Major data privacy changes- What you need to know

The data landscape rapidly changes and shifts, but a flurry of recent announcements will shaken the core of how we measure and track customers.

What is happening?

Basically, until now we’ve been living in the wild west of data, but after a wave of data scandals a new sheriff has come to town. And this sheriff is changing all of the rules. The new priority for data is privacy first, marketers second. These new rules are coming through legislation, and the gods of the internet. We’ll explore what’s happening in both groups, and what happens next.

Legislation

It all started with GDPR, but now consumer data legislation is popping up around the globe. In the US, the California Consumer Privacy Act just officially passed (and will go into effect in 2020); meanwhile, similar regulations are developing in Brazil and India as well.

What do these laws entail?

GDPR

General Data Protection Regulation (GDPR)-

GDPR is a law passed by the EU in 2016, and began enforcement in 2018. The stated goals of the law are to: harmonize data privacy laws across Europe, protect and empower all EU citizens data privacy, and reshape the way organizations across the region approach data privacy. It does this by levying heavy fines against any business that is found in violation of the regulations. This applies to all companies processing the personal data of data subjects residing in the Union, regardless of the company’s location.

California Consumer Privacy Act (CCPA)-

The CCPA will allow consumers to force companies to tell them what personal information they have collected. It also lets consumers force companies to delete that data or to forbid them from sharing it with third parties. This law aims to target larger businesses, and only applies to businesses that earn more than $25 million in gross revenue, businesses with data on more than 50,000 consumers, or firms that make more than 50% of their revenue selling consumer data (I.E. data brokers).

While this law only applies to customers who live in the state of California, 17 other states are currently exploring similar legislation. It’s likely that most companies will just adopt these practices across the board.

Corporate regulation

Apple

Safari Privacy Update

Apple has changed how it handles personal data, with it’s ITP (Intelligent Tracking Prevention) framework in Safari. Third-party JavaScript cookie lifespans are now capped at seven days on all Safari browsers. This new, limited lifespan breaks traditional remarketing efforts and attribution models.

Both Google Analytics and Adobe Analytics use a default 30-day conversion window, allowing you to see the impact of every touch that impacted a conversion in that time frame. Those attribution models on Safari browsers will now only collect data on the last seven days prior to conversion, deleting any data collected before that point.

For remarketing, marketers now only have seven days to programmatically target Safari visitors. After that, their data will be deleted, along with the ability to retarget them.

Other effects from this change include: cross-device visitor tracking becoming unreliable, and a dramatic uptick in unique visitor counts. Visitors who span multiple devices and have a buying journey more than seven days will look like new visitors when they finally return, skewing the data. Additionally, since they now look like new visitors every seven days, new visitor counts will skyrocket.

Firefox Privacy Regulations

Mozilla

Mozilla rolled out similar features to its popular internet browser, Firefox, earlier this year. They recently rolled out an “Enhanced Tracking Protection” feature, which blocks all third-party cookies by default. They also began blocking over 2,500 tracking domains, many of which control multiple cookies, and plan to “update and improve this list over time”.

Chrome Privacy Update

Google

Chrome will add a browser extension that will showcase the names of the AdTech providers on each page and the personalization factors associated with each cookie. They also plan to provide user-level cookie control for third-party cookies.

What can we do?

First party cookies

Moving from third-party tracking cookies to first-party cookies will help protect against these updates and changes.

Most of the changes implemented by the tech companies target third-party cookies, but none of them target first-party cookies yet. This allows you to continue tracking your customer journey without interference.

This change also provides a number of fringe benefits, including: ownership of the data, reduced likelihood of blocking, and better storage and utilization opportunities.

Owning your data insulates you from changes or updates to any future terms and conditions. It also allows you to store the data indefinitely.

In order to implement this, you’ll need to develop the cookies and have a data-warehouse to store the information collected.

It should be noted with this solution that since you own the data, you assume 100% responsibility for it. This includes compliance with the privacy laws previously discussed, as well as the protection of the data.

Pixels

Tracking pixels have managed to avoid much scrutiny yet, and therefore they have escaped the proverbial regulatory hammer so far.

Pixels transmit their data directly to a server, rather than storing data in the browser. This makes the pixel extremely useful, as the user cannot delete the data by clearing their cache.

