How ecommerce companies can turn data into growth

How ecommerce companies can turn data into growth

Meaghan and AJ were invited to speak with Alex Brown, founder of Ecommerce Rockstars. They cover everything from data foundations to predictive analytics, so don’t miss out! Check out the full interview and our insights below:

Data shouldn’t be scary

When businesses think about data, most of them think of massive data warehouses with AI and machine learning algorithms. While that may be something to strive for, that’s not data. Data is simply information. Every business has information; now more than ever.

Praxis wants to help businesses find ways to leverage the data that they already have to make better decisions. We always say that we’re in the waste business. We help eliminate wasted time, effort, and money.

The goal of any data project should be to answer your business questions. We want to help businesses answer the questions that will help them scale. Whether your ecommerce business is just getting started, or if you’ve been in business for a few years; this can help you figure out what next steps to take and how to grow your company.

The roadmap to data mastery

While the end goal may be to run massive data projects and collect granular data on every customer’s spending habits; we need to start at the beginning. The more information you have, the better decisions you can make; that means that the less data you have, the worse decisions you make.

That’s why Praxis built out the data maturity spectrum, to help businesses figure out where they stand, and then what to do next.

The data infancy stage

Most companies start in data infancy. They don’t have time or means to dedicate to data and analytics projects; so they put it off. We characterize this stage with a general “spray and pray” type of attitude. Businesses in this stage generally are just throwing ideas at the wall in order to see what sticks.

As they start to see what sticks, and what works and doesn’t work; they begin to lay the foundation for their data strategy. This moves them into the data foundation stage.

The data foundation stage

As businesses start to gather reports and notice patterns, they start to grow their data maturity. In the foundation phase, businesses start to track the cause and effects of their actions. Generally this involves manual reporting, pulling data from disparate sources into spreadsheets, and using complicated pivot tables to analyze the data.

We call this stage “spreadsheet hell”. Businesses in this stage generally have some automations when it comes to their reporting; but they often rely heavily on human input and data aggregation.

The data foundation stage is generally the phase in which businesses start to see explosive growth. Because they track what works and doesn’t work, they’re able to start replicating efforts and successes. In order to continue growing at the same rate, they’ll need to move up the scale of data maturity to the data optimization stage.

The data optimization stage

In the data optimization stage, businesses focus on automation. During this stage, businesses move away from manual reporting and begin to create automatic ETL processes. ETL stands for Extract, Transform, and Load. The idea behind this process is to extract the data from the different “sources of truth”. The source of truth is the place where the most accurate data on whatever you want to measure lives. For example, in the case of financial data, the source of truth would be your payment processor or bank account. For Source/Medium data, the best place to get that data would be Google Analytics.

Next, we need to transform the data as needed. Transformation of the data entails taking all of the data from your disparate sources, joining it and then cleaning it to make sure that it’s all tracking uniformly and the data is formatted properly.

From there, we load the data into a data visualization tool so that you can easily analyze and leverage your data into growth.

The end goal

The end goal of this entire process is getting you data that you can take action on. Data for the sake of data won’t do anything for your business; you need to take action from it. Having data and not taking action from it is like having an expensive race car and then never putting gas in it.

Going with the race car analogy, if you want the car to perform optimally, you need to put only the highest quality gasoline in the car. Your output is only as good as your inputs. The same is true with data; in order to get amazing insights from your data, you need to have clean data coming into your systems.

If you don’t know how to make sure that everything tracks properly, we recommend using a process called “Metrics Mapping”.

Metrics Mapping

The process of metrics mapping is actually pretty simple, and helps you gain clarity in what you need to track and how to use the data once you have it.

You start metrics mapping by defining your goals. As you can see in the example below, this company wanted to double their revenue year over year.

Metrics Mapping

From there, you need to figure out what questions you need answered in order to attain that goal. In this case, they need to know how to increase the conversions on their website.

Once you know the questions that you need to answer, it’s time to figure out what metrics can help you answer those questions. In this case, they decided that the metrics that would help them the most would be the conversion rates for each of their funnel stages, customer LTV, allowable CPAs, and channel profitability.

From there, you need to decide on a source of truth for each of those metrics. You can find funnel stage conversion rates through Google Analytics goals, enhanced ecommerce tracking, or event tracking. Lifetime values would be through your ecommerce platform. You would need to calculate allowable CPAs for your business based off your margins, COGS, and LTV. And finally, you can find channel profitability by tracking your CPAs, LTV, and COGS.

From there, you want to validate the data across as many sources as possible and make sure that your sources of truth align. Then you can begin the process of applying your calculations and loading it into a data visualization tool.

If you’re not able to track any of these metrics, then you can know exactly where you need to focus your tracking and figure out a platform that will help you track those metrics.

Lead with revenue

Every data project should help you make more money. If you’re running a data project to get a metric that is “nice to have” or “nice to know” then you’re likely wasting your time, energy, and money.

As we talked about before, you need an action tied to your data. If something changes, you need to know what you’ll do, and who will do it. Once you have action tied to metrics, it becomes much easier to determine the value of that metric. For example, if you can get a 10% increase in the lifetime value of your customers, you can easily calculate out the value of that kind of change for your business.

The key when determining KPIs is figuring out which ones are the most feasible and deliver the maximum impact. As shown in the chart below, we want to focus on the things that drive the highest business value and are the easiest things to implement for your business.

The key is to make sure that you don’t work on data projects just because you can. Those belong in the bottom right quadrant and should be treated as the second to lowest priority for the organization.

Praxis Metrics Feasibility Quadrant

The beauty of this chart and this process is that as you implement your data projects and improve your data processes, you can increase the feasibility of future projects.

The big data secret

The biggest secret when it comes to data projects is that no matter the size of the company, everyone wants the same information. They want to know how to decrease their waste and increase their bottom line. The easiest way to do that is to ask the right questions, you can just run down the rest of the metrics mapping process.

Too many SMBs think that they don’t have enough data to compete at scale with large companies, but today everyone’s cell phones have big data. We had a client that had 4 million rows of data stored in the back end of his payment processor; and that was just a couple months worth of data.

Almost every tool the businesses use store data, and every data point can help deliver valuable insights. We have found that most small businesses have a treasure trove of data available to them, but they don’t realize it.

Every company is a data company

If you’re not looking at your data and finding ways to better optimize your company, your competitors likely are. We have seen massive giants fall by the wayside because they failed to take appropriate action off their data.

The time to start taking action off your data is now. At very least, start setting up your tracking, or aggregating data. Even if you’re not ready to use it yet, you’ll be grateful to have it when you are ready to tackle big data projects.

Another great place to get started is with your North Star Metrics. These are metrics that all other metrics rely on. For Airbnb, their North Star metric is nights booked on the site. The more nights they have booked, the better their overall business does. For Facebook, they look at active daily users; this allows them to keep their finger on the pulse of usage of the site and retention over time.

You may not have time to run down and figure out all of the KPIs that impact your business; but you can figure out the one. Take the time to figure out your North Star Metric, and start tracking that. You can start to map out the trends, look for causation, figure out what drives it up and down. This is an easy way to get started with a data project, and helps establish value for future data projects.

You don’t have to reinvent the wheel

Dashboards and data visualization tools have been a hot topic as of late. Lots of businesses jump in to the world of data visualization and end up getting an expensive platform that ends up just displaying data that was readily available on other platforms, or they get a powerful business intelligence tools that they can’t fully utilize.

Praxis helps businesses incubate their dashboards under our umbrella. We offer several pre-built dashboards that can answer some of the most important business questions. Once you have gleaned value from those dashboards, we want to help you graduate into custom dashboards that answer questions specific to your business.

If you’re not sure where to start, we offer free data strategy calls where we can walk through and help you diagnose where you are now, and help you figure out how to get to where you want.

How to use data to rapidly grow your ecommerce business

How to use data to rapidly grow your ecommerce business

If you are looking to grow your business, get more leads, simplify, or create more freedom, then you’re going to want to continue. AJ and Meaghan recently went on the Growth to Freedom podcast with Dan Kuschell to talk about data, automation, health, and relationships.

Check out the full podcast here, and out insights below.

Data for entrepreneurs

Most entrepreneurs think of themselves as left-brain individuals. They rely on intuition and instinct to help them make their decisions. Meaghan and AJ used to think this way as well, but someone helped redefine that for them. While talking to a mentor, Meaghan mentioned that she was the down-in-the-weeds person and AJ was intuitive and head-in-the-clouds. As an illustration, she talked about how she relied on data and AJ went with his gut.

This mentor quickly pointed out to Meaghan that intuition didn’t work the way that she described it. Intuition occurs when the brain processes data and recognizes patterns faster than we can perceive. That means that even those that think that they aren’t in tune with data really are.

Often these intuitive people think that they just get lucky, or they’ve just got good gut instincts; but in reality, they just connected data points in the back of their mind without recognizing it.

Data is just individual points of information, but it’s not useful like that. The value of data comes when you connect those data points together and find a pattern or correlation. When people say that they’re naturally intuitive, they have an ability to create those connections in their mind without even noticing.

The importance of LTV

We’ve talked a lot about customer lifetime value and how it important it is for organizations to track. What we want to make clear is the importance of not just using an average as your measurement for LTV. We always say that averages are truly evil because they don’t give you an actionable insight. Knowing a single, static number doesn’t do much for a business; the point is to take action from it. Businesses don’t just want to know what the number is, they want to impact it, to change it, and to increase it.

