innovate.

Data maturity stage five

To summarize, here are the recommended steps you can take to advance through each stage on your road to data mastery:

  • Data foundation- Tracking
  • Automation- Integrating
  • Optimization- Analyzing
  • Mastery- Innovating

No matter where your company is currently on this spectrum, these are action steps you should take to move you closer towards information optimization.

That is the definition of PRAXIS – the application of the knowledge you gain from your data.

Taking action from data, is the new competitive advantage. Here is your list of action steps for progressing:

  • Share this with your team
  • Collaborate to see where your business is right now
  • Follow the checklist for how to advance from each stage to the next
  • Assign appropriate team members each action step with a due date
  • Reach out to Praxismetrics.com if you need more information or help.

So, to recap the big rules of scaling:

  • Not taking action from data is like owning a race car and never putting fuel in it.
  • Your outputs are only as good as your inputs.
  • What compound interest is to your money, automation is to your time.
  • Companies that capitalize on causation will scale, those that don’t will fail.
  • Taking action from data, is the new competitive advantage

I’m Meaghan at Praxis Metrics, thank you for investing your time here with me today. Please connect with Praxis on Linkedin and Facebook for more resources to help you scale. We love to help companies like yours grow and achieve their goals faster, so please reach out to me if you have any specific questions about your unique business.

Good luck on your journey, We are looking forward to helping you scale!

Data driven marketing

Data-Driven Marketing for the Entrepreneur Who Failed Math Class

Data doesn’t have to be a scary thing.

In this video, we will simplify data, as well as talk about how to use data in your marketing, and how to use it in your life.

Going from a stable job at a power company to starting your own educational company teaching people beer brewing and beer tasting online doesn’t seem like a common career trajectory, but that is exactly what this entrepreneur did. Why? Because the data told him that he could.

What does being data driven mean?

Being data driven begins with knowing the numbers that are important to your business, and knowing what will drive growth in your business. There are only three ways to grow your existing business: you either need to get more customers, get larger order values from those customers, or you sell more things to existing customers. Every action that you take needs to tie back to one of those metrics.

It’s very easy to get lost in the weeds with data, but if you always tie each of the metrics back to those three objectives, then you will always be in good shape.

How can you think about your data to make it more manageable?

Start by asking yourself questions. Don’t start by looking at tools that you think that you might need, start by figuring out what drives your business forward.

One question that every business needs to figure out early on is: how much can I afford to pay to acquire a new customer? Once you figure out the questions like that, the questions that will drive your business forward, then you can start looking for platforms that will allow you to track the information that will drive you to those answers.

Once you have the platforms chosen, you will need to verify the data that they are passing back to you. You will need to determine a platform that you trust and make that the final word on what data you trust; we call this the single source of truth. You need to have one place that has the final say when it comes to important data points for your business: for your money, it can be your stripe account, for your leads, it can be your CRM. Find that one place that you can turn to and trust whatever it says for each of the important KPI’s that impact those key questions.

You will find as you progress in your data journey that there are redundancies in your data tracking, and sometimes the data will not line up between platforms; that is why it is important to figure out for each one of your most important KPI’s what is going to be your final source of truth.

It’s not about how many metrics you have, it’s about having the right ones and then having an action tied to it.

Whenever there is a data anomaly, you need to figure out what happened to cause it. If it was a good anomaly, you want to figure out how you can replicate it; if it was a bad one, you want to figure out how to avoid it in the future.

The key to finding those anomalies is to be in your data, or to have alerts set up so that you are aware when something changes in your business.

You can’t manage what you don’t measure.

Your output is only as good as your input, so if your data is inaccurate or if you are tracking the wrong things, then you may end up making decisions that will impact the success of your business off faulty information.

If you’re not tracking your data properly from the bottom up, you are not going to be able to have the data that you need.

From relationships to health, data is everywhere.

Data surrounds us in every aspect of our lives, it’s like the Matrix. And like the Matrix, once we learn how to see and understand that data, we can do remarkable things with it.

People and data together can do anything.

My name is AJ Yager at PraxisMetrics.com and thank you for investing your time here with me today. Please connect with Praxis on Linkedin and Facebook for more resources to help you scale. We love to help companies like yours grow and achieve their goals faster, so please reach out to me at my email as well if you have any specific questions.

Good luck on your journey!

Encompass Health Data

How Encompass Health became data rich

What does data have to do with medicine?

Obviously a lot. Just in practicing medicine, doctors need to examine a multitude of data points; but then they also have to run a business on top of that. Every business has their own set of metrics and KPI’s that they have to track, but compounding that with the difficulty of running a medical practice can be too much. That’s where Encompass Health steps in. They help the doctor’s offload some of the office work so that they can focus on practicing medicine, and we help them in that quest.

How did Encompass Health get involved with Praxis Metrics?

Encompass Health was initially just using Domo for their data visualization, but they wanted to get more training on how to best utilize the program. Seeing as Encompass Health is still a small company, they couldn’t afford to dedicate an employee to learning the platform. Contracting with Praxis allowed them to have an outsourced data team available whenever they need, but at a fraction of the cost of an employee. This also allows them to take control of the platform and learn at their own pace, and then whenever they need help, Praxis can step in to help.

How did Praxis Metrics help?

Praxis helped them with the visualization of their data as well as the ETL (Extract, Transform, Load). The process of ETL is to take data that is formatted, reported, and measured differently in disparate systems and standardizing it so that it can be visualized together.

The team at Encompass knew what they wanted their data to look like, and then the team at Praxis was able to execute on that vision. We set up their data as an executive view, with the option to drill down into specifics. In the healthcare industry, most people focus on the executive level summary. From there, individuals may want to drill down into the details; so we set up their dashboards with that option. The Encompass team could set up the executive view, but the Praxis team also created a drill down path for them as well.

What benefits has Encompass Health seen?

Encompass Health knew that they wanted customization first and foremost. The dashboards that we built allowed them to do just that.