As regulation ramps up, we predict that most tracking will transition from cookies to pixels, and the data produced by these pixels will move to large data-warehouses for storage. Similar to a first-party cookie, the data gathered from pixels will become the responsibility of the pixel owner.

What comes next?

It is clear that the old way of collecting data is officially dead. Privacy and consumer protections are here to stay.

The solutions that we presented here only serve to fix the issues created by these updates to browsers, they will not help avoid any of the new legal regulations. The internet is entering a new age, and every company will have to grow and adapt to this new ecosystem.

If you’re freaked out by all of the changes hitting the data landscape, we can help. We offer complimentary data strategy sessions with a data expert who can walk you through these changes, and what your organization can do to prepare for the future.

How to monetize your data

How to monetize your data

The most valuable commodity on earth

Data recently surpassed oil as the most valuable commodity in the world. The question that we need to ask ourselves is “Why?”; why is data so valuable, and are we making sure that we are getting the maximum value out of our data.

Why is data so valuable?

Data in itself is not particularly valuable. Data is simply a single point of information. The value of data is the actions that you are able to take a a result of the data.

Data Maturity Spectrum
As an example of this, knowing that it is raining does nothing for you in itself. It is simply a point of data. When you begin to merge related points of data together, you get information. By extrapolating your information into patterns, you get knowledge.

Data, information, and knowledge are all powerful tools, but they only help you understand things in hindsight. Taking that knowledge of patterns and using it as a model for the future allows you to gain wisdom. But that wisdom in itself does nothing for you without taking action from it, which is Praxis, or the practical application of wisdom.

Data Maturity Spectrum Example

Data is like a race car. It has limitless potential, but it requires you to put fuel into it before it realizes it’s value. Data requires analysis and action in order to create any value for your company. This brings us to the question of:

How do I make sure that I’m maximizing the value of my data?

There are two ways to make sure that you are getting value out of your data, internal monetization and external monetization.

Internal Monetization

Internal monetization refers to utilizing your data to glean insights to help your company. This can be things like improving your marketing efforts, managing customer experience, or management of your supply chain and equipment maintenance.

Most companies use the internal monetization of data to identify areas of inefficiency. Our client, Digital Marketer, was one of these. We helped them discover a structural issue with their site that was causing a huge SEO issue for them. Upon discovering the issue, they implemented a fix and saw a 50% increase in their traffic. You can read more about that story here: https://praxismetrics.com/success-stories/digitalmarketer/

Another way to monetize internally is to leverage data to expand your product and service offerings. Our client, Danette May, found themselves in a similar position to this. They had been trying to expand a funnel that they had built to offer it to more clients, but they found that they couldn’t increase their ad spend to reach this new market and maintain profitability on the product. They were about to abandon this idea when they came to Praxis to try to figure out what their lifetime customer value was; we helped them discover that their LTV for that funnel was much higher than they initially thought. This allowed them to increase their allowable cost per acquisition by $5, which caused them to experience explosive growth, and now that funnel brings in millions in revenue per year. You can read more about their story here: https://praxismetrics.com/success-stories/danette-may/

External Monetization

Another way to take advantage of your data is to monetize it externally. This can include selling the data that you have on your customers, creating mutually beneficial partnerships with other data-driven firms, and creating new subsidiaries or divisions within your company to take advantage of insights that you have gained. Selling and trading data with other companies is growing more challenging, as data rules and regulations are becoming much stricter across the globe, but these type of partnerships can be extremely lucrative for both parties if done properly.

How can I start monetizing my data?

The most important thing that you need to do before trying to monetize your data is to make sure that your data is accurate and “clean”. Attempting to make decisions off of bad data is like trying to drive that race car, but with a filthy windshield that you can’t see through.

Metrics Mapping

Once you have confidence in your data, the next thing you need to do is start to figure out what numbers are actually important to you an your business. We recommend a process called “Metrics Mapping”. Metrics Mapping helps you to understand exactly what you should be tracking, and what actions you should be taking based off of your numbers.

Metrics Mapping starts with determining your business goals and objectives. So if your goal is to double your revenue by 2021, then what questions do you need answered in order to get there? An example question would be “How do we increase the revenue from our website?”. From there, you can determine the metrics that would help answer that question. “How many conversions are we getting per day/month?” “What is our average order value?” “What are our repurchase rates?” “Where do we get our highest converting traffic?” would all be good questions that can help lead you to the metrics that you need to be tracking.