You need to examine LTV over time. Your business is constantly in flux, and so the value of your customers naturally will vary as well. What was the LTV of your customers last month, or one year ago, or even two years ago? You need to have multiple data points in order to create a trend or pattern. Once you have that trend or pattern, you can find the causes for the fluctuations, and then you can capitalize on the things that caused the upswings and eliminate the things that caused the decreases.

In order to do that, you have to get granular with your LTV. You need to know where your highest LTV clients come from, what they purchase, when they repurchase, etc. And on the other side of the coin, you want to know where the lowest value clients come from, what they purchase, etc. If you can double down on getting the high end clients and stop spending money on lower-value clients then you can dramatically increase the overall LTV of your clients.

Reduce waste to increase results

If you’re using an average and taking action off of that, you’re creating a massive amount of waste. Because averages mush together the highs and lows, if you just double down on everything, then you end up doubling down on some things that don’t work. That creates massive amounts of waste.

The best way to reduce and avoid waste is to get granular with your data. Rather than taking a shotgun approach, you need to take a precision, surgical approach. By taking the precision approach to your data, you can hyper-focus your efforts on the things that work, and eliminate the things that don’t.

Avoid wasting time and effort with a dashboard

Most businesses start looking at dashboards, and they don’t even know where to start; so they start with what they know, or what they’ve read. They look at dashboards for specific KPIs or specific metrics. They forget to look deeper into the why of the dashboard.

At Praxis, we don’t build out a metric without both us and the client understanding the “why” of the metric. That’s why we start all of our data projects with a process called metrics mapping. Metrics mapping is a process that helps you make sure that you’re only tracking things that are actually valuable to your organization.

Metrics Mapping

The process of metrics mapping starts with establishing your high-level goals. What does your business want to accomplish? As you can see in the example below, this business wanted to double their overall YoY revenue.

Metrics Mapping

The next step in the process is to determine what questions you have that you need to answer in order to reach your goal. Do you need to know how to increase customer retention by 30%? Do you need to figure out how to double your average order value? In this example, we’ll stick with how to increase conversion rates on the site.

From there, you need to figure out what metrics you can use to answer that question. In this example, the client needed to know the conversion rates for the different stages of their funnel. Additionally, they needed to know their customer LTV, allowable CPA, and finally their profitability by channel.

Once you know the metrics that you need to measure to answer your questions, it’s time to determine the “source of truth” for each of those metrics. The source of truth is the place where you can find the most accurate information. So, for financial metrics, we would recommend using a payment processor, or bank account. For source data, Google Analytics works best.

From there, you want to validate your data across sources and then plug it into a dashboard.

Focus on the needle-movers

Before you can understand how to scale your business, you need to understand lead indicators and lag indicators. Lag indicators are the easiest and most common things that people measure. They measure what happened after the fact. Examples of lag indicators are revenue, total sales, etc. Leading indicators are the actions taken that drive the results. These could be things like emails sent, phone calls made, ad spend, etc. These are the efforts that drove the lag indicators for the company.

When it comes to metrics, we divide them into 3 classes. Descriptive, prescriptive, and predictive. Descriptive analytics tell you what happened in the past, prescriptive analytics help tell you what you should and shouldn’t do, and predictive analytics tell you outcomes to expect when you implement the prescriptive analytics.

Each of those classes of data can be thought of as a phase of data maturity. In order to get to machine learning and AI, you need to have descriptive analytics that tell you what happened. From there, you can start to merge your data together and combine metrics in complex calculations to help you understand what to do next. Finally, you can move on to allowing computers to extrapolate models and forecasts based off the information that you have already gathered and tracked.

The most advanced AI can’t create models without data to rely on. That’s why it’s important to make sure that at every phase you have everything set up and tracking properly before you move on.

Leverage attribution to your advantage

Unfortunately, attribution will always be a war-zone. Every platform will leverage the model that makes them look the best, and there isn’t one attribution model that works best.

The easiest attribution model for the most businesses is last-touch. Since Google Analytics defaults to that as well, it’s generally the baseline for most companies. The ideal attribution model is one that can tell you what the best first-touch campaigns are (the ones that generate the most interest and awareness for your business), then the ones that tell you what the ideal middle-touch points are, and finally the best last-touch campaigns. That would allow you to optimize your ad spend across those campaigns and create a fully optimized customer journey.

Unfortunately, at the moment, such a model doesn’t exist. The best way to create such a model for yourself would be to use attribution comparison tools to compare each model and find the ideal journey yourself. This relies heavily on accurate tracking though; every podcast appearance needs to have a UTM link in the show notes, every email campaign needs to be tagged, and your website needs to have all of the tracking installed properly. If any of those fail to work properly, then the entire model can fall apart.

The un-sexy part of data

We’ve covered the best parts of data, turning your data into insights, and insights into revenue; but all of that requires the un-sexy, foundation. In order to get 6-pack abs, you have to sweat and look janky at the gym.

Tracking is the gym section of data. We have to pump some serious data iron in the back-end before your data is beach-ready. You need to make sure that you have UTMs attached to every single customer touch-point; additionally, those UTMs should ideally be standardized. You need to have every page and every funnel on your website tagged and tracked. You need to have event, goal, and ecommerce tracking in place to make sure that you’re tracking funnel steps properly.

Once you have all of that set up, you have to validate the data to make sure that everything fires correctly, with no duplicates or missing pieces of data.

Choosing a data platform

There are hundreds of data visualization tools on the market. The problem is that most of them are just visualization tools; and not business intelligence tools. Business intelligence tools can connect multiple sources of data together, whereas most of the platforms today are just single-source dashboards. While it may be helpful to see your data visualized, the best insights come when you can combine multiple sources of data together.

Getting started

As we talked about with the foundation stages earlier, the first thing that you need to do is make sure that your tracking is set up correctly. Once you get your tracking set up, the next thing that you want to do is standardize your tracking. Make sure that all of the parameters are aligned so that you can get clean, standardized data across your platforms. Once you have that taken care of, the next step to take is automation.

Most of our clients come to us in between standardization and automation stages, in what we call “spreadsheet hell”. In that stage, you have tracking and data set up, and you’re trying to get all of the data together in one place; that lends itself to spreadsheets, and generally that turns into lots of spreadsheets. Once you hit that point, it’s generally time to start migrating to a dashboard solution.

Get creative with your data

As we’ve stated a few times, data can and should be sexy. One of the ways to make it sexy is to leverage it in creative ways. Meaghan and AJ decided that they wanted to quantify love and figure out how to optimize their love life. Once they started tracking the data on their relationship, they found gaps that were causing fights between them. Upon realizing this, they quickly made adjustments and now get more out of their relationship.

One of our clients, Fancy Sprinkles, had another example of how you can get creative with your tracking and data to make it sexy. They wanted to figure out what types of content they should post on social media. In order to figure that out, they went back through all of their social posts and tagged each one with meta-data. They tagged each post with information on whether the photo was inside or outside, a close-up or wide shot, and what colors they used.

When they mapped that data out across time with the engagement rates, they quickly found actionable insights that allowed them to skyrocket their social engagement.

How to turn your data into explosive sales growth

How to turn your data into explosive sales growth

The co-founders of Praxis Metrics, AJ Yager and Meaghan Connell, recently went on the Brand Secrets and Strategies Podcast with Daniel Lohman. It was a great podcast episode that we wanted to share here.

Check out the full episode along with our insights below:

What is Praxis Metrics?

Praxis is a data analytics agency. Essentially, they help companies that are scaling but that don’t yet have the resources to build out a full IT or Business Intelligence team. Praxis helps them to leverage their data to scale, at a fraction of the regular price. Once the businesses have scaled to the point of having the resources to hire a team, Praxis moves to support them with the backlog. This allows businesses to remain adaptable and agile, even as they scale.

So how did Praxis get started?

Praxis Metrics started as a department within a marketing agency. Meaghan and AJ ran a successful marketing agency, but found that one of their best employees had to spend all of his time creating reports for clients. They starting researching ways that they could automate their reporting, and stumbled into the world of business intelligence.

They rolled out their reporting solution to their clients, and the clients immediately started asking if they could roll it out for their whole business. AJ and Meaghan decided to launch Praxis as the “data division” of their marketing agency; but the data division expanded so quickly that they had to decide which business they wanted to focus on. They found that businesses desperately needed data services, so they decided to pivot into that. The rest, as they say, is history.

Every company a data company

If you’ve followed Praxis for any length of time, you’ve probably already heard that data recently became the most valuable resource on the planet. In today’s competitive market, your competitive advantage often comes from the insights that you have on your customers. The more data that you have on your customers, the greater an advantage that you have.

Small businesses often have a treasure trove of data, but don’t know how to access it. Most businesses use a myriad of systems, none of which communicate with one another. This causes data-silos, which small businesses rarely have the time to dig through in order to capture valuable insights.

In today’s business landscape, lots of businesses are encouraged to focus on raising money. They’re told that the best way to scale is to raise money, then raise more money, and then some more money. While they focus on raising money, they’re supposed to hand the operations of their company over to an agency.

Dan believes that it’s much more important for business owners to understand their business inside and out. They need to know what drives sales, the pitfalls and struggles of the business, and the key factors to success. Because the landscape today is so competitive, you need to know the ins and outs of your business and your customers.

The challenge of today

The business landscape constantly evolves and changes; now more than ever. The only way to prevent getting left behind now is to develop an omni-channel presence. It used to be that you could stick strictly to wholesale, or retail, or ecommerce; but now you need to talk to your consumer everywhere. In today’s digital economy, even businesses that run exclusively brick-and-mortar stores need to advertise their products and services online. And not just online, but everywhere online.