Another benefit was the outsourced data team; as they stated, Austin is a powerhouse of an employee. Austin knows data extremely well, and can create almost anything that the mind can conjure.

Being able to take their data on the go, and view it wherever they need to has also helped them tremendously.

What’s next?

Encompass Health has become data-rich, and now they will help their doctor’s become data rich as well. They plan to start rolling out more advanced features for their clinicians, helping them to make even smarter business decisions.

If you’d like to learn more about the dashboards discussed in this video, visit us here: https://bit.ly/2VYgKZq

Becoming Data-driven

4 vital steps to becoming a data-driven company

Step 1- Remove emotion from the equation.

Your data will always tell you a story; it just sometimes tells a story that you don’t want to hear. Often we find that people stop listening to their data when it gets hard, or right when the details are becoming the most important; but those are the times when you need to listen to the story that it’s telling you even more.

You need to take emotion out of your decision making process if you really want to become a data-driven company. Often the climate of the business has a huge impact on our lives, so it’s often difficult to separate your emotions from the decisions that you make, especially during the hard times. When the times are the toughest are generally when you need to be the most data-driven, and those are the hardest times to take emotion out of the equation; but if you do, it will help you to trust your decision-making process much more.

How do you remove emotion from the equation? The simplest way to remove emotion from the equation is to just let the numbers speak for themselves. No matter how hard things get, they will always get harder if you make the wrong decision.

It’s one thing to make the wrong decision because you went with a knee-jerk reaction; it’s a whole other beast to make the wrong decision because you had bad data. That’s why our next step is:

Step 2- Get your tracking in order.

You can’t make good decisions off of bad data. If your tracking is off, all of the insights that you get from that data are tainted.

One of the top 5 mistakes that businesses make is assuming that everything is tracking properly. Google Analytics is a very powerful, robust tool that helps businesses gain insights into their customers and their behaviors. It is also the number one most underutilized and error-prone tool used by small and medium businesses.

Analytics tools are notoriously difficult to set up properly, and unless you have an expert come in to set it up for you, or you invest the time to truly understand how to set it up properly, it can quickly turn from a bucket full of data to a bucket full of holes.

Many businesses know that their tracking is not correct, but they don’t know how to fix it; so they take the incomplete or inaccurate data that they have and they do their best with what they have.

The end goal of this step is to get you to the point where you have:

  • Organized UTM’s
  • Advanced Pixels
  • Custom Conversions
  • Event Tracking

We’ll go through each of these goals individually:

Organized UTM’s:

UTM’s are one of the most powerful tools that you have in your analytics arsenal, but they can also be very daunting to get started with. That is why we have written several blog posts on the subject matter, which you can find here: How to increase revenue with one simple tweak, Why UTM’s are so important, and we even set up a course that will teach you from start to finish how to create UTM’s and even has a spreadsheet that will automatically create them for you here: https://datarich.thinkific.com/

Advanced Pixels:

Tracking pixels generally have a similar functionalities to cookies. However, as more and more users are blocking cookies using browser functions, cookies provide incomplete data, and are often blocked completely.

Tracking pixels area good alternative to cookies as they cannot be blocked by a normal browser currently. Pixels gather a vast array of user data and pass it along to analytics tools. Some of the most popular advertising platforms use pixels to track user behavior and conversions. In addition to the basic tracking functions, pixels can also track custom events, such as video plays, button clicks, or time spent on a page.

Custom Conversions/ Event Tracking:

As we discussed in advanced pixel tracking, you can track so much more than simply page views and conversions. There is no end to the number of behaviors that you can track on a page. We recommend setting up custom goals, conversions and events within your analytics properties and assigning values to each of these items. While someone may not have purchased through your site, they may have filled out a contact form, or given their email address. If you know the average conversion rate for clients on your email list, and the average order value for them, you can assign a value to each email signup.

It’s just like we always say, your output is only as good as your input. If you can get your tracking in order, you are more than halfway through the journey to become a data driven company.

Step 3- Automate your reporting

Once you have your tracking in order, and you know that you have accurate data; you can move on to the next step: automation

You’ll know you’re ready for this step if you have all the complex tracking in place, but you or your team spends a ton of time gathering valuable insights from different systems and compiling them together into google sheets or into excel and pivot tables.

What compound interest is to your money, automation is to your time.

Businesses that we work with get most excited by this step, because it’s where we begin to focus on scaling the business. Automation leads to a reduction in overhead, increase in productivity, and allows you and your team to focus on the analysis of the information, rather than the collection of data. Automation eliminates the human error component of reporting, further allowing you to have complete confidence in the data that you receive.

To scale your business and progress even more, the focus shifts to integrating your systems together so that they automatically transform the raw data into the insights you need to take action. This allows your team to focus on valuable actions rather than mundane data entry. In technical terms, this is called ETL (automatically extracting, transforming and loading your data into one place). For more information on this process, and how we use it with the companies that we work with, be sure to check out our post on data-driven mistakes even good ecommerce business owners make (and how to avoid them).

Step 4- Democratize the data

The final step that you need to take is to share this information with all the people on your team. You wouldn’t believe the value that democratizing your data can have on your organization. Sharing data allows people to bring their diverse backgrounds and viewpoints to the data to help interpret it.

By allowing your team to access the data, they can bring valuable insights to the table and different perspectives that you might not have seen. We call this the lift effect, and we have seen it happen many times across multiple companies and industries. We recently talked to one of our clients about the value that democratizing data has had for them. Be sure to check out our full interview with Organifi here.

Everyone has their own ideas about what it means to have a data-driven culture. We don’t believe that this list is exhaustive by any stretch of the imagination; but we do believe that if you follow these steps, your business will transform into a data-driven organization. If you follow the steps that we outlined here, we guarantee that you will see a change in your business.