Metrics Mapping Process

Once you know what you want to track, the next step is to figure out where your “source of truth” is for each of these metrics. Revenue per day/month should be tracked by your accounts (Paypal, Stripe, bank), average order value should be tracked through your sales system, highest converting traffic can be found in Google Analytics, etc. Once you have your “source of truth” selected for each of the metrics that you need to track, you know where you need to check in to see your progress.

Once you know your metrics and where they live, you need to assign someone to manage them. Even if it’s yourself, it’s critical that someone be specifically responsible for these metrics. This person needs to keep an eye on the metrics and know exactly what’s going on with them at any given time. Whether improving or worsening, this person should be aware of why they’re changing.

Dashboarding

Once you have your metrics mapped out, the next thing that you should do is start aggregating and visualizing your data in business intelligence dashboards. These dashboards will help you track your important metrics over time, and at a glance.

At Praxis, we prefer dashboards that go beyond just simple visualizations. We build dashboards that merge multiple sources of data in order to create new, reliable data sets. Our dashboards perform complex analysis and calculations to help you not only understand what has happened in your business, but also help you shape the future of your company.

We’ve built everything from “command centers” where executives and investors can log in to see all of the key metrics that they need, to drill-downs that allow you to see the performance of each of your ads. Through our experience creating these dashboards for our many clients, we have perfected their creation and roll-out. We have more information about these dashboards and what they can do for your business here: https://praxismetrics.com/dashboards/ltv-dashboards/

Next Steps

This article contains a roadmap for data monetization. This may seem overwhelming, but we can help you wherever you are in your journey. We offer services for tracking, dashboarding, and even metrics mapping. All you need to do is follow this link to schedule a call to get a personalized data roadmap for your company from a data expert: https://praxismetrics.com/strategy/schedule/

Biggest Dashboard Mistakes (And how to avoid them)

The biggest mistakes when it comes to dashboards and how to avoid them

Why does everyone seem to be pushing dashboards right now?

Dashboards seem like the new “it” thing right now in business. Everyone seems to want them if they don’t already have them. But what are the benefits to having dashboards, and what are the most common drawbacks?

We answer these questions, and more, in our guest appearance on the Less Doing Podcast with Ari Meisel, featured here:

What is the biggest mistake that people make with dashboards?

The biggest mistake that people make with dashboards is making the assumption that visualizing the data through a dashboard will magically give them insights. Dashboards help you visualize your data, which can help you to understand your data better, but it’s not going to help you track something new. Many people see beautiful dashboards and they assume that it must be a good dashboard, but the underlying data is much more important than how it’s displayed.

What most people are looking for is not just a data visualization tool, but a business intelligence tool. A business intelligence tool allows you to pull all of your data together in one place, and allows you to see the relationships between what may seem like disparate metrics and systems. By utilizing a business intelligence tool, you can gain new insights from your data and decide how to take action from those new insights.

A lot of businesses use their dashboards only to display what we call “vanity metrics”. They can easily find these metrics elsewhere, and they don’t necessarily deliver insights. Businesses need to use their dashboards to visualize the relationships between different data. Sometimes, it doesn’t even have to be visualized… We have lots of clients that just want to see their numbers all aggregated together in one place. The most important thing is that you can take action from the data that you see. These systems need to give you new, unique insights into your data, or they have wasted your money.

What is your plan?

Your dashboards need to give you insights. The question that people ask next is “What do I do with those insights?”. You need to have a plan in place so that you know exactly what will happen when something changes, or you realize something new. At Praxis, we don’t build a metric unless there is an action tied to that metric. The visual part of the dashboard doesn’t actually matter that much, what matters is that the person who is in charge of that metric can understand what is happening with that metric, and what needs to happen.

We have had clients come to us asking for metrics, and once we have built it out, the client then asked “What now?”. They had no idea why they needed to track that metric, or what actions they needed to take off it, they had just heard other people talking about it and wanted to be ‘in the know’.

Before you start tracking something, you need to have a plan in place as to what you hope to accomplish with that metric. You need to know exactly who takes responsibility for that metric, and what action steps you will take based off that metric. Once you have a plan in place, you will actually see value delivered from your dashboards and analytics.

What are the core metrics that almost every business should track?

