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/

How to win in the attribution war

How to win in the attribution war

One plus one equals one and a half?

One of the most frustrating aspects of marketing right now is over-attribution when comparing Facebook reports to Google reports.

This occurs when you log into Facebook and it tells you it earned you $100,000 in a period, then Google says it earned you $100,000 in that same period, but you only received $125,000 worth of orders during that same time period.

This, unfortunately, is the new norm in the attribution war. Both Facebook and Google want your advertising money to go to them, so when it comes to tracking and reporting, there are a few things you have to understand:

  • Even though the two platforms integrate with each other, each is entirely separate. They have different goals, definitions, standards, and abilities for tracking.
  • Each platform only owns their own data. That means, when you go into the reporting aspects of Google Ads or Facebook, you will have mathematically biased information. Each platform only sees one variable (their ads) as an impact on your sales. However, there are always multiple variables involved—multi-channel marketing, public relations, organic posts… even the weather and political climate can impact your sales.

So, when you log in and see varying information, they’re not trying to lie, they’re just presenting their side of the story.

Everyone knows that there are three sides to any story. Each person has their version, and then there’s the truth, which is somewhere in the middle. So, when it comes to Facebook and Google reporting, neither is lying, but also neither is showing you the entire picture because they both are inherently biased. Facebook, for example, counts any conversion that has seen an ad on their platform and then converts as a “view-through” conversion; and Google uses last-click attribution by default in their reporting because that favors them.

Then how do I get data that I can trust?

There are two steps to get accurate reporting on your marketing efforts in your systems.

#1: Tracking

Get as much information as possible. Information is simply multiple points of data brought together to allow you to see patterns and gain answers to questions, like:

  • How much overlap do we have in reporting?
  • Are there clients that have been exposed to multiple marketing efforts?
    • If so, are we tying together their customer journey with accurate tracking efforts?
  • What are all the possible impacts on our sales?
    • How have they impacted sales before?
  • Are there correlations?

How are you going to answer these questions to get the insights you desire? You must have the data in order to be able to analyze the data to get insight.

That means, tracking is the first and primary component of accuracy in your reporting:

Are you tracking your client’s journey?

As we discussed earlier, Google uses last-touch attribution to assign credit to conversions. This slants credit towards Google, as by the end of a customer’s journey they tend to be aware of your brand, and therefore more likely to search for your name and click on a search ad or organic search result.

Google Analytics has many attribution models that you can try out to see which one works best for you. From position based (Which assigns 40% of the conversion value to the first and last touch, and then distributes the remaining 20% across all other touch points) to time decay (which assigns credit based off how close to the conversion date it was), it’s important to make a conscious choice of which attribution model you want to use. Each attribution model has its pro’s and con’s, but by staying aware of how the model affects your reporting, you can reduce bias in your reports.

Are you using pixels?

Tracking pixels have exploded in popularity. Many popular advertising platforms now use tracking pixels in order to track conversions and user interactions with the ads. Pixels provide amazing reporting because you can install them almost anywhere, from emails to landing pages, and, as of now, they can’t be disabled by a browser.

Pixels can help you gain greater understanding over how users interact with your advertisements and your website. Providing granular data about user’s behavior based off the platforms that they visit your site from.

Do you have unique identifiers for your clients that allow you to see their customer journey?

Specifically, you need a way to assign a user-id to your clients so that you can track their behaviors across devices. If you don’t have this set up, then when a user changes devices, you will lose all of the data from their initial visit. This can lead to incomplete customer journey’s and skew your attribution data.

Do you have organized UTMs setup?

The very best solution for the attribution problem is to utilize UTMs in all of your marketing efforts. UTMs allow you to tell Google Analytics exactly how you would like to categorize your traffic. Every external link that directs to your site should have UTM parameters appended to them in order to help assign credit to the proper source.  You can even add in campaign data in order to track which of your campaigns drives the best traffic to your site.

UTMs can be one of the most powerful tools available to marketers, or they can be their downfall. UTMs need to be standardized and utilized consistently, or they will make the data even more convoluted and confusing. You need to implement standardized rules for your UTM usage across the organization in order to make sure that your data remains as accurate and clean as possible.

If you don’t already have these things in place, that is your top priority.