If you have questions on any of these steps, or need help with implementation; we are here to help. We provide comprehensive analytics audits to help see where you may have issues with your data. If you struggle with automation, we have a series of pre-built dashboards that can automate your data for you. If none of those interest you, we can also build out custom dashboards to measure unique metrics for your business.

Increasing Revenue with one simple tweak

Increasing Revenue with One Simple Tracking Tweak

If you are doing business online and want to know how to accurately track return on investment from your online marketing efforts, then you are in the right place!

Whether you are a seasoned pro or just getting started this training is for you. I am going to show you how to overcome the #1 Mistake 90% of Companies Make When Tracking Revenue and the best part is you can get started right away!

I am AJ Yager, Chief Growth Officer and Co-founder of PraxisMetrics, a business intelligence agency that helps you escape spreadsheet hell, eliminate wasted resources, and get you accurate data you can trust to make better decisions! From tracking to dashboards, we help you scale faster.

We have worked with companies from e-commerce to retail, digital publishing, SAAS, manufacturers, VC Firms, mega churches and investment firms.

I am really excited to share this content with you today but first I want to kick this off with a quote you may or may not have heard before:

This is a very famous saying in business by the one and only Peter Drucker.

“You can’t manage what you don’t measure!” – this is very important to understand, especially when marketing online.

Tracking or “measuring” is the foundation of everything in your business and will allow you to make better accurate decisions. My intention here is to help make sure that you understand this and avoid becoming part of the 90% of companies that keep making this mistake. I want you to grow exponentially from your data and tracking efforts.

So remember, Marketing without data is like driving with your eyes closed.

Ok, let’s dig in.

What you’ll learn-

By the time this video is done, you’ll understand:

  • The biggest mistakes when it comes to tracking
  • Removing the guesswork from ROI (Return on Investment)
  • Exactly what UTM’s are and how they can take your marketing data to the next level
  • Where (and how) to get Started
  • Why proper data tracking is critical to your business (and what valuable insights that data can provide)
  • How to build a UTM link and the most effective way to utilize them

The biggest mistakes when it comes to tracking-

One of the biggest mistakes we see too often is assuming that everything is tracking properly.

What I mean is that most companies and you may be included in this, think that everything is tracking correctly in all of the different tech systems that run their business; this is NOT TRUE.

Here is why: Simply put, many technologies have software limitations. Out of the box software set-up isn’t complete or isn’t robust enough. and many times there is such a learning curve that the person in charge of it didn’t finish setting up to track everything properly.

SOPs not established or practiced by all team members and you may be missing platforms in your tech stack.

The biggest mistake when it comes to tracking

Finally, you may be lacking cross platform UIDs , which are Unique Identifiers that help connect pieces of information in one system to another.

The point is, you simply can’t afford to invest in these technologies, if you don’t take the time to make sure they are set up to track the right data/information for your business.

The #1 most under-utilized and error prone tool we see is Google Analytics; it is very powerful when set up correctly and best of all a FREE tool that should be in your arsenal.

When it comes to Google analytics, most marketing teams don’t set it up correctly to begin with because it takes a google professional or lots of time to research; or they do get it set up but then forget about it; or worst of all, they don’t validate or test to make sure everything is tracking correctly.

They may try to use Google Analytics as a dashboard to visualize their data. There are some cool reports in GA, but it really isn’t an easy way to digest information.

Last but not least, most people simply think GA is too complicated so they don’t even try… which is totally understandable.

Now this video training isn’t focused on teaching you how to set these tools up, there are plenty of free resources out on the web for that or you can contact our team at praxismetrics.com and they can help you out.

Removing the guesswork from ROI (Return on Investment)-

Ok so now that we have covered that mistake and had a quick overview of Google Analytics, let’s talk about ROI…

The best way to start off is to reminisce back to 2005 when Google Adwords was launched. it completely changed marketing and advertising as we know it.

Google Adwords had conversion tracking which removed the guesswork from ROI. It allowed marketers and business owners to pay for online advertisements, know the exact cost of each ad click, AND know whether or not a particular ad click resulted in a sale.

It was game changing … From that moment forward began the demise of most traditional forms of advertising. And it wasn’t that online ads with conversion tracking were better marketing, it was just the simple fact that you could calculate your exact ROI that mattered.

But if you could track your ROI accurately with AdWords, why not other online marketing activities?

What about:

Why Modern Marketing makes ROI Calculation Difficult

  • Blog posts?
  • Display ads?
  • Webinars?
  • Email Marketing?
  • Social media posts?

These are all digital forms of marketing you SHOULD be tracking.

The reality is most marketers either don’t know how to do it or are too lazy to set up the systems required to do the tracking correctly. Fortunately, there’s just one tactic you need to know about to track most of your online marketing activities and own your niche.

We’ll also look at how you can apply this approach to a variety of marketing channels and how you can use various analytics tools to drive insights from your data.

As I mentioned earlier, after watching this video you’ll know how to calculate the ROI of an online marketing campaign with precision, so that you can double down on your wins and quickly cut your losses.

Now let’s talk about Why Modern Marketing Makes ROI Calculations Difficult.
You’d think it’d be easy to track the ROI of an online marketing campaign, there’s a digital “paper trail” for every click, tap, and dollar earned…right? You would think that Advertisers and online marketers already have this stuff figured by now, right?

It turns out, that’s not exactly the case. And when you dig deeper, you quickly learn that calculating ROI isn’t as easy as it seems; which is a shame, because ROI used to be really easy to calculate.

But Let’s take a minute to make sure we understand the basic ROI calculation:
If I spend $100,000 and I make $300,000, I can calculate easily, that I’ve made a 200% return.

Money out minus money in. That’s your typical ROI calculation. But ROI equations just aren’t that simple anymore. Especially when you consider all the marketing channels offered these days.

You’re not just going to do one form of online marketing, like just content marketing. You’re probably already doing SEO, video marketing, and affiliate marketing. You may even throw in some Facebook advertising as well. You’ll likely even give influencer marketing a try. And you should!

