Praxis Metrics- Are you getting the most out of your ecommerce data?

Are you getting the most out of your ecommerce analytics?

What can your data do for you?

Your data may be the most valuable asset in your organization. The question that you need to answer is, “Are you getting the value out of it?”

In our guest appearance on the JetRails podcast, we cover everything from what metrics are actually important to growing ecommerce businesses, to how to make sure that you’re prepared against the upcoming data privacy changes. Check out the episode and our insights below:

What does Praxis Metrics do?

Praxis is an outsourced data team. We specialize in helping businesses gather, store, validate, and visualize their data. As data becomes more and more valuable, we help remove the strain of having to extract that value. Our goal is to help you understand your data in a way that makes it actionable, scalable, and valuable.

Many businesses think that they can’t compete with the big businesses with their “big data”, but as with all things, data intelligence has funneled down to the SMB market. This shift allows any business to take control of their data from inception and use it to rapidly scale.

Why did Praxis start?

Prior to starting Praxis, AJ and Meaghan created a digital marketing agency. They quickly found though that reporting on their marketing efforts was taking more time that actually implementing their strategies. Because of this, they began researching automated solutions to the reporting problem. Once they finally created a solution, they found that more people needed that solution than needed marketing help.

They decided to pivot and become an outsourced data agency, and Praxis Metrics was born.

What is the solution they created?

In creating their automated reporting system, Meaghan and AJ found ways to pull in data from all of the platforms and data silos of a business, allowing businesses to see all of their data gathered and aggregated in one place. A “command center” of sorts. This “command center” helps solve many common issues that ecommerce companies regularly face.

Where does the name “Praxis Metrics” come from?

The term “Praxis” comes from Aristotle’s foundational truths. He believed that there were three main constructs of man: Theory- which is thinking about things, Theoria- which takes the information that you thought about in theory and combining them together to create knowledge, and then there is Praxis- which is the practical application of the knowledge and wisdom that you gained by combining your theories and knowledge together.

Praxis Metrics- Data Maturity Scale

The process of Praxis is simple: data leads to information. Information can be turned into knowledge. Knowledge then transitions into wisdom. And taking action from that wisdom is praxis.

Data never solves a company’s problems. Data simply points out facts. You need to interpret those facts and find the driving force. Once you understand the driving forces, you can take action to impact those forces. Your actions are the only thing that will change your business. The practical application (praxis) of your wisdom will help you scale your business; not your data.

The goal of Praxis Metrics is to give businesses data that they can take action from. We want for everyone to leverage their data into action that helps them grow their business.

Every metric should have an action tied to it. Metrics without action tied to them are just vanity metrics.

How can I take strategic action from my data?

We start every client journey with a process called “metrics mapping”. Metrics mapping allows us to figure out what data you actually need to gather in order to reach praxis.

Pictured below is an example of the process of metrics mapping:

Praxis Metrics- Metrics Mapping

Metrics mapping starts with the goals that your business wants to achieve. In this example, this company wanted to double their revenue year over year. Once you have your goals in mind, you need to start asking the questions that will lead you to that goal. In this case, they need to increase conversions on their website in order to reach their goal. The question that they need to answer is, “how?”.

Once we know the questions that we need answers to, we know the metrics that we need to pull. We’ll begin pulling the metrics that help us answer the question: conversion rates, customer LTV, acquisition costs, and profitability.

From there, we need to find the “source of truth” for each of these metrics. The source of truth is the place where we can find the most accurate data. For financial data, this can be your bank account, Stripe, or Paypal. For traffic data, it could be Google Analytics, or the back end of your website. The point of this stage is to find the most accurate data source to pull from.

The rest of the steps would be carried out with the help of the Praxis team as we help you build out your dashboards.

How do I justify spending money on data?

It’s important to remember that data is an investment, not a cost center. Data recently surpassed oil as the most valuable resource on the planet, so any investment that you make into harvesting, leveraging, and improving your data should return massive dividends if implemented properly.

There’s a reason that data is now recognized as “king”. It has the power to create and destroy massive corporations, swing elections, and generate untold wealth for those who leverage it properly. If you know why something happened and your competitor doesn’t, you can pivot and adjust in order to take advantage of their ignorance.

Taking action from data is the new competitive advantage.