By organizing your tracking efforts, you can start gathering the data you will need in the future. If you need help with your tracking, we have a variety of services that can help you get your tracking in order: https://bit.ly/2NtT9kt

#2: Reporting

Once you have tracking in place, you can typically manually create Excel reports that give you a much more accurate depiction of your marketing efforts (including lift effects and other variables). However, over time, that becomes tedious and time consuming and allows for too much human error.

The next logical step is to automate via ETL (extracting, transforming, and loading the information from these systems into a singular place) and then to visualize the combined, clean data with a dashboard.

This enables you to eliminate wasted time, effort, and give you insights in a quick and digestible manner. This process can be very intense and require the help of a data scientist.

Fortunately, we specialize in exactly this type of process and can help you revolutionize your data reporting. If you’d like to learn more about how we can help you with ETL and visualization, visit us here: https://bit.ly/2VYgKZq

Bonus #3: Democratize your data

This one may seem out of the blue, but it can change the way that your entire organization interacts with data.

Democratizing data means providing access to data to everyone in your company. Not just information that pertains to their specific corner of the business, but the business as a whole. We have clients who have walls of TVs dedicated to displaying their data for the entire company. Everyone from entry-level employees to C-suite officers has access to the same data.

You may be asking yourself, “How on earth would that help my business?” Everyone has different backgrounds and experience, so when one person looks 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.

Accountants can be creative, and marketing people can help solve operational issues. Democratizing your data can help you gain a myriad of insights and give you an edge over your competition.

You have tons of data; but data alone will not grow your business. It’s the insights from the data that will inform your team on how to grow. Companies that focus on causation will scale. Those that don’t, will fail.

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/

How to make sure your data is trustworthy

How can I make sure my data is trustworthy?

How much do you trust your data?

When you see information displayed, are you skeptical of it, or do you believe that it is telling you the truth?

Today we wanted to go over why most businesses don’t trust their data, and how to increase your confidence in your data.

Assume nothing

One of the top 5 mistakes that businesses make is assuming that everything is tracking properly. Your output is only as good as your input. If your tracking software isn’t set up properly, then all of the insights that you get from that data are tainted.

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.

If you take anything away from this, do not assume that everything is set up properly, or tracking properly. Make sure that you have an expert set up and validate as much as possible.

People also make the mistake of assuming that once they have Google Analytics set up properly that they can leave it and it will track everything perfectly. Your business is constantly evolving, and your website also is going through constant tweaks, updates, and changes. You need to make sure that everything that you do is tracked in Google Analytics properly, from your goals to your ecommerce, you need to make sure that any changes that you make are reflected in your tracking.

Set up a Data Dictionary

Another big thing that you can do to help increase your trust in your data is to set up a data dictionary for yourself. A data dictionary is a place where you have a source of truth for all of your systems. This will act as a reference point and a description for where that data is generated (Like a phone book for your data). Having a data dictionary helps you know exactly where all of your numbers come from, and it also helps you keep your naming conventions consistent across the board.

Data dictionaries are awesome, but in order to get the most out of them, you need to keep them constantly updated and make them accessible to everyone. Data works best when it is democratized across an organization, rather than in one person’s head or computer. By democratizing the data, you can gain insights and perspectives from everyone across the organization, helping propel your entire company to be more data driven.

Track your data over time

If you want to increase your trust in your data, you need to track it over time. Tracking your data over time lets you pinpoint what works and what doesn’t work with your measurements and reporting. Having a finger on the pulse of your data lets you know when something seems wrong or out of place. This can protect you from making decisions based off bad data.

Do you have a hard time trusting your data? Would you like to have someone check up on your Google Analytics? We perform a 64 point Google Analytics audit to make sure that everything is set up and tracking properly. Contact us here and we can help you trust in your data again.

Chatbot KPI's

4 Fantastic KPI’s that you should be using in your chatbot marketing

How do I measure the effectiveness of my chatbot marketing?

We decided to have a “chat” with the king of Facebook marketing: Curt Maly.

Curt is a social marketing expert, owner of multiple online marketing businesses, consultant and national speaker joins us today with his vast knowledge of all things marketing data related.

What are the benefits of chatbots?

People generally react faster to the notifications from a Facebook message than to notifications about an email. Not every customer responds positively though, most people tend to the extremes in their feelings towards these messages: they either love them or they hate them.