When advertising online, especially in an omni-channel fashion, you need to make sure that you’re tracking your efforts effectively. That means that you have to have UTMs set up for all of your marketing efforts, your attribution models fine tuned, and your KPIs well defined.

Data is a big reason for the sudden push to become omni-channel. In a traditional wholesale business, you sell your products to the retail stores, and that concludes the transaction for you. The retailer collects all of the data on who purchases your products, what other products they purchase,and how often they purchase. Because everyone has started to recognize the value of data, traditional wholesalers now want to make sure that they also gather this data. That’s why we see so many businesses pivoting into the B2C and ecommerce models. This transition allows them to also gather data on their clients, and reduces their reliance on the retailers.

A rising tide lifts all ships

Meaghan points out in the video that Praxis has clients that will run 6-figure ad buys in specific geographic areas in order to drive people to their retailers. While we recommend owning as much of your data as possible, you can still find ways to gather consumer data and strengthen your business relationships. These businesses are able to gather data on the people most likely to interact with their ads; while simultaneously driving more traffic to their partner’s store.

This creates what we like to refer to as the “Lift-effect” or “expanding the pie”. The lift-effect is when everyone wins based off one smart decision. Rather than creating a zero-sum situation where the only way for one group to win is by taking from another, you can create scenarios in which everyone benefits. You should check out our real-world example of this from Organifi.

The cost of data

With all of the free tracking tools available, you can get a massive amount of data with very minimal investment. Some people maintain the mindset of yesteryear that data and big data is reserved for large, enterprise companies; but today everyone has massive data in their cell phones. You can easily gain a treasure trove of insights on every visitor to your site with almost no up-front costs, other than time.

Additionally, you can get creative with your data gathering. We had one client who created a massive database for their social media posts. They simply went through all of their previous social media posts and tagged them with meta-data on the location of the image, type of shot, color of the product, etc. By creating this database, they tracked what types of posts were most effective across different seasons. This allowed them to dramatically increase the effectiveness of their social media marketing.

Syndicated marketing data can still be extremely expensive; however you can still get massive amounts of public data for very cheap or even free. For example, Walmart knows that when hurricanes are reported, they see a spike in strawberry Pop-tarts sold. While Walmart tracked the sales of the Pop-tarts, it wasn’t until they joined that data with the public weather data that they saw the correlation.

Data as an investment

Most of what Praxis does for clients is education. We have to change the way that people think about their data. Too many people either live in fear of the data, or they view it as a cost center. In reality, it’s an asset. You wouldn’t view a gold vein as a cost center just because you had to mine it in order to get the value out of it.

Praxis has yet to have a client that couldn’t turn their data into exponential growth. There more information that you have, the better you can run your business, target and acquire customers, and increase your profitability. Many businesses think that data isn’t sexy or fun; but it may be the most sexy and fun part of a business. The best way to scale your business is through data.

Praxis specializes in turning the raw, boring numbers into the sexy insights that can help transform businesses into powerhouses. We do this by delivering metrics that actually drive results rather than vanity metrics. The best way to identify the metrics that can drive your business forward is through a process called “Metrics Mapping”.

Metrics Mapping

Metrics Mapping

As you can see, the process of metrics mapping starts with establishing your goals. From there, you need to figure out what questions you need to answer in order to hit that goal. In this example, we need to know how to increase conversions for the site.

From there, we drill down to see what numbers will help you answer that question. In this example, we need to know conversion rates, customer LTV, our acquisition costs, and profitability by channel. These numbers will help us figure out how much we can spend to acquire new customers, where we should spend that money, and how soon we can expect to see returns on our ad spend.

The next step of metrics mapping is determining the “source of truth” for each of those metrics. The source of truth is the place where the most accurate information on that metric will live. For financial data, that would be your bank account or your payment processor. For traffic source data, Google Analytics is your best bet.

From there, we focus on a process called ETL. ETL stands for extract, transform, and load. We extract the data from the many sources where it lives; transform it by making sure that everything is tracking the same information, and that they’re all on the same scale. From there, we load the data into a data visualization tool.

By following that process, we’re able to take data from raw numbers into insights that allow businesses to scale off their data. This allows businesses to change the way that they behave, decrease their waste, and increase their revenues.

Move beyond what happened, and into why

Once you have a solid understanding of what has happened in your business, you can start moving into the why. This is the most important shift that a business can make. Once you gain a solid understanding of your customers and their behaviors, you can start to look into why they react the way that they do. Once you understand that, you can start to move away from looking to the past, and start looking to the future.

This is the goal of all of your data projects. We want to get you to the point where you know that if you do x, it will yield y. At that point, you can start printing money.

Predictive analytics don’t happen overnight. You need to have an extremely robust data set in order to make accurate predictions. That means that your tracking and data storage need to be put together properly so that your insights are accurate.

The waste business

Praxis is in the waste business. We work with brands to help them eliminate waste and increase their revenues. Too many businesses only focus on the top-line revenue and increasing that. They don’t look into the ways that they can boost the bottom-line profitability without increasing their spending. Praxis helps businesses find the 80% of things that aren’t driving results for the business. Once they cut that waste, they can redirect that waste to the 20% of things that are driving their revenues.

Just doing that can drive exponential scaling. We’ve seen clients explode off just that information alone. Whoever can spend the most to acquire a customer will win every time. You can see how just this information helped Danette May transform their business.

Optimization vs elimination

So many businesses focus on doing more of what’s working; not enough focus on the elimination of waste. If you can reduce your overhead or reduce your COGS, you can increase your profitability across the board.

Praxis Metrics ran through this issue a few years ago. We were stuck working in the business rather than on the business. Thankfully, AJ and Meaghan set aside 2 weeks every year to review the data for the company. We were operating at a 3% profit margin, despite the fact that we had glowing customer testimonials and good top-line revenue.

They looked into the company to figure out what was eating up our margins, and discovered that Praxis was marking too many hours as non-billable to the client. This allowed us to deliver amazing results to the client, but the company was unable to profit off our amazing work. As soon as we found this out and started to focus on charging for the hours that we worked, we went from a 3% profit margin to a 30% profit margin in 3 months.

Every business is just one data-driven decision away from exponential growth. You just need to find the number that will drive the results that you’re looking for.

Don’t cut your ham

Dan gave a great anecdote about a radio announcer who visited his son’t house for dinner. The daughter-in-law cut the ends of the ham before cooking it, so the announcer asked her why she did that. She responded that her mother always did that before cutting ham. The mother happened to be there and responded that she did that so that the ham would fit into her small pan.

Too often we do things just because that’s the way that it’s always been done. By getting deep into your data, you can find the areas that you have sold yourself short, or cost yourself opportunities.

One way that we can proverbially cut the ham is in the amount of data that we collect. Too many businesses just settle for basic tracking items. As we discussed earlier, we had one client create their own database of the different styles of social posts that they use. Another one of our clients used data in their branding commercials. This client wanted to track the effectiveness of humor in ads and when they needed to place the humor in order to maximize the effect.

They ran split tests on the different variants of the ad to see which was the most effective with time tags of when they used different types of humor. They then overlaid this data with watch times, click through rates, and purchase behaviors in order to see how humor impacted their consumers.

Talk to your customers

One thing that every brand can work on is making sure that they are talking to their customers and not at them. Often times, marketers get wrapped up in the story that they want to tell; but it’s important to remember that your product is not the hero of the story. Your customer is the hero of their story; you are just the guide, leading them to a better life.

In order to lead them, you need to make sure that your message is extremely clear. You need to tell them exactly what they need to do in order to get the most out of your products and services. Give them explicit directions on their next steps. You want to make their life as easy as possible, so guide them on the things that they should do and the things that they need to do in order to get the most out of your product.

Where to start

The first thing that every business needs to do is figure out where they stand and where they want to go. You need to run an audit of your systems and processes as they currently stand and then outline where you want them to be. That will fill in your goals section of your metrics mapping journey.

Once you know where you are and where you want to go, the next step is simply asking how you’re going to get there. Figure out the action steps that you need to take now and map out the journey that you want to take. Once you know your journey, you should ask for help where you need it.

So many professionals feel like if they ask for help they have somehow failed. That is not the case. It’s much worse to settle for what you think is possible than to ask for help and achieve the impossible.

Find your tribe

The first thing that you need to do is figure out who you want to target. Who are the customers that won’t just use your product, but that love your product, use it frequently, and will recommend it? You need to find the commonalities between those consumers, figure out the persona, and then figure out how to talk to and engage them. If you can nail that down, then you’re well on your way to success.

In conclusion

This podcast was very dense in ideas and action steps that you can take. If you need help taking action on any of the things that we covered here, we would love to help. If you fill out this form, we can help you figure out where you are, where you want to go, and help you set up that map.

How ecommerce companies can use data for better decision-making

How ecommerce companies can use data for better decision-making

Data is now the most valuable resource on the planet.

If you’ve read any of our other recent blog posts, you’re probably aware of the fact that data recently surpassed oil as the most valuable resource on Earth. While that came as a shock to some, to others this has been a long time coming.

Studies show that data-driven businesses are 23 times more likely to acquire customers, 6 times as likely to retain those customers, and 19 times as likely to be profitable.

