Let’s start with an immediate concept: not all data are equally useful. Sometimes, in fact, they are a distraction, a loss of the initial focus.
But how can we understand that?
In this second appointment with our podcast, I would like to share with you some ideas to identify and make the most of your Data Strategy.
You can listen to them below:
See Podcast transaltion
Hello everyone, I’m Marco Barbiero, Axiante’s Senior Functional Business Analyst and in this new appointment with our podcast, I’d like to share with you some ideas to identify and make the most of your Data Strategy.
Let’s start with an immediate concept: not all data are equally useful. Sometimes, in fact, they are a distraction, a loss of the initial focus. It is essential, therefore, to avoid the so-called “vanity metrics”.
But what are vanity metrics? Why are they so called?
We hear more and more about it, these metrics are statistics that look fabulous when communicated through a press release, but are almost useless when translated into business results.
Let me give you a practical example: let’s think about the number of followers of a company page on Linkedin. Relying solely on this data, could provide us with a distorted view of reality, making us mismeasure the performance of our content and the entire social strategy. It’s not important to have a large fanbase, but focused. People who are our followers may be so for several reasons, many of which have nothing to do with the interest in our products/services.
It’s just a simple and intuitive example, but we find this kind of metrics in all areas of the business, regardless of the industry and the market, used to evaluate processes and flows.
But then vanity metrics are “vain”? Are they of no use?
This is a very debated subject, in my opinion it depends. It depends a lot on the way they are interpreted and used in the analysis, and on the relative weight that is attributed to it.
Let’s get to the heart of the matter. My advice is, first of all, to set your strategic business goals. So, once you have defined these, you can try to understand the right mix of metrics that can allow you to analyze, monitor the situation and above all that are useful to achieve these goals, tangibly improving performance.
You could focus on how your customers’ actions directly affect your profits on a particular product. In fact, all companies with the greatest possibilities must be ready to measure their growth and keep up to date with the competition. The main Saas metrics are essential to monitor the performance of your campaign, a key element for success. Obviously the main Saas metrics will allow you to get the most relevant data to improve the management of your business.
These are the main metrics to consider:
The cost of acquiring a new customer (CAC) shows exactly how much it costs to acquire new customers and how much value they bring to your business.
The Value of Customer Life (LTV)
Monthly recurring revenue generated by your product/service (MRR)
Conversion, understood, for example, as the percentage of people who become a customer after a free trial.
These are useful if you already have a product on the market. But what if it is not yet on the market? Where can you search for metrics and data that can guide your strategic decisions? In this case, you should opt to do some market analysis, or, unless you are planning to launch yourself into an entirely new category, you could analyze your competitors in depth.
Let’s finish and recapitulate:
1. establish strategic objectives;
2. lists the data points that could be profitable for the business and finds the right sources;
3. limits metrics to more profitable metrics (too many data points = confusion, little chance of getting to really strategic information);
4. connect metrics to objectives (and adapt your strategy if necessary);
5. Here you are at your data-driven roadmap, to share with executive stakeholders: in this way you will understand that your choices are based on real, tangible data, and not just simple insights.
I could wish you luck, but who is really data drive doesn’t need it: with all these data driving decisions and supporting business strategy, you’re already in the right direction for success.
For this episode of the podcast is all, thank you for listening and see you next time!
If you want to know more about the topic, stay tuned to our Insights section or on our Linkedin page.