Companies that capitalize on data will scale, those who do not will fail. Speaking about the hurricanes, they mentioned that Walmart and Target were receiving huge shipments of Pop-Tarts, as they know that they are a staple during hurricanes.

Many businesses think that big data is reserved for enterprise-level companies; but tools have gotten cheaper, talent has gotten more affordable, and data has become more plentiful. One of the goals of Praxis is to bring those big, enterprise-level insights down to the SMB market and help them see hockey-stick growth.

Before you begin investing in your data though, it’s important that you know where you should invest your money. That is where the data maturity spectrum comes into play.

What is the data maturity spectrum?

The data maturity spectrum helps you identify where you are, and what your current data priorities should be.

The Foundation Stage-

In the foundation stage, everything revolves around tracking. You can’t analyze data if you don’t have data; so you need to make sure that you gather the data that you need in this stage.

Praxis Metrics- Data maturity stage one

Many companies ignore this step until they’re looking to move to the next stage. Unfortunately, by that time they’ve lost out on all of their historical data. We see many businesses come to us that want to build out amazing dashboards, but we discover that they haven’t tracked the data until this point. That means that they have lost out on years of data that could provide crucial context to the data that they gather from here forward.

Too many businesses want to get started, and push to start selling before they set up their tracking; but they need to realize that you cannot retroactively track. Any changes that you make to your tracking only adds data moving forward, and any data that you missed out on previously is lost.

Revenues do not determine your place on the data maturity scale, the only thing that matters on this scale is how well you handle your data.

What are the questions that you will have in the future?

You need to think on what things you may want to know in the future, and start tracking those things today. It may seem tedious right now, but in the future, it may drive your success.

Typically, the cost of marketing far outweighs the cost of taking the time to track these things. Tracking can inform and optimize your marketing budget, allowing greater success than previously imaginable.

What are the metrics and behaviors that allow for rapid scaling?

Automation-

Phase two of the data maturity spectrum is automation. What compound interest is to your money, automation is to your time.

Automation increases efficiency, accuracy, and profitability of organizations. Automation is one of the primary drivers of rapid scaling and growth.

Customer Lifetime Value-

Understanding the lifetime value of your customers is one of the keys to rapidly scaling. The business that can afford to spend more on their customers will win every time. Understanding the value of your customers over time allows you to predict break-even points and therefore allows you to determine higher acceptable acquisition costs than those who base their spend exclusively off initial order value.

Why do averages suck?

By definition, averages pull in all of your data, the highs and the lows, and gives you one number. You don’t want to base your decisions off just one number though. The 80/20 rule applies to almost everything in life, and business is no exception. An average will hide the 80% of things that do nothing for your business behind the 20% of things that actually drive your results. We want to know what falls into the 20% category so that we can eliminate the 80% scale the 20% that works! Averages keep you growing at a steady pace; we want to deliver explosive, hockey-stick growth.

Too many businesses treat all of their customers the same way; whether they came in and spent a dollar, or a thousand. In order to scale though, you need to invest time and effort into your customers in proportion to the value that they bring to your organization.

Once you know where your most valuable customers come from, and how to properly target them, you can essentially print money for your business.

What should ecommerce companies know about their business?

Ecommerce companies should know what technology stacks they use in their business, and how those technologies handle data.

Amazon is a wonderful example of this. In the last couple of months, they have completely changed their terms of service (ToS) to restrict the data that merchants can access. Amazon collects a vast amount of data on the customers that come to your store and purchase, but they will now only allow you to see certain parts of that data. The worst part is that this is not unique to Amazon. Platforms across the web and world are cracking down on the data that they share with third parties. Because of this, you NEED to know how the companies that you work with handle data.

What should you do to protect against data loss?

You need to make sure that you either own the data completely, or that you have a backup of the data stored off of these platforms. In the podcast, we discuss how these platforms are your “frenemy”. They may seem nice, but the relationship can turn on a dime; so you need a backup plan.

As data becomes more and more scarce and consolidated within platforms, the value of that data will increase dramatically. For that reason, it’s imperative that you take ownership over your data and protect it from outside sources that would limit your access to it.

What sort of subscription metrics should ecommerce companies look at?

We see so many companies come to us and ask what their average subscription length is. As we already discussed, averages are evil.

Instead, we build a chart that shows how many cancellations they have per day. If you have an average, it will tell you that your average subscription length is 60 days; this chart will show you that 30% of your cancellations occurred between day 3 and 7, so you can take action during that time period to reduce that churn.