LTV-

Every business NEEDS to know the lifetime value of their customers. But they need to know more than just the LTV, they need to know what impacts it as well. It’s important for every business to break out their LTV as much as possible and make it as granular as possible. Your LTV can vary based off the first product they purchased, what platform referred them to you, and even what ad they clicked on. The aggregate LTV isn’t enough, you need to know the granular specifics of the things that impact it.

By understanding the specifics of what impacts your LTV, you can fine-tune how you interact with your customers and drive that number higher. The goal of this metric is not to know it, but to drive it higher.

ROAS/ROI-

Most businesses know this number, but they also need to know their acquisition cost by channel. This will allow you to see how each channel performs individually and see which channel is worthy of your ad spend.

In order to unlock the full potential of this metric though, you need to overlay your acquisition costs with your cost of goods sold, and customer lifetime value. When you put these metrics side-by-side, that will give you the formula for your allowable acquisition cost. This formula becomes one of the most powerful assets that a business can have if utilized properly. We have had clients grow more than 3000% once they have these numbers figured out.

Month over month/ year over year revenues-

While most businesses track this, few businesses take the time to analyze the effects of seasonality on their customers. Even fewer businesses look at their revenue by source. One of the best things that you can do as a business is figure out which platforms perform the best during different seasonal shifts. Should you spend more on Instagram advertising during the summer, or the winter? These insights can help businesses rapidly scale, and can make the difference between breaking out into success and dying off.

At what point does a business have enough data to start tracking these things?

Everyone thinks that only enterprise-level companies can leverage ‘big data’, or that they haven’t reached a level of sophistication to need that type of granularity; but in today’s marketplace, everyone has ‘big data’. Our phones alone contain unbelievable amounts of data about us, every website tracks a multitude of variables on their visitors. The main difference between an enterprise level company and a start-up is that the enterprise level company recognizes that they need to capitalize on their data in order to succeed, while many start-ups fail to recognize it’s importance.

Small businesses use, on average, 8 different technology platforms. Each of those platforms has their own way of tracking data and keeps a small portion of your data hidden away within their platform. The trick is to get all of those disparate systems to talk to one another, or at very least pass all of that data in to your dashboard so that you can analyze the relationships between them and gain greater insights.

Honestly, the best time to start tracking is as soon as you begin operating as a business. The next best time is right now. Tracking your data properly can transform your business in ways that you would not believe.

No business suffers from a lack of data, generally they just don’t know what data to focus on, and what will actually make a difference for their business.

How can I maximize the net benefit from tracking and dashboards?

The most important lesson that you can gain here is that your output is only as good as your input. The first thing that you can do in order to maximize your results is make sure that you have standard operating procedures (SOPs) in place. Because of the tedious nature of this work, many businesses overlook it or neglect it; but the best businesses don’t.

Many employees drag their feet when it comes to SOPs, they think that it doesn’t add enough value to be worth their time. One of the best ways to help them get past this thinking is to show them what’s possible when they utilize them vs what they lose by not utilizing them properly.

Lots of businesses ask, whether they should start with their tracking and make sure that they have done a good job with their tracking, or if they should start with dashboards and visualization. Either one works. If you start with visualization, that can help you to see exactly where you need to improve your tracking. If you start with tracking, then when you move on to visualization, you can have confidence in your data, knowing that it’s accurate.

What can companies do to prepare themselves to work with dashboards or data analysis?

Every company should know what questions they want answered before they ever start working with dashboards and data analysis. Go beyond buzzwords and jargon and really figure out what questions you have that you need answers to in order to progress your business. So start with your company’s goals, and then ask yourself what you need to know in order to achieve those goals. From there, you can drill down and begin to look at the metrics and numbers that contain the answers to those questions.

Once you know the numbers that you need to be pulling, you need to validate your data and make sure that everything tracks properly. Most companies struggle with their Google Analytics reporting, and their use of UTMs. If you struggle with either of these, we can help. For Google Analytics issues, we have an Analytics audit that will run through your entire Google Analytics account and pinpoint issues for you. You can find more on that service here: https://praxismetrics.com/google-analytics-audit/

If you’re struggling with the use of UTMs, or have no idea what they even are, we can also help. We have a course that will take you from UTM zero to hero in less than a day. You can find more information on that here: https://praxismetrics.com/utm-foundations-course/

Once you have your tracking in order, and you know what questions you’re answering with that tracking, it’s time to organize your objectives by feasibility and value. We like to map the objectives across quadrants: high feasibility, high value; high feasibility, low value; low feasibility, high value; low feasibility, low value. Obviously, we want to work through these from highest feasibility and value to lowest feasibility and value.