As businesses have realized the value of data, the demand for more and more consumer data has exploded. Despite the general acknowledgement of the value of data, it’s estimated that 60-73% of data collected isn’t used in decision-making.

In this post I’ll cover a couple of ways that you can leverage data to make better decisions in your ecommerce business.

Understand your customers

Most marketers understand the importance of using data to drive their marketing decisions. The problem that most marketers face is getting accurate data that they can trust in order to make the right decisions. So that’s where we’ll start.

Overattribution

Truly the bane of every marketer’s existence, over-attribution is a constant in today’s marketing landscape. An example of over-attribution would be when you look at Facebook and they claim to have generated $10K in sales, and then you look at Google and they claim to have created $10K in sales, but you only had $15K worth of sales in that period.

Over-attribution occurs for a myriad of reasons. One of the primary reasons that it can occur is that the different ad platforms utilize different conversion reporting. Facebook currently utilizes a 28-day click and 1-day view conversion window. That means that if someone clicked on your Facebook ad and then came back and purchased from you within 28 days, they claim 100% responsibility for that sale. Google, on the other hand, utilizes a last-click attribution model. That means that they award 100% of the credit for the sale to the last click that someone used before purchasing.

UTMs

There are many solutions to solving over-attribution, but none are perfect. The first solution that we always recommend is UTMs.

UTMs are pieces of tracking information that you can append to a URL in order to improve your tracking. These can help you see exactly what ads, emails, or blog posts people clicked on in order to get to your site.

UTMs are amazing for increasing the granularity of your tracking and allow improved insights into what efforts actually drove people to your site. Unfortunately though, they don’t completely solve the issue of over-attribution. While they will allow you to see exactly what ads drove people to your site, you still have to deal with the different attribution windows in your reporting.

Multi-touch attribution

The best solution to the over-attribution problem is, unfortunately, also one of the more complicated ones. Multi-touch attribution most accurately reflects the client journey across platforms. By tracking the clients journey, these models can assign a portion of the total sale revenue to each platform that took part in the client’s journey. The reason that these can get complicated is because you need to model and decide how you want to assign credit to each platform.

Some of the more popular models that people use are: time decay, which allows you to decrease the amount of credit given to each touch point based off how long ago that happened; position based, which assigns 33% of the credit to both the first and last touch points, and then distributes the remaining 33% equally across the other touch points; the final option that we want to cover here is linear, which just assigns equal weight across every touch point.

Both UTMs and multi-touch attribution have their place in a marketers tool chest. We always recommend using UTMs, and multi-touch attribution can help with more advanced marketing initiatives.

Purchasing behaviors

Once you know where your customers come from, the next thing that you need to know is what they’re buying from you. Thankfully most ecommerce platforms readily provide this information. The important metrics to look at here are: average order value (AOV), lifetime value (LTV), and repurchase rates. Additionally, you should examine each of these metrics through the lens of how different products affect them.

In the early stages of a business, AOV is extremely important. We’ll cover more on this later, but the important thing to note is that if you can keep your cost per acquisition (CPA) below your AOV then you’ll always drive a profit off your ads. This will allow you to scale your advertising, and your company with it.

As you grow more advanced in your tracking and data, LTV becomes more and more important. As you grow in your understanding of LTV, AOV begins to matter less. Rather than worrying about driving a profit off the initial purchase, you can take a loss up front. Knowing the lifetime value of your clients gives you more freedom and flexibility in the acquisition of clients. This can lead to explosive results, just see what it did for Danette May:

The final important metric that you need to know about your customers ties in with AOV, and that’s repurchase rates. If you know when your clients will come back and repurchase from you, then you can accurately chart how long it will take for you to break even on your ads. Even more importantly, charting this metric over time allows you to see how your post-purchase marketing efforts affect your customers.

Understand your costs

In addition to understanding your customer behavior, you need to understand your operational behavior. We talked a lot about acquisition costs and advertising costs in the previous sections, but another important cost is the cost of goods sold (COGS).

In order to determine an acceptable CPA, you need to know what the costs of your business are.

Every business has their own view on how they calculate this metric. Some choose to include their operational costs in their COGS. Some only roll in the marketing costs, but not the salaries of the team. You need to determine the costs associated with the products that you sell in order to properly decide on acceptable margins.

Once you know the margins that your business needs in order to operate properly, then you can appropriately decide on your allowable CPA.

Tracking these metrics will allow you greater insight into your business and customers. Armed with this data, you can create exponential growth.

How to use data to create the lifestyle you want

How to use data to create the lifestyle you want.

We wanted to visit a topic that we haven’t really covered here on our blog before, so this week, we’re focusing on how to use data in your life. In this episode of the Stay Grounded Podcast, we’ll cover how to use data to improve your health, love, and overall wellness.

Check out the full podcast episode below as well as our insights.

How did the data-driven journey start for Meaghan and AJ?

Meaghan likes to joke that she was born with a spreadsheet in her hand. Her parents were computer nerds, so she grew up in a very analytical household. She used spreadsheets to map out her homework and assignments in school, and in college she created a weighted spreadsheet to decide what kind of TV she should buy for herself.

AJ on the other hand, focused on intuition and feelings. He tended to go more with his gut instincts, and then use data to examine the outcomes of those decisions. AJ’s grandfather taught him at an early age to always learn something new and develop himself, so he read voraciously and learned from other’s wisdom. AJ’s father was an engineer, so he learned how to be detail oriented from his dad, and then his mother was more of the social butterfly. AJ found a way to merge all of the best attributes from each of those influences in order to maximize his capabilities.

AJ’s dad helped him to see the importance of data early on, as they used data to track KPIs from across the farm. Meaghan wanted to teach calculus from an early age, so data came pretty naturally to her.

Their perspective on data

Despite what many people think, data is not something to be feared. Data is just another term for information. The more information that you have at your disposal, the more knowledge you have. The more knowledge you accumulate, the more likely that you can turn that knowledge into wisdom. Data doesn’t belong in some dark corner. Data affects and impacts every portion of our lives. By leveraging data, you can better understand your health and spirituality; it can help you plan out travels. Data helps you to spot patterns and trends. Once you see the patterns and trends, you can start to drill down into the why. Once you understand the principles that explain why and how things happen, you can begin to harness that to create the outcomes that you want.

The trick to becoming data driven is learning how to ask questions. Once you learn how to ask the right questions and find data to answer those questions, you can find new questions to deepen your understanding even further. Anyone can become data-driven, regardless of their background. People who failed math class can find truth in data. The secret to data is simply asking questions, seeking out the answers, and then taking action from it.

How do AJ and Meaghan balance data with intuition?

This is technically a trick question, because intuition is entirely based off data. While many view intuition as a gut feeling or a hunch, intuition actually relies on data, but your brain has processed the data in a manner that you didn’t notice, so you don’t recognize all of the data that went into that feeling. Intuition developed within us since the age of the cavemen.  If you think about it practically, the cavemen who recognized danger the fastest survived, while those who took too long to process that information probably got eaten. Those who survived passed this trait on to their offspring, and we carry that with us today.

How do you deal with outdated information that can feed your intuition?

The key to removing outdated information is exposing yourself to more information. The more information that you can get, the more likely that you can replace outdated or incomplete information with better, updated information. You can do this through travel, exposure to different ideas, cultures, norms, etc. The more data that you can gather, the more likely you are to have accurate data.

How do Meaghan and AJ find the data points that actually move the needle?

For businesses-

For businesses, we have a process that we go through called Metrics Mapping. This helps businesses find the metrics that will actually move the needle for them.

Praxis Metrics- Metrics Mapping Process

As shown in the image above, the process of Metrics Mapping starts with your business goals and objectives. In this example, the business wants to double their year-over-year revenue.

Once you know what you want to accomplish, you need to ask what questions you have about how you’ll reach that goal. In our example, they need to know what sources get them the best conversion rates on the site.

From there, you need to think through what metrics can help answer the questions that you came up with. In this case, the business needs to know their conversion rates for different funnels, their total traffic and where it came from, the results of their various split tests, and their ROI for each advertising medium.

Once you know what metrics you need, it’s time to find the source of truth for each of those metrics. The source of truth is the place where you can get the most accurate information on that metric. In the case of our example, traffic and traffic sources would come from Google Analytics (GA), Shopify could help us understand the funnel conversion rates and the ROI, etc.

The rest of the metrics mapping process can then be carried out from there to help you better visualize and interpret the data.

For individuals-

As an individual, you need to start this process by understanding your values. From there, it’s important to understand your personal data. You need to find the data points that matter for you as an individual.

If health is important to you, then you need to get as much information on that as you can. Get your blood and genetics tested for markers to see what things can drive the most impact for your body. Everyone has a different makeup, so it’s important to understand what does and doesn’t work for us personally, rather than following a trend or influencer.

The key to moving the needle is to create a feasibility quadrant. This graph (pictured below) allows you to map out the different options available to you in terms of difficulty and likely value. By creating this graph, you can prioritize your actions on things that provide the most benefit at the lowest cost to you. After that, we recommend focusing on the other things that were considered highly valuable, but difficult to achieve. As you have completed the low hanging fruit, hopefully, the other high-value prospects have shifted to become more feasible. From there, you can move on to the things that provide less results, but are still simple to do.

Praxis Metrics Feasibility Quadrant

How do you find the right questions to ask?