With modern online marketing, we have to be able to prove a return on investment for each one of those individual channels, you can’t just bundle everything into one neat figure.

If you’re spending $100 across 3 different marketing channels and you’re generating $200 – it doesn’t mean all marketing channels are ROI positive.

It could just be that one of them is dramatically over delivering, while the rest are losing you money. But if you’re not tracking marketing channels individually, you won’t be able to work out whether this is the case or not. You won’t know which steps you need to take to improve your marketing ROI.

This brings us to the #1 Mistake 90% of Companies Make When Tracking Revenue : Not using UTMs for all online marketing efforts.

Exactly what UTM’s are and how they can take your marketing data to the next level-

With all that being said, now we’re going to focus on a specific tracking model that’ll work with any number of marketing channels and analytics tools: Content marketing, social media, Instagram campaigns, emails, newsletters, drip campaigns, etc. whatever it is.

No matter what channel you’re focusing on and what analytics tool you’re using, this tactic will help you work out how people are reaching your website.

UTM Tracking

This approach works with every single analytics tool, which means that all of your analytics tools will be able to use this approach to collect data. Just remember, we MUST be able to prove an ROI from all of our channels.

UTMs – The Tracking Tweak That’ll Work for Anything and Everything-

UTM parameters (or UTMs for short) are the only way that you can track your marketing campaigns uniformly across most analytics tools. UTMs work with Google Analytics and many other tracking tools.

UTM is an abbreviation for “Urchin Tracking Module”. And “Urchin” happened to be one of the very best website analytics tools that used on-page scripts to collect visitor data.

Like a lot of great web software, Urchin was eventually acquired by Google.

A UTM is made up of five variants of URL parameters used by marketers to track the effectiveness of online marketing campaigns across traffic sources and publishing media. It is simply an encoded suffix that you append to a URL (A URL being a website link). The suffix can be quite long and is made up of various ‘parameters.’

Each parameter provides specific information about the link in question. And by stringing parameters together, you can track your online marketing campaigns with a tremendous amount of detail and granularity.

This might not seem like a big deal, but it’s one of the most powerful ways to track your marketing, your sales, or any activity you’re doing online.

For a real life example, I have an email campaign from an affiliate of ours named Justin Goff. All the links within that email used specific UTM parameters so that we could measure the effectiveness of that email campaign once the traffic from that email hits the website.

Let’s get into the nitty-gritty of how UTMs work by examining our example URL that has a UTM appended to it.

Initially, this URL might look really complicated, but once you understand the various parts, you’ll find it’s not too difficult to understand.
All in all, this example URL tells us 6 different things:

  1. The URL
  2. The campaign source
  3. The campaign medium
  4. The campaign name
  5. The campaign content
  6. The campaign term

Let’s drill down into more detail:

  1. URL – The website that’s running the campaign
  2. Campaign Source – Where the clicks come from (ex: search engine, specific website, newsletter #202, etc.)
  3. Campaign Medium – How the link was presented to them (in a search engine result, pay-per-click ad, email, etc.)
  4. Campaign Name – The marketing campaign the link belongs to (traditionally, marketing is done in a succession of campaigns, “Black Friday 2018” would be a campaign)
  5. Campaign Content – The specific part of a marketing campaign got them to take action (Optional. Good for testing different ad copy or A/B testing two different emails.)
  6. Campaign Term – The keyword used in a pay-per-click advertisement that generated the click and subsequent visit or what specific words were clicked on in an email (also optional)

This breakdown could possibly make your eyes glaze over the first time around. So stick with me.

This example URL tells us 5 different things.

  1. The campaign source: JustinGoff
  2. The campaign medium: email+send+LTVdashboard
  3. The campaign name: JustinGoff
  4. The campaign content: JustinGoffEmail
  5. The campaign term: N/A

And honestly, there are many ways to design a system of parameters that work for your organization. The trick is sitting down and designing it – and sticking to that design from here on out. We’ll get into more on that later.

The Website URL-

The Website URL is simply the site we’re tracking.

A word of caution: The above URL is an ‘HTTPS’ URL.
Before you start creating UTMs, determine whether or not your website is secure. If it’s secure, then all your URLs will be “HTTPS” by default. If they are not, then your website is not secure (HTTP). Whether your website should be secure or not is a whole other discussion for a different video.

The important thing is whether or not your website redirects from HTTP to HTTPS. If it does, that’s a good thing, but you’re going to want to make sure that you build all your URLs and respective UTMs as secure links. Otherwise, when the redirect happens, the URL might be stripped of the UTMs and this can have a negative impact on your ability to track data.

The Source Parameter-

This parameter is identifying the traffic source sending clicks your way. In the case of the example URL shown, the source is JustinGoff. The parameter happens to be designed for an affiliate of ours, but the source website is the same whether it’s organic traffic, affiliate or paid traffic.

In the particular case of Google AdWords, we sometimes recommend making the source “AdWords” because it will make it easier for you to analyze your analytics reporting later on. If you’re just going to stick to using AdWords as your only online marketing channel, then setting your source to “Google” is fine.

If I posted this link to Facebook, the URL would have Facebook (facebook.com) as the source.

Here’s an example of the different ‘source’ parameters you can use.

  • CPC
  • Tweet
  • Post
  • Email
  • Banner ad
  • Article Link

The Medium Parameter-

This, in essence, is how the person got to the website in question. Or in what medium the link was presented to them.

Let’s say you’re spending money on cost-per-click ads (CPC for short). The CPC ad then becomes the medium. In our example here it is email.

Here are some more examples of mediums:

  • Google
  • Facebook
  • Twitter
  • Mailchimp
  • Reddit

The Campaign Parameter-

Campaign name generally refers to your overall marketing focus that day, week, month, season, etc. This nomenclature is derived from the fact that traditional marketing is thought of in terms of campaigns. – something that the world should know about or even an idea your marketing team would like to test.