Another benefit of using chatbots in marketing is that they help to automate out customer service. Chatbots essentially create auto-responders within an AI platform, allowing you to dedicate your time and resources elsewhere.

Chatbots also help decrease the necessity of traditional funnels. You can utilize chatbots to move your clients from one point of the traditional funnel to the next without needing to set up traditional stages. Rather than segmenting people into phases like a traditional funnel, chatbots allow you to just have a conversation with the client and naturally progress them through their journey.

How hard is it to set up chatbots?

Just like funnels, you can make chatbots as simple or as complex as you would like. Creating a basic chatbot requires minimal knowledge, and only needs a few options for auto-response. Essentially you just need to think through a standard conversation that happens on a sales call or customer service call, and input the different variables into the chatbot.

KPI #1- Cost per Acquisition

This is the amount of money that it takes for someone to engage with your message. You can find this information by dividing your ad spend across the total number of new messages that you get. Facebook will try to conflate this data with Cost per Reply, but that will give you an inaccurate picture of your actual cost per acquisition.

KPI #2- Cost per Reply

Facebook will track this metric automatically for you. It’s a very important metric to keep top of mind, because it can help you understand the cost of re-engaging a lead that you fell out of contact with.

KPI #3- Cost per Open

This metric matches up nicely to open rates on email, with one difference: most people see at least an 80% “open rate” on Facebook messages. This happens because if someone browses Facebook on their browser, the message will automatically open, inflating the open rate.

KPI #4- Click Through Rate

Click through rates on Facebook messenger generally align very closely with email click through rates. Most people will see between 6-10% click through rates on Facebook messages. Many people mistakenly claim that they get better click through rates through Facebook messenger. In reality, they are generally getting more leads than from email, due to the increased open rate of Facebook messages.

How dashboards can double your revenue

Could you be one smart data-driven decision away from doubling or tripling revenue?

How can data visualization help my business?

Most companies have tried out some sort of data visualization or dashboarding solution. And lots of those companies feel like they have not gotten their money’s worth.

In this video, we sat down with Alex Brown to talk about how to: grow your eCommerce revenue now, increase lifetime customer value, and have accurate data you can trust.

As we discussed in the video, we came up with a refined list of KPIs that every eCommerce company SHOULD have insights into, but most don’t.

We built this “command center” that combines your top of funnel marketing efforts with your entire customer purchasing journey, so that you can see patterns and anomalies otherwise unknown to you, like:

Which marketing efforts are yielding the highest 30, 60 or 90 day LTV?
Which affiliates are bringing you customers who come back and purchase again and again?
What funnels are yielding the highest or lowest customer retention rates?

Knowing the accurate LTV of your customers is crucial for exponentially growing your eCommerce business.

Once you know how much you make per customer and how long it takes you to collect that money from each customer, you can adjust your budget to acquire them.

We had a client that grew from 15 leads per day to 350 leads per day using just this one metric. Check out their story here: https://bit.ly/2DpkdKd

Knowing the LTV of your customers allows you to answer a litany of business questions.

This dashboard gives you the EXACT insights into what your customer is worth at 30, 60, and 90-days. In addition to this, it also answers several other business questions you are probably already asking; but aren’t getting instant answers to, such as:

What variables in my business and my marketing efforts yield higher LTVs?
Does customer LTV change when customers based off their traffic source? Does it change based off what product they purchased first?
Are my marketing efforts increasing my LTVs, or making them worse?
What products are people coming back to purchase after their initial sale?
How many customers are repurchasing from us, and when can I expect that revenue?
Am I speeding up my customer’s journey to purchase? Is it somehow slowing down over time?

Who are my best customers? Where did they come from and what are their purchasing behaviors?
How much revenue am I getting from different products?
How’s this month’s revenue compare to the same month last year, or last month?

This is just one of several pre-built dashboards that we have ready for your business. Our platform integrates with thousands of analytics tools to help you get the most out of your data.

Do you want to learn more about this pre-built LTV revenue and subscription dashboard?
Be sure to watch our more in-depth video and apply to see if you qualify for this awesome dashboard then schedule a call with one of our data experts! https://bit.ly/2Zpwx6o

Improve sales using data

How can I use data to improve my sales?

Do you have more data than you know what to do with?