The easiest place to get started is to ask yourself where you are now. Start to analyze where you stand currently, and figure out the areas of your life where you want to do better, and where you want more. The main resources that we have in our lives are time, energy, and money. If you can find where you currently use those items, you can assess if those match your life priorities. If they don’t, then you have your questions lined up for you. “What do I want to change?” “How can I change it?” “Where to I want to get to?”. From there, you map out your steps on the feasibility quadrant and start working on it.

The trick to this whole process is attaching everything to a higher purpose of what you want in life. If you can tie your goals to a larger purpose, that will help you during the tough times. Once you have found the things that you want to accomplish, rate how happy you are with your current state. From there, you can find the things that you want to improve upon and then follow the paths laid out above.

Why is it so difficult to be honest with ourselves?

Meaghan and AJ’s theory on why it’s difficult to be honest with ourselves is because it’s painful. No one wants to admit to themselves that they have areas that they need to improve. That wounds the ego. Everyone has a version of themselves built up in their own head. Other people have other versions or variations of you built in their heads. Receiving feedback contrary to the image of yourself that you have built up in your head is difficult. Especially if that feedback is coming from yourself. But the only way to grow properly is to find the areas that you need to improve and then work towards a goal.

Meaghan has found that the best way for her to find the true version of herself is to look at her calendar and her bank account. Where she spends her time and her money tell her what she actually prioritizes.

Too often we create a vision of ourselves in our lives and in our business, and then only pay attention to things that fit that vision of ourselves or our business.

What areas of life to AJ and Meaghan recommend optimizing?

Love-

Many people don’t view love as something that you can quantify. Meaghan and AJ live to disprove that theory. They track multiple facets of their relationship in order to make sure that they each get the most out of it as possible.

The primary things that they decided to focus on were: growing apart, money problems, and sex.

In order to prevent growing apart, they studied each other’s love languages. This allows them to express affection and love in a way that the other will best receive it. Across their relationship, they correlations across the times when they fought. This correlation helped them realize that the reason that they were fighting was because AJ wasn’t getting enough of his love languages. Meaghan rectified this by adding in reminders on her phone to go and give AJ love according to his love languages every day.

Health-

Obviously, there are millions of metrics that you can use to measure your health. AJ and Meaghan track most of them. While we can’t go into too much detail on these things here, we do go into great detail on some of the most impactful tests that they have done here.

Business-

How you do one thing, is how you do everything. Life is messy, things run together. So the habits that you establish in your relationship and with your health can translate into the way that you run your business. The same issues that we talked about earlier with honesty can impact you in business. However, this isn’t always the case. People can be extremely successful in certain aspects of business where they fail in their normal lives.

How can you stay grounded in life?

AJ-

AJ uses his mornings to ground himself. He starts by writing in a gratitude journal, then meditates, and then drinks some water. If he dives right into the business side of things without taking this time in the morning, the day gets away from him.

Meaghan-

Meaghan uses travel to keep herself grounded. She and AJ plan out times during their year when they will be on the road. They’re not vacationing, just traveling and working remotely. That helps Meaghan to feel connected and new.

How to get the most out of your ad spend this Black Friday and Cyber Monday.

How to get the most out of your ad spend this Black Friday and Cyber Monday.

We’re down to the wire when it comes to Black Friday and Cyber Monday 2019. Because of the way that Thanksgiving fell this year, the holiday sales cycle is compressed and shortened. This compression has already had tremendous impacts on ecommerce businesses this month. Ecommerce companies across the spectrum are struggling to get traffic and conversions out of their standard ad spends.

In this post, we’ll walk through ways that you can leverage data to help you maximize your ROI and ROAS. While we’re focusing on Black Friday and Cyber Monday, these tips and this information is applicable year-round.

How to make sure that you maximize your ROI this Black Friday-

The first step to maximizing your returns is making sure that you have data.

That means getting your tracking in order. Lots of business owners and marketers put tracking off. It’s a common impulse.

Tracking takes time and it feels tedious to set up triggers and events for everything on your site; but no one can make up historical data. If you don’t set up your tracking until you’ve already been in business for 5 years, you will miss out on 5 years of data and insights.

Even waiting to start until after the holidays will cause you to miss out on potential insights into how you can better capture and serve your customers.

We recommend that everyone do a quick audit of their tracking systems to establish where they are now. Some of the things to check in this audit are:

  • Do your UTMs all track properly across your customer journey?
  • Are your UTMs organized in a way that makes sense and actually helps you better understand your customers?
  • Can you see right now where your traffic is coming from, and which traffic converts the best?

If you can’t answer yes to all of those questions, then you won’t be able to get nearly as much out of your Black Friday data.

As we talked about earlier, you can’t analyze what you don’t have. So if you don’t have your tracking set up before Black Friday and Cyber Monday, you won’t be able to know what you can do to improve your results next year.

Moving into UTMs, you NEED to make sure to track all of your marketing efforts with UTMs. They can help you track variations on ads, help with split testing, and give you clarity into what marketing efforts actually drive results for your business.

Step two to maximizing your returns is reviewing your data.

If you already have UTMs in place and feel confident in your tracking, then you can take the next few weeks to review your data. Look at what has worked for you in the past: analyze which emails have the best open and click-through rates, check which ads yield the highest ROAS, what buttons drive the highest cart values, etc.

Too often we get caught up in our plans for the future. We get locked in a cycle of what we want to test next, and we forget to look at what we’ve done in the past that worked. Those that fail to learn from the past are doomed to repeat it. If you don’t go back and review your data, you could potentially miss out on huge, easy wins for your business.

As we talked about earlier, Black Friday being pushed back a week has changed the face of the buying season. Many ecommerce companies are in full-blown panic mode right now because their year-over-year revenues are way down from last year.

We suggest that rather than making month-to-month or day-to-day comparisons, look at your data through the lense of days before Black Friday. So, if today was 5 days before Black Friday, you could compare it to 5 days before Black Friday last year. Then you can start to analyze what your marketing efforts looked like on that day last year, what worked, what KPI’s you saw success in, and how those impacted sales on Black Friday.

We recommend focusing on driving traffic to your site, and getting them browsing your products. Then you can leverage retargeting to reach them during your Black Friday sale and focus on driving them to purchase.

What metrics you can use to get a leg up this Black Friday and Cyber Monday

Now, we want to switch gears and talk about what metrics specifically you should analyze and track to make sure that you have the best Black Friday and Cyber Monday possible.

Average Order Value (AOV)-

This one seems basic, and it is, but we see ecommerce companies forget about this frequently during this time of the year.

Most companies focus on their profitability and the discount rates around this time of the year. That should be a top priority, but you also need to make sure that you have your upsell flows, recommended products, and bundles in order to make sure that your AOV doesn’t tank. While you may want to focus on client acquisition, you still need to make sure that these new customers provide value to your business.

This is one of the primary metrics that you should review from last year. Explore what bundles drove higher cart values, what products drove cross-sales, and what upsell flows performed best for your business.

Promo Code effectiveness-

This seems like a no-brainer, and hopefully you already have examined this data. Looking back at what discounts you ran last year and seeing what worked, what failed, and what fizzled will help inform you as to what you should do this year.

In addition to just looking at the surface-level of this metric, we recommend that you deep-dive into when your customers used your different codes, what time of day they purchased, what the AOV was based off discount code, and what was the average discount per code.

Inventory-

Black Friday and Cyber Monday are some of the worst possible times to run out of inventory. Obviously you can’t perfectly predict this year based off last year, but by examining your historical data and comparing that with this year’s demand, you can get a better feel for how much you need to order.

Staffing-

Many ecommerce companies neglect to factor staffing into their costs. During this time of increased demand, lots of businesses need to bring on extra help; but they fail to account for this increased cost in their cost of goods sold.

Not accounting for this can easily turn your sale from an asset to a liability. Typically, as you increase sales, you also increase the amount of customer service tickets that you receive. If you don’t have the bandwidth in place for that you may need to bring on additional support, but they may not get fully trained in time. Additionally, the increased wait time to have issues resolved can cost you sales.

If you don’t have a solid plan in place, issues can sneak up and turn your holiday into a nightmare.

Lifetime Value of Customers (LTV)-

One of the biggest dangers that businesses face during this holiday season is acquiring unprofitable customers. Many businesses run loss-leader deals in order to acquire new customers and think that they’ll make up the loss sometime down the line.

Without tracking the lifetime value of those customers over time, you’re stuck guessing about their profitability. We have dealt with clients who offered discounts in order to acquire new customers, believing that they would make it back over time, only to discover later that they had overestimated the value of those customers. They thought that these new customers drove their profitability, but as it turned out, they dragged down profitability.

In order to maximize the effectiveness of your Black Friday and Cyber Monday marketing efforts, you need to understand what these clients purchase initially, what they come back to purchase, and when they come back to purchase. If you understand those three things, you can tailor your marketing efforts to their natural buying tendencies and dramatically increase your effectiveness.

Going through last year’s data and then looking at this year’s plan and making sure that they align is the key to a successful Black Friday.

How to leverage pre-Black Friday sales to your advantage-

We have found that if you can give your clients a juicy enough discount code, you can entice them to spend their money with you even if they know that they’ll likely get a better discount later. Some of the larger retailers have decided to just launch their official Black Friday deals before the official holiday.

You could also promote your pre-Black Friday sale exclusively to your email list. This provides value to those who have signed up for the list, and could entice others to sign up.

We have also tested the tactic of offering a sale before the holiday by pitching it as a way for the customer to make sure that they got their orders on time. If they took advantage of this sale before the holiday rush, they could get a good deal, and also avoid the hassle of holiday shipping issues.