Let’s say you’re having a summer sale. Every link you create related to that campaign should have the campaign name “summer-sale-2019.” If you have a new product release, the campaign name could be something like ‘vitamin-drink-special-2019.’UTM Campaign Parameter

A slight word of caution:
There are two routes to go down when naming your campaigns. For seasonal campaigns, you might want to be somewhat specific and use a date based format like “summer-sale-2019”.

However, for a webinar series, you might want to keep it simple like “praxis-webinar-series” and not use a date based convention.

The reason why is because when you go back to review your data in your analytics tools, it can be helpful to see ongoing campaigns in one reporting batch instead of having them spliced up into smaller campaigns.

Going back to the Summer Sale example, you could be posting the summer sale on Facebook, Twitter, Pinterest, and even on LinkedIn. You might send out emails promoting this sale. You may even publish different pieces of blog content for it as well.

Any method you use to promote this sale online, it will all be grouped under the same campaign.

Having strict campaign names is important because it allows you to segment your data in Google Analytics via campaign names (and in other analytics tools). You can then easily assess the success of a specific campaign and gather insights for future campaigns. Most importantly, you can begin to understand the ROI of your marketing campaigns!

The Content Parameter-

This parameter identifies the specific content or written copy used in a campaign that led to someone clicking on your link and engaging with your brand.

The obvious benefit here is that it allows you to identify which copy is performing best for an individual campaign. Any conversion rate expert will tell you that testing copy alone can have the biggest performance insights when it comes to improving future marketing campaigns.

Additionally, the content parameter is helpful if you’re running a webpage A/B test. If you’re sending out multiple emails for a specific campaign, the content parameter can help you figure out which email converted better.

Suppose you send out two different emails, for the same campaign, each of which has a unique subject line. We could use the parameter ‘utm_content=a’ for all links within one email and the parameter ‘utm_content=b’ for all the links in the other email. In doing so, we can see which one of those subject lines drove the most conversions for a particular campaign. In my case here we just used JustinGoffEmail which was repetitive but it our own system.

Here are some examples of ‘content’ parameters.

  • Email subject lines
  • control or variation
  • content a
  • content b

It’s worth mentioning that this parameter isn’t mandatory, but in certain circumstances, it’s definitely worth using. The above example, representing such a circumstance.

The Term Parameter-

The term parameter, again, isn’t mandatory. But it can be helpful in a number of circumstances – notably PPC (pay-per-click / cost-per-click) campaigns.
This parameter can help you understand the word somebody queried which in turned served your online ad to them. In most cases, it relates to the keyword used for a specific advertising campaign.

This is helpful if you’re running a advertising campaign. When people click an ad and come back to your website, you can actually see which keywords are driving the most conversions. This scenario is probably the purest and most ideal tracking process when it comes calculating accurate online marketing ROI there is – so use them!

As mentioned, using utm_term isn’t mandatory. But by having it there, you can make use of even more segmentation and be even more specific with the marketing campaigns you’re running.

For example, you may have several links within an email that you’re promoting. By identifying each link within the email with its own unique utm_term parameter, you can know which link received the most click-throughs. You’d simply make the utm_term parameter the specific link text you’re tracking.

In our situation we didn’t use the TERM parameter so I left it blank.

Important Note regarding Revenue vs. Vanity Metrics-

There are a lot of marketers in charge of email marketing campaigns that’ll say — “hey, I got a 34 percent open rate. I got a 52 percent click-through rate. This email did amazing!!”

If one of my team members in the marketing department said that in my business – I’d look at them and be extremely concerned.

Yes, I do want to know how many people opened the email and I do want to know how many people clicked on the email… but let’s be real, we are in business to make money and deliver great value to our customers, so we MOSTLY care about how many people purchased. How effective was this campaign!?

If I can’t connect email clicks back to actual purchases, that’s a problem. If I can’t connect email clicks back to monthly recurring revenue, I’m even more concerned.

If you take one thing from this video, let it be this:
Make sure you’re using UTMs to measure important business metrics so you can know the actual return on investment from your online marketing activities. Don’t get caught up in vanity metrics.

How to build a UTM link and the most effective way to utilize them-

At a quick glance, UTMs look really complicated; so complicated in fact, that you might be worried about how you’re going to go about creating them.
Fortunately, they’re not that hard to create.

For starters, Google has their own built in tool you can use. There are also some other tools we suggest which you can go check out at praxismetrics.com/tracking-toolsUTM Building Tools

Back to the Google URL builder…. This tool is really easy to use and all you have to do is put your chosen parameters in the relevant fields. Notice all the elements that we talked about are all here ready for you to fill out.

Links that use UTM codes can look pretty messy. UTM links also reveal a lot of information about your marketing, this can mean competitors have access to vital campaign data. Some customers can also be wary of links that are long and complicated. Because of this, it’s a good idea to hide the UTM parameters.

We can do this using a link shortener like Bit.ly. And goo.gl

This is a really simple tool you can use to shorten your URLs. Bit.ly also provides click tracking, which provides further data on your campaigns.
Here’s a simple example of how Bit.ly works:

Once you put a link through Bit.ly, you’ll notice that the links a lot shorter and neater. This is all possible without harming the UTM parameters and your ability to track UTM data within analytics tools.

One of the most often asked questions is… How do you make sure to stay organized so everyone uses the same UTM tagging system?

This is a common problem. Especially if you’re on a team of several people and everyone is working on a specific campaign.

Let’s look at a classic example of where this becomes a problem: Valentines campaigns.
Valentines campaigns are wonderful at driving marketing managers insane. It’s an annual marketing campaign and of course you’re going to want to use UTMs to track your ROI and performance.