Most businesses do. In today’s world, everything is tracked, and it produces an overwhelming amount of information. Today, most professionals have a harder time sifting through irrelevant data than they do collecting data.

That’s a problem that we wanted to address in this podcast. We wanted to tackle the question: “Now that I have the data that I want, what do I do with it?”.

It’s not about how much data you have, it’s about asking the right questions and then letting the data tell it’s story.

Time is the most valuable asset that we have, yet we don’t keep very good track of it. Most people go through their days not really thinking about how they spend their time, and not realizing all of the time that they waste in a day. You should spend as much time monitoring your time budget as you do your fiscal budget.

If you want to maximize your effectiveness and happiness, you need to find ways to maximize your time. We all want to increase our productivity and optimize the effectiveness of our time, but eventually we all reach our “optimal level”. At that point, if we want to keep progressing, the only thing left to do is to eliminate waste.

Whether or not we want to admit it to ourselves, wasting time is a huge part of our lives. By decreasing the time that we spend on non-income producing tasks, we can further optimize our time, increasing our time spent on actually valuable tasks. By refusing to track your time as carefully as you track your money, you often lie to yourself. You convince yourself that you spent your time wisely, when in reality, you could have done so much more.

Track your time for 24 hours a day across 2 weeks, and see the story it tells.

Break down your day into 15 minute increments and see exactly how you spent your time across those 2 weeks. Often times it paints a picture that you don’t want to see; but that’s the picture you need to see. By seeing exactly how much time you spend doing things that aren’t worth it, you can see how much more you are capable of.

One client found that they spent only 2.5 hours per day producing actual income for themselves. They spent the rest of the day doing tasks that they considered productive, but on further examination, they found that they had much more pressing things to deal with.

We can automate, delegate, or eliminate so many of the tasks that fill our days; making us more productive, or allowing us the freedom to follow a new passion.

We have data in our CRM’s, data coming from social media, data from our website; how do we sift through it and find the things that actually make a difference?

We found that most small to medium businesses have 15-18 different sources of data. We also found that those sources of data rarely talk to one another. This turns into a huge drain on your effectiveness and time, having to go between all the sources of data to find the information that you need.

The first thing that you need to do in order to get out of the rut of going through all of those disparate pieces of data is a process called metrics mapping. Metrics mapping requires you to start with a high level view of your business and ask the questions that you want answers to. Most people want to know things like, “How much money am I making?” “Which products are driving the most revenue?” “Where am I losing money?”. After asking the questions, it’s time to figure out what metrics, or KPI’s (Key Performance Indicators) answer that question.

After you know what metrics you want to measure, it’s time to find what system tracks that data, and which one you trust the most. If you want to know how much money your business has, your Paypal, Stripe, or bank account is probably a good place to use as where you pull that metric from. If you want to know how many visitors came to your site yesterday, you would probably turn to Google Analytics. Once you have picked out that “source of truth” for each metric, you can begin to track that information and start answering your business questions.

Almost every company has holes in their data, generally because people don’t recognize the value of that data.

Many organizations have problems with incomplete or inaccurate data. There are several potential solutions to this, but the best ones generally are to either automate out the data collection or to train everyone in the organization in the value of the data. Automation represents a long-term and scalable solution to the problem, but it also generally requires a large up-front investment in the technology. For that reason, many businesses would rather just train everyone in their organization on the importance of the data, and how it can actually make a difference for both the individual and the organization over time.

The sales team is the most important team to communicate this to. As one of the first groups that has contact with the clients, they have access to massive amounts of data that often falls by the wayside because they don’t view it as important. Allowing them access to the data and the insights that come from that data is one of the easiest ways to show them the true value of the data that is being collected. If they can see the direct correlation between their data collection efforts and the insights that allow them to make more money, they will never again willingly let data slip through the cracks.

Reward the habits and not the results.

In sales we have lead indicators and lag indicators. The lead indicators are the things that you have complete control over, i.e. contacting x number of leads per day, making x number of cold calls, making at least x number of sales pitches. Lag indicators are the results that follow the lead indicators, i.e. number of sales, amount of revenue, etc. What’s truly powerful about harnessing the power of data is that once you know your lead indicators well enough, you can shift the focus from rewarding lag indicators to rewarding the lead indicators. A system like this allows you to reward the behaviors that drive results, rather than just the results themselves.