How real-time reporting can increase your ROI this Black Friday-

Tracking and reviewing your data make up the first two pillars of your data temple. The third pillar is automation.

In today’s world, every system tracks one specific thing, and it refuses to share that information with any other platform. Because nothing communicates, it falls to humans to aggregate and gather all of the data together. It can take days or even weeks for people to pull together the data, get it placed in the right location for analysis, and then take action from it.

Praxis Metrics specializes in automating the process of gathering the data from all of the different systems where it lives, cleaning it so that all of the metrics align properly, and then visualizing it in real-time.

This real-time reporting allows you to adjust and tweak your efforts much faster than if you relied on manual reporting. This decreased time to insights allows you to experiment and improve your marketing much faster, allowing you to drive immediate results, rather than having to wait a full year to improve your strategy.

The goal this Black Friday and Cyber Monday-

The goal of this entire process is to help you have the best Black Friday and Cyber Monday possible. If you have set up your tracking properly, you should know where your best customers come from and what efforts drove those customers to your ecommerce site. These insights will allow you to double down on the things that actually drive results, and cut the things that didn’t work for you. You can reallocate your budget from the things that didn’t drive results to the things that do drive results, allowing you to increase your ROI, and bringing in more money that you can then reinvest into the marketing efforts that are actually working.

How can you assess your data maturity to understand next steps?

We always start with an audit of where you stand. In order to understand your next step, you need to understand where you are.

Even if you have set up your tracking previously, we recommend an audit. As your website grows and you make additions and changes to it, you can easily break your tracking, or miss out on tracking valuable insights.

Praxis Metrics Data Maturity Spectrum

Stage 1-

If you fall into stage one, your entire goal is to gather as much information as possible. You can do this through Google Analytics, UTMs, defining your Key Performance Indicators (KPIs), and above all else, create Standard Operating Procedures (SOPs). If you can standardize your naming conventions for UTMs, SKUs, etc., you can save yourself hours of cleanup down the line.

Stage 2-

If you fall into stage two, your focus is on automation. What compound interest is to your money, automation is to your time. We have had clients cut the number of man-hours required to complete a data project from 10 hours per month to 1. Automation allows you to scale your efficiency and effectiveness across the board.

Stage 3-

The focus of stage three is optimization. Everything before this point deals with historical data. Optimization leverages the wisdom and knowledge gained from the previous stages and applies it to your future endeavors. This allows you to predict outcomes from your actions. This stage is where the magic truly happens. Your efforts yield predictable, exponential results, allowing you to rapidly scale your business.

Stage 4-

Stage four is the buzzword stage. This stage focuses on leveraging AI, machine learning, etc. These technologies allow you to improve your business at scale through incremental adjustments.

In conclusion-

No matter where you fall on the data maturity spectrum, Praxis Metrics is here to help. We offer free data roadmaps and coaching, analytics audits, dashboarding solutions, etc. If you want to learn more about Praxis Metris, visit praxismetrics.com or drop a line here.

Praxis Metrics- Leveraging data to optimize ad spend

Praxis Metrics – Leveraging data to optimize ad spend

In this guest appearance on the Perpetual Traffic podcast, AJ and Meaghan talk about how to use your data to optimize your ad spend, and rapidly scale your business.

They cover everything from getting your tracking in order, all the way up to creating customized dashboards and leveraging complex machine learning and AI.

Enjoy the episode and our insights below.

The struggle today-

Many marketers feel that they aren’t getting the most accurate data inside of the ad platforms. Unfortunately, they are completely correct. Some marketers go so far as to purchase a cheap dashboarding tool in order to help them bring all of their metrics together into one platform in order to help them with this issue. Unfortunately, this will not solve the problem for them at all.

Why do we suddenly have this struggle with data? What drove us to this point?

In our opinion, the problem stems from an overabundance of data. Never in the history of the world has so much data been available to us. Even in the last 20-30 years, large-scale data projects were reserved exclusively for enterprise-level companies. But now, every company has access to “big data”; despite this, many still have the mentality that their business doesn’t have the same access to data, and therefore the same opportunities and responsibilities, as the larger organizations.

Because these smaller businesses fail to leverage the data available to them, they often find themselves utilizing incomplete or dirty data. If they utilized all of the tools and tracking options available to them, they would have a much more complete and accurate picture of what’s happening.

The opportunity today-

Similar to the dot-com boom of the late 90’s, we’re seeing a “data boom” today. Those that have embraced data and created strategic initiatives around data are already separating themselves from their competition. Taking action from data is the new competitive advantage.

Those who capitalize on data have the opportunity to outpace and out-scale their competitors. John Wanamaker said: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”. Those who eliminate waste in their budget open themselves to amazing opportunities. By doubling or quadrupling down on the things that work, they can drive exponential growth.

How you can capitalize on this opportunity-

Ask the right questions-

We firmly believe in the Socratic method. Asking questions helps you find deeper truths. The trick is finding the right questions to ask that will propel your business forward.

We found that the best way to find these questions is through a process called “metrics mapping”. The diagram below walks through an example:

Praxis Metrics- Metrics Mapping

Metrics Mapping starts with the big goals of your organization. This could include doubling your revenue year over year, increasing sales of a certain product by 30%, etc. From there, we want to drill down to the questions that you need to answer in order to meet that goal. If you want to double your revenue, then why don’t you? What questions do you need to answer in order to hit your goal?

Once you have the questions that you need to answer, it’s time to figure out what numbers can help you answer that question. In the example above, we need to know how to increase conversions and revenue from the website. In order to figure out how to do that, we need to figure out conversion rates, LTV, CPA, and profitability.

Once we have asked the right questions and gathered the necessary data, we need to:

Get granular with it-

Averages are inherently evil. Averages by definition mash together your highs and your lows and give you one number to work with. In order to properly scale your business, you need to know what creates the highs and what creates the lows. Once you know that, you can scrap the things that bring in the lows and double down on the highs.

Going back to the previous example; once we’ve gathered the numbers, we can strategize our next move. Perhaps we need to update our nurture sequence to increase return purchases. We may have a funnel step that causes dramatic drop-off that we can eliminate.

By getting granular in our analysis, we can discover a myriad of opportunities.

What metrics should every business look at?

Every business suffers from “terminal uniqueness”. While every business has certain things that they specifically need to track, there are a host of metrics that every business should know.

The obvious metrics that fall into this category are ad spend, return on ad spend, etc. In addition to these, businesses should also look at cost of goods sold (COGS), shipping expenses, and overhead. Many businesses forget to factor these costs when they look at what their allowable cost per acquisition can be.

This allows you to look at your return on ad spend through the lens of profitability, rather than just revenue generated.

What is the biggest problem businesses have with reporting?

Over-attribution. We see this issue with almost every client that we work with. Facebook, Google, and every other ad platform utilizes different attribution models. Generally, the platform will leverage an attribution model that favors them, and makes them look the best.

So Facebook utilizes an attribution window, meaning that if someone clicks on your ad, and then returns to your site within 28 days, they will claim that they produced 100% of the revenue from that client. Google defaults to last-touch attribution modeling, meaning that wherever that user came from when they made the purchase receives 100% credit for the revenue of that client. Other platforms count view-through conversions combined with an attribution window, meaning that if they saw your ad and then purchased within a certain time frame, that platform claims credit for that sale.

This scenario can lead to multiple ad platforms claiming that they are responsible for the exact same sale.

How do we combat this issue?

If you’re interested in learning more on this subject, we have a separate blog post on ways that every business can work through the over-attribution problem here.

In addition to those tips, our biggest suggestion for fixing this issue is getting a multi-source business intelligence tool. By extracting data from the back end of each of the ad systems, you can piece together a client’s journey and create your own attribution models. This allows you to see your true customer journey, rather than just a simple metric provided to you by a biased platform.

Unfortunately, even that solution relies heavily on the tracking that you have in place. If your tracking hasn’t been set up properly, then you have to rely on the data reported by these platforms, rather than leveraging and creating your own.

Your output is only as good as your inputs-

It doesn’t matter how much you spend on your powerful tools, they still rely on the data that you give to them. If your tracking isn’t set up properly, it’s impossible for a dashboard to correct that for you.

Powerful insights require great data. And unfortunately, good data requires great tracking.

Good news though, if you can get your tracking nailed down properly, then everything else glides into place. The old adage of “measure twice, cut once” applies to data as much as carpentry.

Going back to the metrics mapping process, we want to help you find the “source of truth” for every metric that you measure.

The “source of truth”-

Every metric should have a place where the definitive answer lives. If you want to know how much revenue you’ve brought in over the last month, you can check your bank account, or Stripe, or Paypal. If you want to know how long visitors from Instagram stay on your website, Google Analytics could help you find that answer.

Each data platform specializes in different data points, and we want to get the best data from the best sources.

Where to begin?

We recommend that every business start with the projects that will move the needle for the business. This generally means starting with sales and marketing initiatives, as they generate revenue for the rest of the business.

We have been shocked at how many issues businesses solve by getting their data set up properly for sales and marketing. Also, by leading with these departments, we can generally start to uncover holes in other parts of the business. If we see a spike in cancellations that coincides with customer survey emails, we know that we clearly have something to fix there.

It’s important to remember with every data initiative that it’s a journey. As much as we wish that we could fix every data problem overnight, it takes time to solve these issues and answer these questions. From there, we need to take action from the insights that we gained, and then we can see the results.

Leverage your uniqueness into growth-

As we stated earlier, every business suffers from terminal uniqueness. While this can complicate projects, that is also the place where you can see the greatest results.