Then the inevitable happens: One team member spells the full word “valentines” out for the campaign parameter. Another team member spells it “Valentines”. Another team member spells it “vday”. So you’d have:

Standardized UTM Parameters

utm_campaign=valentines
utm_campaign=Valentines
utm_campaign=vday
All of these would appear as separate UTMs. Meaning the campaign data would be segmented into three different campaigns by your analytics tools. Don’t let this happen.

How do you prevent this?-

What we recommend is to build out an organized spreadsheet that your team uses and follows carefully!

Remember, your output is only as good as your input! – this is where your tracking SOPs really matters!

The end result is reporting or seeing your data in dashboards:
Your dashboards and reporting will NOT BE ACCURATE
Your dashboards and reporting will NOT BE CLEAR

When you shouldn’t use UTMs-

There’s one specific case where you should never, EVER use UTMs: when creating internal links on your website.

Most website analytic tools like Google Analytics are designed to help you understand what’s happening on your website by default. There is no need for you to code up unique UTMs to help you understand what’s going on.

If you start using UTMs to link to various parts of your website, you can artificially multiply session counts and trigger all kinds of negative elements that will corrupt your analytics reporting.

Alright well we have covered a lot of ground so far, now it’s time to wrap up and give you actions to go and do!

UTMs are the only way you can know the true ROI of your online marketing activities. If you’re doing business online, you have no choice but to use them.

And you should be really grateful that UTMs exist! It’s a blessing to be able to finally get this critical information. It doesn’t cost anything really, it’s just a matter of taking the time to create a UTM system that works for you. It can be challenging to design a perfect UTM system that will work for your organization right out of the box. It’s an iterative process.

You may make some mistakes along the way in order to figure out a system that works well for you.
It may take hours looking over your analytics reports and dashboards for you to finally see what conventions make sense for your monthly reporting.

There’s no way around this reality other than getting your hands dirty. So go do it!

We recommend getting a whiteboard and begin mapping out your UTM system with your team.
Determine your sources, mediums, how you want to use the content and term parameters.

Ask yourself, how do you want to incorporate UTMs for running A/B tests? Do you want to use utm_term for specific text within emails?

This will help collaboration will help you chisel out a great ROI tracking system that you can use for years to come.

Get started now and use a UTM link with your next post or in your next email and test it out!

UTMs Can Take Your Marketing to the Next Level-

All channels and all analytics tools work with UTMs.

When you start doing this you’ll have better data on your marketing campaigns.
You can then use this data to track the return on investment for any of your marketing campaigns.

Without UTMs, it’s going to be a lot harder to make definitive claims about your marketing campaigns, I know that for a fact.

Sure, you’ll make some mistakes at first, but once you get the hang of things, you’ll wonder what the heck you were doing before using UTMs.

If you’re interested in learning more about UTM’s and how to build them, we have a wonderful course (https://datarich.thinkific.com/) that will teach you exactly how to create and utilize UTM’s in your marketing efforts.

Again my name is AJ Yager at PraxisMetrics.com and thank you for investing your time here with me today. Please connect with me on Linkedin and Facebook for more resources to help you scale. We love to help companies like yours grow and achieve their goals faster, so please reach out to me at my email as well if you have any specific questions.

Good luck on your journey!

The importance of knowing the lifetime value of your customers

Data-Driven Conversations: The Importance of Knowing The Lifetime Value of Your Customers

What is the lifetime value of a customer? How does that affect the way that you market your products and scale your business?

These are some of the questions that we had in mind when we went into our conversation with Jeremy Reeves on the Data Rich Podcast. Below is the video of the entire conversation, as well as a transcript of the highlights:

What does it mean to be data driven as it relates to customer LTV?

Being data driven boils down to being aware of the choices that you are making, and making the right choices by utilizing data.

An example of this would be if you are looking to roll out a new product, you need to know exactly how much you can spend to acquire a new customer. If you don’t have data to tell you that information, you are essentially guessing, and that can cause you to be limiting yourself in terms of growth if you’re not paying enough for new customers, or it can be driving you out of business if you’re spending too much to acquire those customers.

If you don’t know the metrics, you don’t know what decisions to make.

How soon in a business should you worry about LTV?

This varies from business to business, but comes down to how quickly you want to scale your business. If you are looking for explosive growth, then LTV is THE metric that you need to worry about. This will help you determine the cost per acquisition that you are willing to pay. In the example above, they realized that if they set their break-even point per customer at 3 months rather than immediate, they were able to pay 30% more per acquisition, which allowed them to jump from making 15 sales per day to making 300-400 sales per day.

By drilling into the numbers and truly understanding the value of their customers over time, their sales were able to increase by 2500%! When you view the true value of a customer over time, you can make decisions like this that help you to experience explosive growth as a company.

How do you maximize returns based off customer LTV?

The best way to maximize your returns is to get extremely granular with your data. Go beyond just looking at the generic LTV of all customers, and see the LTV of customers based off of their referral source, or check to see what other products they purchase after the initial purchase. The more that you can break down the data and individualize your targeting, the more you can glean insights into your consumers, and in turn maximize your returns.

What is the best way to track LTV?

This is the question that you really need to answer for your business. You need to determine how you want to define and track the value of your customers over time. This will be contingent on the systems that you are using, the types of products that you sell, and how you want to think about your products.

Going back to the previous point about getting as granular as possible, you can break down the LTV of your clients based off what their initial purchase was, by referrer,

When should you make changes to your budget based off the LTV calculation?

Unfortunately, just like the last question, this depends on your business. If your company has a long buying cycle, you should probably wait to increase your budget until you see the results from your efforts. If you are able to make back your budget based off the initial purchase, you can increase your budget immediately. By understanding when people are able to hit that break-even point in your business, you can know exactly when you should increase your spend.

How can I set up tracking to make sure that I am getting good data?

You need to make sure that your attributions are set up properly in Google Analytics, so that you can break out customer behavior by traffic source in order to see exactly what your spend should be for each source. Past that, it is highly recommended that you break them out into funnels or campaigns that you are using so that you can properly attribute the LTV to each of the campaigns that you run, as well as the sources.