How can we better track and prevent customer churn?

The first thing that you want to track with customer churn is by source. You need to know which of your traffic sources produces the lowest value customers (those with the highest churn), so that you can pinpoint the issue. Do you need to better explain your offerings on that platform, do you need better qualifications on clients that come from that source?

We also want to analyze retention rates over time, and by cohort. This allows us to see trends over time that increased or decreased churn rates. This helps tremendously in measuring the effectiveness of marketing campaigns and the actual impact that they have on your overall business.

For subscription based businesses, most of them already track the days to cancellation; but they primarily track the average. The problem is that averages are inherently evil. Averages tell us a line from a story, but we need to know the entire story in order to truly understand. In order to know truly when you need to act, you need to know a lot more than an average. You need to know the days that people are most likely to cancel, so that you can update your nurturing sequences in order to reach those people before they leave.

How can I be more effective?

Collaboration-

Too many people isolate departments, data, and communication in their organizations. By democratizing data and decision-making processes, you can take full advantage of the expertise of all of the unique people on your team. The more eyes that you can have on a problem, the more unique perspectives you can gain, and the more solutions you can come up with.

Tracking-

In order to progress your business, you need to be able to pinpoint what worked and didn’t work. If you’re not tracking everything you do, it’s infinitely harder to replicate success and eliminate waste.

Automation-

Too many people spend too much time doing menial tasks. We’ve seen executives spending all of their time pulling reports and data together, rather than analyzing it for insights. Automation may have a high up-front investment, but it pays massively over time. It saves companies thousands of dollars in man-hours, plus all of the human error that goes into the reporting.

If you find yourself struggling with any of those issues, we can help!

We have a myriad of resources here on the blog, but if you’d like more help with your tracking and getting that set up, visit us here: https://praxismetrics.com/google-analytics-audit/

If you need help with automation or visualization, please visit us here: https://praxismetrics.com/dashboards/ltv-dashboards/

And lastly, if you just want to talk to someone about your needs, drop us a line here: https://praxismetrics.com/talk-to-a-data-expert/

LTV business scaling

What is customer lifetime value, and how does it impact my business?

What does LTV mean, and how does it impact my business?

LTV stands for customer lifetime value, and measuring it can revolutionize your business.

Most businesses determine their ad spend based off their return on investment from said ad spend. Unfortunately though, many people calculate the return on ad spend (ROAS) exclusively based off the initial order value. If you calculate your ROAS exclusively based off initial purchase value, you are most likely missing out on explosive growth, just like our client Danette May. See the video below to hear more about their story:

As you can see from that video, knowing the true lifetime value of their customers made all of the difference for them. They couldn’t scale that funnel reliably without increasing their budget; but they thought that they couldn’t increase the budget on the funnel and still have an allowable ROAS. They had made all of these calculations based off the initial order value though. By widening their scope and tracking the lifetime value of those customers, they realized that they could still get an allowable ROAS even if they increased their budget.

Upon increasing their ad spend, they were able to scale up that funnel tremendously and they went from 15 sales per day to over 200 sales per day in less than a month. Since this video was recorded, they went as high as 600 sales per day and are now averaging about 300 sales per day. That is the power of knowing your true customer lifetime value.

How does LTV impact finance?

While LTV in and of itself can completely change the way that you view customer journey’s and their acquisition costs, the true power of customer LTV comes when you combine it with a few other metrics. Once you know the true value of your customers, the next thing that you need to know is the true cost of goods sold on what you sell. To get the true cost of goods sold for your products, you need to roll in everything, legitimately everything. You need to break down the cost of every employee, all of your overhead, every cost that your business has needs to be tied into this metric.

Once you know the true LTV of your clients, and your true cost of goods sold (COGS), you can now start to look at how much money you make off each client and each product that you sell. You may find that on some funnels you’re not profitable off the initial purchase, but that the clients come back and repurchase multiple times over several months, making that customer profitable overall. From there, the finance team can determine acceptable timetables for profitability. Some businesses have funnels that they know will not turn a profit for several months, but they know that it will be profitable within a certain acceptable time frame for them as well.