By leveraging your uniqueness in the things that you track, you can get extremely granular, and explode your business in ways that others can’t.

One of our clients, Fancy Sprinkles, found amazing insights by tracking what no one else bothered to track.

Fancy Sprinkles, which does exactly what their name sounds like, gets most of their leads from Instagram. They decided to go back through every post that they had ever done and manually put into a spreadsheet the variables of the post. They tracked whether the product was shot indoors or outdoors, close or at a distance, color palettes, everything.

When they overlaid this data with their social media engagement rates over time, they found amazing insights. During October, they assumed that they should post something orange and black to capitalize on the holiday. But after consulting their data, they quickly realized that those colors got the worst engagement in October. The data told them that they should use purple and green, outdoors, and close-up. Their engagement skyrocketed because of these insights.

Tracking may require an up-front investment. Fancy Sprinkles needed interns to work for hours to catalog all of that data, but once they had the historical data, it became much easier to simply input those data points on every post that they made.

When should people seek help with their data?

As soon as it gets annoying or frustrating.

This may seem simplistic, but it doesn’t make sense for you to abandon your superpowers only to beat your head against a wall.

Your company hired you because of your skillset, and if data doesn’t fall into that skillset, it’s better to outsource that than to take away time and energy from the things that you do best.

What should businesses have in place before consulting with Praxis?

We built Praxis to meet companies wherever they are on the data maturity spectrum.

If you need help with your tracking, we offer Google Analytics audits and implementations. We even have courses that can walk you through setting up your tracking at your own pace.

If you already have your tracking in order and want to move on to scaling your business and gleaning better insights, then we offer pre-built dashboards that can help you start leveraging your data into growth.

If you have issues unique to your market or business that you need specific help on, we offer custom dashboards and implementations that we can build from scratch to better suit your needs.

Praxis Metrics- How to 10X your company using data and dashboards

How to 10X your business with data and dashboards

In this guest appearance on Mike Dillard’s Self Made Man podcast, AJ and Meaghan talk about how to rapidly scale your business using data and dashboards.

They cover everything from the data maturity spectrum to metrics mapping, tracking, UTMs, and how to combine these things for rapid growth in your business.

Check out the full episode below along with our summary of key takeaways.

How did Praxis get started?

Prior to starting Praxis, AJ and Meaghan created a data-driven 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.

Initially they courted enterprise-level clients because those clients were they only ones seeking out “big data” at the time. However, as time passed, they realized that they gained more satisfaction from helping SMBs achieve their potential through data. So they began to provide the same powerful insights and dashboards that they had built for the enterprise clients to smaller businesses.

What are the biggest takeaways from working with such a diverse group of clients?

SMB business owners need the same questions answered as the enterprise companies. While they may look at them through different lenses and different granularity, the questions remain the same.

The number one question that every client asks is, “how much can I spend to acquire my customers?”. Generally, the next questions asked are: “how much are those customers worth over time?” and “where and what do they purchase from me?”.

These questions all stem from the same desire: understanding your core customers, and how to best serve them.

It all boils down to what is and isn’t working in your business right now.

What are some of the biggest differences in SMBs and enterprise companies?

Enterprise companies recognize how much data they have, and the value of that data. SMBs often downplay the amount and value of the data that they already have.

Most SMBs don’t realize that even just having timestamps of when your customers purchase provides valuable insights to the business. This lets you know the times when your purchasers will be most receptive to your messages and most likely to purchase your products.

What difficulties do businesses face with their data?

Trusting your data is the key to gaining good insights. If you don’t trust your data, then the prettiest dashboard in the world will not help you.

You need to have the confidence to take action from your data; otherwise it’s like having gasoline but no car. You won’t get anywhere with that.

We’ve seen a multitude of dashboard companies that sell businesses on the visuals of their dashboards alone, but without fixing the underlying data issues, they end up providing very little value to their customers.

Time constraints

Many SMBs say that they simply don’t have the time to get their data in order; but we preach the opposite. The best time to set up your tracking and make sure that you gather clean, accurate data is before you have too much of it. As your organization scales and grows, the amount of clean-up required in order to get your data in order scales as well. If you make a concerted effort in the beginning to get clean, accurate data that you can trust, your business will scale faster. And when the time comes to transition into dashboards and advanced analytics, your data will be ready and actionable, saving you valuable time and money.

Every business has the time to sit down and set up standard operating procedures (SOPs) for their business. Setting down SOPs is especially important when it comes to UTMs. If you can lay down the groundwork early on for standardized tracking, you can gain amazing insights on how to communicate effectively with your clients.

UTMs will tell you what types of content your customers like to engage with, it will tell you the specific mediums that they like to engage with your business on, and it will help you eliminate the issue of over-attribution in your tracking. If you want to learn more about over-attribution, and how that affects businesses, visit Praxis Metrics – How to win the attribution war to read more.

How do we lay the foundation for the future?

Even if you don’t have the time to analyze the data yet, it’s imperative that you begin tracking your customers and their behavior. You can’t retroactively gather data from your customers. When it gets to the point that you want to begin retargeting campaigns, or analyzing your customer behaviors, if you didn’t set up your tracking you won’t have any information to go off.

When they begin advertising, many businesses start with a shotgun approach. They distribute their spend equally across the most popular platforms without knowing which one will drive the best results for their business. If you track your customer behaviors over time, they will show you where they like to engage with you. You can know whether you get the highest traffic from Facebook or Instagram or Linkedin.

What are some of the data success stories that Praxis has seen?

Danette May-

Danette May wanted to see the true lifetime value of their customers to see if they could scale a funnel. They knew that the funnel converted well with retargeting, but they had a hard time getting the same response from cold traffic. They had an idea of the LTV of their customers, but they wanted to verify.

We found that their customers actually had a much higher LTV than they thought. This allowed them to increase their allowable cost per acquisition (CPA) by $5. This change caused them to take an initial loss on the first product sold, but they also knew that within 30 days, these clients would return and spend much more on other products.

This change drove them from 15 sales per day on this product to more than 350 sales per day in less than two weeks. Within a month, they were selling more than 600 units per day.

If you’d like to learn more about Danette May’s journey and how this information helped them transform their business, we have an entire case study on them here.

Fancy Sprinkles-

We built a social media dashboard for Fancy Sprinkles that allowed them to drill down to see what kinds of posts received the most engagements over time. By tagging all of their posts with series of metadata: I.E. indoor vs outdoor shot, colors used, theme, etc.

Because of this metadata, they found that during Halloween the top performing posts contained purple or green, were shot outdoors, and had close-ups of the products. Naturally, this ran completely counter to everyone’s instincts, but it allowed them to provide their audience with content that they actually wanted to engage with. Because they had this data, they outpaced their competitors in engagement and attention.

What are some of the data failure stories that Praxis has seen?

We’ve had clients who utilized free shipping discounts in order to better compete with Amazon. These clients assumed that this would inspire higher customer loyalty, and create repeat customers. Unfortunately, when we cleaned and examined their data, we found that this wasn’t the case at all.

This assumption was costing them dearly over time, preventing them from properly scaling, and could have driven them out of business if it had gone on for too long.

The key to success is listening to your data.

The most viewed person on Facebook was a magician who simply did magic tricks in front of his webcam in a coffee shop. He managed to scale his brand and following by tracking the videos that performed best and then replicating the factors in those posts over time.

Data doesn’t have to include machine learning, or advanced AI algorithms. A simple excel sheet that analyzes data points can drive more success than multi-million dollar solutions.

If you don’t analyze your data to see what works and what doesn’t; your competitors will analyze that data, and eventually overtake you because of your failure to capitalize. Data has the power to topple huge organizations like Barnes and Nobles or Blockbuster, and the pace of change is only accelerating.

Who does Praxis work with, and how can they prepare?

We have historically worked with enterprise companies; so we can work with larger organizations, but our passion is working with SMBs and helping them rapidly scale their businesses.

We have brought the “big data” insights to the SMB market by finding the common threads between every implementation that we have done for these enterprise companies. By finding the common questions that everyone has, we have built out plug-and-play dashboards that can help answer those questions. Because these dashboards require very little ramp-up or custom coding, we can offer them for a much lower price than normal, and roll them out much faster.

These dashboards answer some of the fundamental business questions that every business needs to know: what is the LTV of my customers, how are my subscription services trending over time, what products drive the most revenue and value, etc. We extract this data from multiple sources, ensuring that you get the most accurate and valuable data.

Our pricing ranges from $500-$1500 per month for platform costs, and then we just charge hourly for any work to build out the dashboards and connect to data sources.

Preparation-

We meet our clients wherever they are on the data maturity spectrum. A lot of our clients come to us and they need help getting their tracking in order before they move onto dashboards. We offer services to help with that. No matter what your data needs are, we can help you get from where you currently are to where you want to be.

If you need help diagnosing your data needs, we offer free, personalized data roadmaps to clarify the next steps for your business.

Praxis Metrics- How to set yourself apart with data

How to use your data to set yourself apart

In today’s market, businesses are a dime a dozen. Virtually anyone can start a business from a laptop in a coffee shop. The question is, how do you break through that noise, get in front of your customers and get them to purchase from you?

We’ll cover those questions and more in this podcast episode from the A-Game Advantage.

Don’t work in your business; instead, work on your business

As an entrepreneur, it’s easy to get caught up in all of the things that you need to do. Everyone has a to-do list that could last a lifetime. The problem is that entrepreneurs often get too caught up in their to-do lists.