This requires a great deal of work up front, but once you lay the foundation of good data it is much easier to continue down that path, and you know that you can trust your data.

What is the number one thing that all marketers should know about the LTV of their customers?

The obvious first thing that you need is to know the number. If you are not conscious of the LTV of your customers, you need to find out what that is. After you are aware of the average LTV across the company, you need to get more granular with it, and drill down into the LTV per product.

Once you have those numbers, you need to determine your business goals. If you are in a growth stage of your business, where you are trying to scale, don’t be afraid to break even up front. Be aware of how long it will take for you to start profiting, and make sure that you are comfortable with waiting for that; but once you have determined that, you need to move forward. The business that can afford to spend the most to acquire the customer wins every time.

If you have any questions about dashboards, tracking, analytics, or if you want custom dashboards built for your business then talk to one of our data experts.

UTM's Demystified

UTM’s Demystified: Why tracking is so important to your business

Want to know the #1 reason most companies can’t attribute where revenue is coming from accurately?

Spoiler alert: It’s all about UTM’s.

Are you using UTM’s for all your marketing efforts? Have no idea what a UTM is?

No matter where you are in your tracking journey, this video can help you learn how to improve your tracking skills. We have also included a transcript of some of the best insights from our conversation below:

How can I make sure that I am being data driven in my business?

You need to take emotion out of your decision making process if you really want to become a data-driven company. Often the climate of the business has a huge impact on our lives, so it’s often difficult to separate your emotions from the decisions that you make, especially during the hard times. When the times are the toughest are generally when you need to be the most data-driven, and those are the hardest times to take emotion out of the equation; but if you do, it will help you to trust your decision-making process much more.

Your data will always tell you a story; it just sometimes tells a story that you don’t want to hear. Often we find that people stop listening to their data when it gets hard, or right when the details are becoming the most important; but those are the times when you need to listen to the story that it’s telling you even more.

What are lead indicators vs lag indicators?

What does lead indicator or lag indicator mean? A lead indicator drives a lag indicator. In sales, a lag indicator would be their revenue, or number of sales made. Sales people really don’t have direct control over how many sales that they make in a day, but they do have control over their lead indicator: how many calls they make that day. Content marketers don’t have direct control over how many website visits they get in a day, but they do have control over how many blog posts or emails they write.

Control what you can control. You almost always have direct control over your lead indicators. Focusing your efforts on improving the things that you have control over will always yield better results than focusing on the things that you have no control over. Everyone wants more leads and more revenue, but you need to drill down and find the things that drive that success.

In order to understand what drives your success, you need to have tracking in place. Once you know that your data is trustworthy, you can drill into it and find exactly what yields results in your business, and those become your lead indicators. By replicating your successes and holding yourself accountable to your lead indicators, you will drive success on your lag indicators. It’s all about accountability. If you hold yourself accountable to your lead indicators, you will drive that success on the lag indicators.

How do I make sure that I am tracking my lead indicators properly?

Your output is only as good as your input. Every business wants to know how they can be more effective. We have found that most of them don’t even have the right tracking in place in order to even find their lead indicators though. Most businesses have several systems in place that aggregate data, but then those systems don’t talk to one another, and the company isn’t sure where to go to get answers to their questions. Facebook will tell you that they are getting X number of conversions per day, Adwords will claim that they produced Y result, and Google Analytics will tell you something totally different from each of those.

The best place to start with tracking is at the very beginning. Before you ever create a piece of content, you need to know the intent of that content. Once you know the job of that content, you can hold it accountable to how well it performed the task. If the goal of your ad was to promote awareness, then you don’t need to look at how many conversions it produced. If the goal of the ad was to drive form submissions, then the number of likes on the post isn’t really important.

How does Metrics Mapping help my tracking efforts?

We here at Praxis like to go through a thought experiment known as Metrics Mapping. Metrics Mapping is a process designed to answer fundamental business questions with very specific, actionable data.

  • We start by asking ourselves a business question, such as, “How do we increase conversions on our site?” or “How do we get more qualified traffic to our site?”.
  • Once we know the questions that we want to answer, we decide on 3 key performance indicators that help answer that business question.
  • Then we ask: “Where does that data live?”. For every KPI, we need a source of truth, or a place where we can pull that data from.
  • From there, we validate the data. As much as we would love to just trust what Facebook or Google tells us, there are a million and one ways that your data can be skewed, lost, or misreported along the journey.
  • After that, we apply formulas, set up reporting, and visualize the data.

This process may seem tedious and difficult, but it makes all of the difference in making sure that you don’t waste your time on vanity metrics or tracking things that don’t really matter.

What are UTM’s and what do they have to do with everything that we have talked about?

As we talked about earlier, you don’t have direct control over lag indicators; you can only influence lag indicators through your lead indicators. On the other hand, you have complete control over your lead indicators; but most people don’t know which lead indicators have the most influence on the outcomes of the lag indicators. That’s where UTM’s come in. UTM’s allow you to trace your lag indicators all the way back to the initial lead indicators that generated the result.

UTM’s pass through specific information to help you attribute exactly where traffic came from. Not only do UTM’s help you create accurate source data, they can also contain information such as if it was a paid ad or an organic post that drove the user to your page. They can also contain campaign information, so you can know the effectiveness of your campaigns; they can even help you track your A/B testing efforts within the campaign.

This granularity on the data unleashes the true power of your lead indicators. By knowing exactly what influences your customers to come to you, you can focus on the things that will actually drive the lag indicators, rather than blindly guessing at the most effective use of your time and money.

It all comes down to what works, and tracking is the only way to know what truly works best.

If you want to learn more about UTM’s, their best practices, and how to build them; be sure to check out our course on UTM’s here: https://datarich.thinkific.com/courses/utm-tracking-course

Organifi dashboard data team

How Organifi became data rich

Want to see what’s possible when you turn your data into growth?

