AJ and Meaghan recently appeared on the Nice Guys on Business Podcast. It was an awesome conversation that covered everything from tracking and gathering data all the way to how to use data to improve relationships.
Check out the full episode below along with our insights:
What is data, and how does it affect business?
A lot of people glaze over when they hear “data talk” coming at them. That is a natural response to something that seems very complicated and difficult to understand. For that reason, we want to simplify data and point out that data is just points of information.
Data isn’t just ones and zeros or spreadsheets; data is about helping you make better decisions in your business. Throughout history, people have looked up to their wise elders to help them make decisions. The wise elders were the ones who had the most data and information to draw on. Nothing has changed today; the smartest people and companies leverage data the best.
Data is everywhere and can be used for almost everything
As we move more and more of our lives into the digital world, we create more and more data. As businesses have started aggregating and analyzing that data, some have developed the ability to see into the future.
They actually haven’t; but sometimes it feels like that. From Target accurately predicting that women were pregnant before they knew, to Amazon knowing exactly what you want to buy next; companies that use data properly can hyper-target their customers at exactly the right moment.
Analytics, metrics, and KPIs -Is that data?
Yes and no; analytics and metrics are just names for different types of data; and KPIs are specific metrics of data.
When it comes to data, the first thing you have to do with data is track it. Most businesses have some tracking and data under their belts, the problem is that they have too much of it. That is where KPIs come into play. KPIs, or key performance indicators help businesses narrow in on the metrics that make the biggest difference for them.
So while all three of those things take part in the data ecosystem; data is just information.
I now understand data, now how do I use it in my business?
The Nice Guys focus primarily on sales, so we focused our answer on sales organizations; but the principles apply to all businesses.
No matter what your data initiative, the end goal is always to get someone to convert. For sales organizations, that means that you want more sales. In order to get more sales, you need to figure out what drives your sales.
Obviously, getting more leads should increase your sales; but leads are not created equal. You need to figure out what lead sources drive the best leads to your sales people, which sales people work best with which type of clients, what impact your marketing efforts have on the leads, etc.
Do I need to do all of that analysis myself?
Not at all. Becoming a data expert or data scientist should not be high on any business owner’s priority list. Praxis can help perform the heavy lifting, preparing and distilling the information down to the insights that you need to make changes in your business.
The last thing that we want to do is add more to your plate; so we work with business owners and marketers up front to determine what insights and data will help their organization the most. We start with metrics that can help you make decisions immediately to help your business.
Find the things that you need to track, not the things that other people tell you to track. Data does not have intrinsic value. Data is only useful in that it can provide insight into what actions you should take. If you don’t take action from the data, then it is not valuable to you.
Praxis helps you reduce waste
At Praxis, we like to say that we’re in the waste business. Our goal is to help other businesses reduce wasted time, effort, and money. Most waste in business comes from averages.
Averages are inherently evil because they mash together your highs and your lows and spit out one number. In order to reduce waste, you need to eliminate the lows and redirect those resources to the highs. That is the secret to scaling a business. By transitioning resources from underperforming areas to areas of overperformance, you can push your entire business into hyperdrive.
The fastest and easiest way to scale a business is to eliminate the things that aren’t working and shift those resources to the things that are working.
While running through that process of trimming the fat, you will find that your business and processes naturally simplify along the way. As you eliminate wasted time, energy, and money; you’ll naturally have more of all of those things.
Data is the key to rapid scaling
We live in dynamic times; in the past, businesses could rest on their laurels and remain successful. In today’s business landscape, industries can be disrupted by someone with a laptop. Businesses that don’t remain agile cannot compete with companies that shift and adapt.
The best way to know how and when to adapt is through data. Taking action from your data is the new competitive advantage. Those that capitalize on their data will scale, and those that don’t will fail. There are a myriad of case studies that almost anyone can cite of agile, data-driven companies taking on and toppling the incumbent industry leaders.
One of our favorite sayings is that every company today is a data company. If you’re not analyzing and taking action from your data, your competitor’s will, and they will eventually overtake you.
How does the lifetime value of customers impact my business?
As we talked about earlier, averages are evil. This goes doubly for the lifetime value (LTV) of your customers. We find that many businesses track the average LTV of their customers and think that they’re set with that.
One thing that we always ask clients before we build out any dashboards or metrics is what they’ll do with the information once they have it. If you knew today that your average customer subscribes to your product or service for 5 months, what would you do with that information?
Would you contact every client right around the 5 month mark in order to try to keep them on with you?
The problem with that is that by the 5 month mark, you’ve already lost half of your clients. And those that stuck around probably weren’t looking to cancel right at the 5 month mark.
In order to make the data truly actionable, you need to know when individuals purchase or leave. You need to know what affects those individual’s purchasing decisions, and then try to impact them on an individual level.
How do I get started with all of this?
The best way to get started with data is to schedule a data strategy session with Praxis. During that call, we can walk through your technologies, goals, and data needs.
After talking with you, we can help you create a data roadmap of how to move forward with your data initiatives.
All of our data strategy sessions are completely free. At Praxis we are very purpose driven, so we want to make sure that we can help as many people as possible through data.
If you’d like to learn more about our products and services, you can see some of the metrics and dashboards that we can create for you here.