Once you know the acceptable profitability time frame, you can begin to work out an acceptable cost per acquisition, which leads us into our next section:

How does LTV impact marketing?

Now that you know the path to profitability and the timeline for it; you can begin to look at how much you can acceptably spend on advertising costs. By studying your cost per acquisition (CPA), you can understand how much ad spend you will need in order to get one person to convert. From there, you can rework this into your established cost of goods sold, and look at your timeline for profitability. We recommend that you find the absolute maximum allowable CPA, and then make sure that you stay underneath that threshold.

The next step in your journey is to get even more granular in how you measure your customer lifetime value. Since your allowable acquisition cost is based off the lifetime value of your clients, it makes sense to break out the lifetime value based off where they came from as well.

In this next video, we show you exactly what that looks like.

As shown in the video, clients who come from different referral sources behave differently. They may be interested in different things based off the type of content that drove them to your site. This will affect the items that they buy, and in turn, their lifetime value as your customer. You can also take this analysis even further by segmenting your customer LTV based off the initial item that they purchased.

How can I start tracking the LTV of my customers?

The hardest part of finding the true LTV of your customers is extracting all of the data from all of the disparate systems. The average small business uses at least nine different systems to track different things, though many have more than that. In order to get a clear picture on the true LTV of all of your customers, you need to gather all of that data. This is a tedious, difficult process known as ETL (Extract, Transform, Load).

The first step of ETL is data extraction. It takes a lot of time to extract data from all of the disparate systems, but it’s rather simple to do. From there, you need to make sure that all of the data meshes together properly. This leads us into the transformation stage.

Transforming data requires a lot of time and mental energy to complete. Each system tracks things differently, so you have to go through and realign the data to make sure that it matches properly between the different tracking systems.

The last stage is the simplest stage and, generally speaking, the one that everyone jumps to. The load stage consists of taking your new, clean data and loading it into a visualization tool so that you can see all of the information that you have gathered in one place.

Many people jump straight to the load phase and get a data visualization tool without having the previous two steps, and that leaves them with a pretty dashboard that doesn’t tell them anything new. The process of ETL is VITAL for you to find your true LTV and of paramount importance for you to propel your business forward.

If you need help with this, we have helped countless businesses go through this process. Simply fill out this form, and we can talk about the unique needs of your business and how we can help you turn your data into growth: https://praxismetrics.com/talk-to-a-data-expert/

Financial Marketing Summit

Financial Marketing Summit Keynote Speech

Data is a lot like teenage sex-

Everyone talks about it, but nobody really knows how to do it. Everyone thinks that everybody else is doing it though, so they pretend that they are doing it too.

– Dan Ariely

 

Now that we have your attention, we can get into the meat of the content. This lecture was initially presented to a group of financial marketers, but it’s applicable to businesses in any sector.

Why do I need to know the lifetime value of my customers?

Lifetime Value (LTV) may be one of the most important metrics that a business can measure. Everything from cash-flow to ad spend relies almost exclusively on this number. If you know the lifetime value of your customers by source, and you know the amount of margin that you need to make off that customer, then finding the maximum acceptable Cost per Acquisition (CPA) is a simple equation. Likewise, with cash-flow calculations. If you know when customers who purchase item A will likely return to purchase item B, then you can forecast your revenues pretty accurately.

Our client Danette May has the perfect example of these pieces coming together. They had a funnel that wasn’t converting to the level that they needed it to, and they were about to cut it. They came to Praxis Metrics to find out what their average LTV was for customers who came through the funnel. We supplied them with that data, and armed with that new information, they found that they could afford to spend more on acquiring those customers than they previously thought.

By increasing their acceptable CPA by just $5, they increased from 15 sales per day to 350 sales per day within two weeks. The trend continued upward to hit 615 units per day off this single funnel. With an average value per order of roughly $97, they now make more than $30,000 per day in sales. Across the year this funnel alone accounts for more than $10,000,000. If you would like to hear more about their story, you can see more of what they have to say here: https://praxismetrics.com/success-stories/danette-may/

How can you get a leg up in your business?

There is more noise and competition for clients than ever before. Anyone with a laptop and an internet connection can now start a business and possibly disrupt entire industries. How do you compete in a landscape like this? Information.