We sat down with one of our long-time clients, Organifi, to talk about how their business has changed and grown since they became data rich. Below is the full video of our conversation, as well as some of the highlights:

Your output is only as good as your input.

There is a reason that we say this all of the time; as Louie described, Organifi was using dashboards before they became our client, but their dashboards were just linked to spreadsheets. People updated the spreadsheets on a daily basis (or at least they were supposed to), but their dashboard data relied on human input. We automated out their dashboards, eliminating the possibility of human error, and also guaranteeing the most up-to-date information.

This data has helped them to rapidly scale their business.

How has this data changed the way that they do business?

Organifi can now see the lifetime value of their customers broken out by the channel that they come from, or what they purchased when they became customers of Organifi. This allows the team to determine and adjust their ad spends across different platforms, and better determine which products to push. The best part of all of this? They know that their data is accurate. Since we removed the human element of their tracking, they now have complete confidence in their reporting.

The team at Organifi has daily huddles where they can review the key performance indicators for each of their departments. This reporting in front of the whole company allows for greater transparency across the company. This also increases the accountability of each individual department. As Louie describes in the video, this increased accountability has also led to an increase in friendly competition between the departments, creating a “lift-effect” for the company.

Louie also talked about how the democratization of data allows everyone in the company to feel like their efforts make a difference. Everyone from the C-suite to the entry-level employees sees the same data, and can see how every department contributes.

What data is fun to look at?

Louie’s favorite metric to look at is E-commerce spend vs revenue. This is his favorite because it allows him to see their ROAS in a visual way (as he puts it, the big spike with the little one beneath it).

Everyone has a metric that they love to look at, and a reason that they love it. For most, it generally has to do with revenue, since that impacts everyone in the company; but we want to know, do you have a favorite metric, and why?

Data-driven mistakes even good ecommerce business owners make (and how to avoid them)

Data-driven mistakes even good ecommerce business owners make (and how to avoid them).

Have you struggled with data discrepancies? Had a hard time figuring out what metrics you should actually track? Tried to use a dashboard service and hated it?

If any of those things apply to you, we feel your pain. This video helps to break down some of the most common mistakes that we have run into across the board with multiple ecommerce businesses, and how to avoid and fix them. If you don’t have the time to sit through the video, or don’t have headphones handy, never fear: we have provided a breakdown of the video below.

Mistake #1: Not automating data extraction

  • Most companies have a HUGE issue with this; they have someone assigned to extract data from multiple data aggregates and put it all together in one place.
  • This causes several problems for businesses, the first being the human error side of things; humans make mistakes constantly, and with a task like data aggregation it’s very easy to misplace a decimal point or to switch two numbers around, which may not seem like a huge deal, but if you take action on the insights gleaned from that data it can lead to catastrophe.
  • The second problem is that humans are expensive. Generally the person in charge of this kind of task is a marketer, and their time is much better spent analyzing data rather than aggregating it; marketers find actionable insights from the data, but very rarely do they have the necessary training to clean data and ensure its accuracy.

Mistake #2: Believing that a dashboard is the solution to your data problems

  • Dashboards are excellent tools for data visualization and data aggregation, but they will not solve any issues that you have with the underlying data.
  • The second issue that people often run into with dashboards is actually connecting the data from the various sources to the dashboard. Many of these data visualization companies talk about how easy their technology is to implement, but going back to the first point, you need to understand how to take all of the different data formats and naming conventions and standardize them across the board so that you can actually get actionable data that you can trust.

Mistake #3: Not making your data actionable

  • According to a Google survey 97% of websites collect data from their customers, but less than 30% actually use that data to make decisions in their business.
  • Many companies get so bogged down with metrics and get lost in the weeds of everything that is measured that they lose sight of their actual goals. It is best to narrow the view down to 7 or 8 actionable metrics  to focus on in the near term, i.e. increasing revenue or decreasing costs, and then once you have those under control, you can begin to add new metrics that you want to measure to further optimize the business.
  • The last part of making sure that your data is actionable is making sure that there is someone assigned to each of the core metrics that you decide to measure. That allows the person to focus on that metric, so they know exactly why that metric went up, down, or sideways, and can explain to the team exactly what happened so that you can replicate that behavior again or avoid it in the future.

Mistake #4: Not democratizing data

  • Many organizations have one nerd who analyzes all of the data and then transmits that data to the team, but that nerd doesn’t know what they don’t know. This flows back to the first mistake that many businesses make, by trusting too much in humans who are extremely prone to errors.
  • Everyone has different backgrounds and experience, so when they look at a metric they will see one thing and come up with an action item based off their experience; but if you bring in another set of eyes, that person may see something totally different and come to a different conclusion. Democratizing data and making it accessible to more people will lead to greater insights and more options for ways to proceed.

Mistake #5: Not focusing on the bottom line

  • This is very similar to not making data actionable, but it is very important to cover as well.
  • Determining the right metrics to measure for your business starts with your big goal: driving more revenue. You need to ask yourself, “what are the primary drivers of revenue for my company?”.
  • After you have determined what the primary revenue drivers are for your company, you need to ask the logical questions as to how you can get more from those customers; that may be, “how do I keep them subscribed to my service for longer?” or “How can I increase repeat purchases?” or even “How do I increase the average order size on my site?”.
  • For each of those questions, you can find one metric that will help you to measure the effectiveness of your efforts. By then focusing on that single metric to measure your results, you can experiment to find what works for your customers.

Mistake #6: Worrying about the chicken vs the egg

  • Many business owners think that they don’t need to start truly tracking these key metrics until they already have success to replicate; this could not be further from the truth.
  • Cleaning and tracking data, especially in the early stages, helps you avoid costly mistakes and also helps you expand rapidly. Businesses that track their data early on can outspend and outmaneuver their competition because they know exactly the type of returns to expect from their investment, allowing them to aggressively expand and claim market share.

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