Everyone wants to increase the average, but the average in and of itself doesn’t help with that. You need granular detail in order to actually make an impact.

What are the next steps?

The first step is to start investing in your data. No matter where you fall on the data maturity spectrum, it’s important to start investing time, energy, or money into advancing your data.

If you need help diagnosing where you fall on the data maturity spectrum, or how to get to the next level, we can help you discover where you fall on the data maturity spectrum, and build a custom data roadmap for your business. Click here to schedule your free appointment.

Praxis Metrics- Data Predictions

Predicting data trends (2018-2020)

For this blog post, we wanted to revisit a guest episode that we did with the Vision Tech Team. This episode was filmed at the end of 2018, and focused on the changes that we saw in the data landscape in 2018, as well as predictions for 2019.

We found this episode particularly relevant given the changes in the data landscape that we detailed in last week’s post (which you can find here).

Enjoy this short podcast episode, and our insights below.

Insights from 2018:

  1. The data landscape changed rapidly, making it very difficult to predict what different platforms would do.
    1. Infusionsoft became much more open with their data in 2018, while Facebook began to clamp down on what data they would allow access to.
  2. Businesses began to understand the value of data, and started to understand it’s importance.
    1. Similar to the dot-com boom, businesses that fail to take advantage of their data started falling behind in the market.
  3. Data overload started coming to a head. Businesses started needing to figure out what data actually drives results.
    1. Trust in data became an issue. Data validation became a necessary part of data projects.
  4. Data visualization became the new buzzword.
    1. Everyone became obsessed with visualizing their data.
    2. This often came at the expense of actually driving new insights, as they would simply slap graphs on the same data.
  5. Automation started to spread
    1. In the beginning, nobody tracked anything.
    2. Then, businesses started tracking, but the data was stuck in silos.
    3. From there, data nerds started creating complex pivot tables and Excel sheets to bring the data together.
    4. Now, automation became feasible, and started taking over. This removed the need for manual reporting, and made the visualizations better.
  6. Going back to data overload, tracking exploded in 2018.
    1. You started being able to track anything that you wanted, and this lead many companies to overload on data.
    2. For those that actually leveraged this data, it caused explosive growth.
  7. Chatbots exploded onto the scene.
    1. Chatbots began to expand their footprint, with very promising results.
  8. Businesses began realizing the value of data democratization.
    1. Rather than having just one data nerd knowing everything about your data, businesses began to share data with all employees.
    2. By opening up data to the entire organization, you can gain insights that you previously would have missed out on.
    3. This allows organizations to leverage the combined brain-power of their entire team, rather than just the select few.

Predictions for 2019:

  1. Increased competition for data.
    1. As more companies realize the value of data, more and more companies will start competing for it.
    2. As data becomes more ubiquitous, companies will get better and better at targeting and marketing. This will drive inefficient organizations into the ground, leaving only the best to survive.
  2. Data overload to the max.
    1. As more data becomes available, businesses will need to start deciding what metrics actually matter to them.
    2. Most businesses will need to hone in on the handful of metrics that actually drive results (80/20).
      1. Those that capitalize on this principle will thrive in 2019
  3. Increased transparency and accountability.
    1. As more companies move towards data democratization, we will see a shift towards increased accountability across organizations. This will create cultures that thrive on extreme accountability.
    2. Since everyone has access to the data, it will become much more difficult for low performers to hide behind the work of others.

Looking back on 2018, things seem so much simpler. They only worried about compliance with GDPR. In 2019, we have a host of regulations on the horizon to worry about, decreased access to data and information, and platforms throttling data.

Looking forward to 2020, we’re likely to see an acceleration of the changes from 2019. We expect more data regulations to come into effect, and as a result of this, we expect a decrease in marketing efficiency.

One of the things that every business should start doing is gathering data into a data warehouse. This protects you from the whims of the larger platforms, and gives you complete ownership over your data. By gathering your knowledge and wisdom into your own database, you insulate yourself from the storm that is brewing on the horizon.

Praxis specializes in data, so we can help you take ownership over your data, create back-ups, and help you understand your data better than ever before. You can learn more about our products and offerings here. If you have immediate questions, you can contact a data expert directly here.

Praxis Metrics- 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/