Information is at the heart of most of the problems faced by businesses today. Either you wander around blindly because you have too little information; or you have too much information stored in information silos. These silos may contain valuable insights, but since they don’t communicate with the other systems, you have to rely on humans to extract the valuable information and make it usable.

Taking action from data is the new competitive advantage.

The only difference between a successful online marketer and a failure is that the successful marketer knows why they were successful and can replicate that success.

Data does not solve problems.

Data is never the solution to a problem. Data merely guides you to information. Information leads to knowledge. Knowledge transforms into wisdom, and wisdom when applied to your actions, creates Praxis.

The major dividing line in this system is the transition from knowledge to wisdom. Everything that comes before wisdom is based off past observations, and makes no statements on the future. Wisdom allows you to make predictions about things to come. Praxis requires taking those predictions and then doing something about it to better your life.

Not taking action from data is like owning a race car, but then never putting fuel into it.

Data contains the what. Information tells you the when or the where. Knowledge teaches you how. Wisdom guides you to why. Praxis is the actions that you take based off the data, information, knowledge, and wisdom that you gain.

Where do I begin?

Your outputs are only as good as your inputs.

Therefore, you need to begin by tracking your data. This forms the base of everything that you build later, so you need to make sure that your tracking is in order.

Meaghan and AJ provide a personal example of taking data all the way through Praxis beginning at 19:10 if you are interested in hearing more about that.

The initial phase of your journey is all about getting clean, accurate data. The number one mistake that small to medium businesses make is that they are not using UTM’s in all of their marketing efforts, and they don’t have their Google Analytics set up properly.

What the devil is a UTM, and why does it matter?

You can track your marketing campaigns uniformly across most analytics tools utilizing UTM parameters. UTMs work with Google Analytics and many other tracking tools.

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

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

A UTM has five variants of URL parameters used by marketers to track the effectiveness of online marketing campaigns across traffic sources and publishing media. UTMs contain an encoded suffix that you append to a URL (A URL being a website link). The suffix is generally 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.

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. We have written several blog posts on the subject matter, which can help you understand them much better. You can read more of those here: How to increase revenue with one simple tweak, and here: 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/

After UTM’s, what’s next?

Once you have control of your UTM parameters, you need to start a process called Metrics Mapping. Metrics Mapping allows you to gain clarity on what metrics you should track, and what those metrics do for your business.

Metrics Mapping starts with your business goals. You need to know where you want to go before you can create a map to get there.

From there, you need to figure out what questions you have to answer in order to accomplish that goal. You could ask questions like, “Where do my sales come from?”, or “How many sales have I averaged over the last 30 days?”.

Once you have the questions that you need to answer, you need to find the metrics that answer those questions for you. You need to hunt down where the most accurate information on the topic lives, and then work to connect all of the most accurate data sources together.

Once we have pulled all of the data together, you have to validate the data to make sure that it is accurate.

After you have all of your accurate data in one place, you can apply formulas and filters to make sure that it’s showing you just what you’re looking for, and then it’s time to plug that data into a data-visualization tool.

OK, I am done with tracking, everything looks good. What now?

Congratulations on making it through the tracking stage! You’re now ready to move into the fun stage: automation.

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

Automation takes your business to the next level, it allows you to scale your business in ways that most people don’t even imagine. By removing manual reporting and human errors, you not only save your company money, but time. Automation allows you to free up some of the smartest people in your organization to do what they do best rather than fetching data and compiling reports.

The automation stage allows your team to no longer have to look at raw data, but now they can look at actionable KPI’s that they can easily glean insights from. The automation stage rapidly progresses people out of the information and knowledge stages and allows you to begin to focus on the wisdom and Praxis stages exclusively. That is one of the primary reasons that companies who get to this point are able to rapidly scale and expand their business.

Businesses that reach automation can focus on what they do best and let machines do the rest.

That covers the first two steps of data maturity.

The action steps that you need to take in order to get past these stages are:

  1. Start tracking now
  2. Organize your tracking
  3. Map out your most valuable KPI’s
  4. Begin to track those KPI’s
  5. Automate as much as possible.

If you would like to see more of the path of data maturity, be sure to check out our presentation of the entire process of data maturity here: https://praxismetrics.com/blog/data-rich/how-to-scale-in-the-modern-business-landscape/

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.

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.

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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