We often hear from business owners that “someone needs to do it”, so they do it themselves. They often get stuck in the mindset of when they started the business; if they didn’t do it, no one would.

While it’s extremely important to continue to hustle and set an example of hard work, you need to make sure that your time is being utilized effectively. Too many small business leaders don’t make time to leverage their superpowers for the business.

This was the exact problem that our friend AJ Vaden struggled with in her business. She used to spend hours working with her accountant to figure out the commissions for her employees, contractors and affiliates every month.

She knew that she wasn’t properly utilizing her time by looking through reports, exporting information into spreadsheets, and analyzing it; but she felt like if she didn’t, no one would. Every hour she spent on manual reports took her away from her true value in the business, and carried a HUGE opportunity cost.

Unfortunately, many owners, marketers, and managers feel this same way. They force themselves to do redundant tasks like report generation because they NEED the insights from the reports they create. Valuable information lies cross-platform, so they build manual excel sheets in order to pull fragmented pieces of information together so that they can make better business decisions.

How do you escape the cycle?

There are two simple options when it comes to making the switch from working in your business to on your business: automate or delegate.

Both of those options have their pros and cons. Automation tends to cost more in up-front investment, but pays off handsomely over time. Delegation has a lower introductory cost, and can help you find new talent for your business; but you’re still relying on humans to do the work. Humans tend to cost more than machines over time, and they make more errors. So, by now you may be wondering what our friend AJ decided to do.

She decided that in order to scale, they needed to automate out their reporting. She decided that she wanted a long-term solution that would scale with her business. So, we helped them create custom dashboards that automatically calculated commissions, and took care of specific, one-off scenarios that used to take hours to figure out. They went from 10 hours down to one hour of manual work per month; saving them tens of thousands per month in costs.

You can read more about the solution that Praxis Metrics built, and how it impacted their business here: Praxis Metrics Case Study – Brand Builders Group

Don’t discount your data

Big businesses would like for SMBs to believe that somehow they have more knowledge and information than them. While large companies may have more historical data, SMBs now have access to treasure troves of information. Between tags, pixels, and cookies, you can get an unbelievable amount of data on how your customers interact with your brand.

There are several reasons that businesses may struggle with their data:

1- They’re overwhelmed

As we talked about earlier, there is a ton of data out there. It’s hard to determine what is useful information and what is just noise.

If you struggle with this, don’t worry, that’s a common issue to have. We have helped hundreds of companies through this issue with a process called “Metrics Mapping”. Metrics Mapping helps you find the metrics that you need to measure and cut out the vanity metrics.

The process for Metrics Mapping is very simple. Start with your high-level business objectives and goals. From there, determine what questions you need answered in order to hit that goal. In the example below, we want to double our revenue over the next year. We then need to ask, “How do we increase conversions off the site?”.

From there, we need to look for the metrics that will answer this question for us. We decided that the most important numbers for website conversions were conversion rates, customer lifetime value, acquisition costs, and profitability.

Praxis Metrics- Metrics Mapping

By simplifying the metrics that you need to measure down to the bare essentials, you can eliminate a lot of the confusion and fear that accompanies dealing with data analysis.

2- Fear of what the data will tell you

Another thing that can help reduce the stress of dealing with data is viewing it as a story. All data tells a story, but sometimes we don’t want to hear that story. If you never look at your numbers, it’s very easy to deceive yourself into thinking that things are one way, when they’re really very different.

It’s important to be able to step back, remove emotion from the equation, and analyze your data with fresh eyes.

Those who ask the important questions, such as what’s working and what’s not working, are the ones who are able to set themselves apart from the competition.

If you’re not looking at your data, your competitors are

What drove Blockbuster and Barnes and Nobles out of business? Failure to adapt to a changing landscape. Right now the landscape is shifting beneath our feet. Data just surpassed oil as the most valuable commodity in the world, and several high-level acquisitions for data companies have been announced by Google and Salesforce, totaling $18.3 billion dollars.

Your data is extremely valuable, whether or not you choose to use it. Some businesses get lucky and manage to grow their business without leveraging their data; but that’s generally because they have a great product or service and just stumble into success. They succeed in spite of themselves. If they actually leveraged their data, they could be at the top of their respective markets.

The 80/20 rule

80% of your results are driven by 20% of your efforts. Your data can tell you which 20% is driving the results, allowing you to double down on the things that create real value for your business, rather than chasing vanity metrics that do nothing for your business. Businesses that capitalize on this can double or quadruple the results that they see, not because they increase their efforts, and not because the increase their budget; but because they increase their understanding and knowledge.

This divide between the data-driven and the non-data-driven is separating the market drastically. Those capitalizing on their data are quickly becoming the 20% collecting 80% of the revenue.

How to begin taking advantage of  your data

Your output is only as good as your input.

Everything starts with your tracking. If you don’t have accurate tracking in order, then you can’t make good decisions off of your data. The most important place to start is with your revenue metrics. We recommend that companies get their tracking in order for marketing and sales so that they can see an accurate picture of the financial health of their company.

The question you need to be able to answer is “What are you doing in your business right now that is working?”. So you need to start tracking where your conversions come from. Do you convert referrals better than direct traffic, Google ads better than Facebook ads, email better than social?

For most companies, this information is already being collected for you by various software tools. The trick is finding where it’s tracking, making sure that it’s accurate, and then analyzing it for insights.

The mistake that most small businesses make is ignoring their tracking. They either think that they’re too small to worry about it, or they think that it’ll be ok if they just implement it later. The problem with this is that when you finally get to the point where you want to utilize the data, you won’t have any data.

Tracking is the foundation for data.

Even if you’re not ready for “big data”, or even to analyze it, it’s important that you start to track your data. Even if you’re not using it now, a few years down the line, you’ll be very grateful that you gathered that data so that you can glean important insights from it.

What tools should you use?

On the marketing side, you need to have Google Analytics set up on your site. Google Analytics provides answers to some of the most important tracking questions that you can have. The only downside to this tool is that it’s notoriously difficult to set up properly, and it can be difficult to find the data that you’re looking for if you’ve never used it before.

We recommend having an expert help you install and set up your Google Analytics. We offer that service if you are interested.

In addition to Google Analytics, Google Tag Manager is a free tool that will help you manage all of the other tracking codes that you want to apply to your website. From Facebook pixels to LinkedIn advertising, every platform has their own proprietary tracking, and all of that can get messy on the back end of your website. Google Tag manager helps to keep the code that you have to install on your site minimal, and keeps your tracking organized.

On the sales side, you need to have a CRM set up that allows you to track your sales, clients, how they found you, and your sales cycles.

What changes when a business starts really tracking their data?

Growth

When a business starts focusing on their data, they speed up their time to value and their scalability. If there are two businesses that sell the same products, the one that understands what does and doesn’t work for their business will be able to eliminate waste from their organization much faster, and therefore bring in higher returns from every investment that they make.

We have seen companies that were planning to reach $50 million in revenue in 5 years scale that number down to 12 months because they started to double down on the things that work and eliminating the things that didn’t. By understanding their customers and what resonates with them, they were able to rapidly scale their business simply by doubling down on the things that are already yielding results.

We had one client who wanted to know one specific question: what was the lifetime value of their customers. They came to us for help with this question, and we helped them discover that they had greatly underestimated the value of their customers over time. So they decided to increase their allowable cost per acquisition by just $5. This decision helped them increase the number of sales from 15 sales per day to over 300 in less than a month. From there, their numbers kept rising, and now that one funnel brings in more than a million dollars per year in revenue.

Praxis Metrics- Danette May LTV Revenue

This client was able to see that level of transformation off of just one metric, and one simple question.

Relief

So many entrepreneurs come to us at their wits end. They push themselves to the brink trying to grow and scale their business; but once they understand the things that they don’t work, they’re able to stop worrying about that and stop dedicating time to it. This allows them to focus in on the things that provide value to their business, and it rapidly simplifies their lives.

One of the primary goals of this process is eliminating waste. Eliminate the 80% of things that eat up your time and energy, and focus in on the 20% of things that are providing real value to your organization. Doing this helps you reclaim your time, and allows you to increase the value of your output dramatically.

How to use data to stand out to investors

We work with a lot of VC firms who talk about how helpful this data is when analyzing their companies. The data helps them understand the story of the company. Having data helps these investment firms understand the true potential of these companies, and helps them apply the 80/20 rule in the businesses that they invest in. They can focus on the 20% of their companies that produce the highest results for them, and then stop investing in the 80% that underperform.

Having all of your data in order also helps when trying to pitch investors. Many investment firms have teams that they use in order to validate your data, but if you can show them exactly where the data comes from and how it’s validated already, it will put you head and shoulders above your competition.

How to use data to help you in your daily life

Health and fitness are an easy way to start leveraging data in your life. There are an infinite number of metrics that you can use to measure your health: from weight to pant size, the number of reps that you perform at the gym to your cholesterol levels.

One of the more obscure ways to leverage data in your everyday life though is in your relationships. By leveraging data in your relationship, you can start to track where your points of conflicts are, then you can start to drill down into why that conflict is occurring, and finally learn how to prevent it from happening again.

The goal of data is to leverage it into changing human behavior; both in business and in relationships.

If you look at your calendar and your checkbook, you’ll quickly see where your priorities truly lie.

Visit us here to see how you can leverage your data into growth.

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. Schedule a free appointment with a Praxis Metrix data expert.