All that it takes to scale your business is the proper data. In the following video and blog post, we’ll take you through how to take advantage of the information that you already have and use it to scale your business, no matter the industry.
Data, Information, Knowledge, Wisdom, and Praxis
Let’s simplify and redefine your views and definition of data. Data is simply the path to information. And information is your road map to knowledge, knowledge guides you to wisdom, which ultimately leads you PRAXIS, which is the ACTION you should take based on the knowledge and wisdom you have.
Data is simply events or outcomes, information is when you understand the relationships between those isolated events, knowledge is understanding the patterns- looking at trends over time and correlations in what is and is not working over time, wisdom is understanding the underlying principles and CAUSES, while PRAXIS is the action you take once you have that wisdom.
Data is an event or outcome without any context or true value by itself. Something like: IT IS RAINING. In and of itself, that would not be a revolutionary.
Information, however, is being able to connected multiple pieces of data together to see correlations and relationships: “the temperature dropped 15° and then it started raining”
Knowledge is then understanding the patterns between the variables: “Knowing that when humidity is high and temperature drops, the atmosphere is often not able to hold the pressure and so it rains”
Then wisdom is where we able to stop looking at the past, and we are now able to extrapolate and forecast what WILL happen rather than what HAS ALREADY happened: “UNDERSTANDING ALL INTERACTIONS BETWEEN EVAPORATION, TEMPERATURE CHANGES, AIR CURRENTS, AND BEING ABLE TO PREDICT RAIN NEXT WEEK”
Lastly, Praxis is the practical application of all this wisdom in order to get positive results: It’s being able to predict that it will rain on your vacation next week, and that you need to pack boots and an umbrella to prepare for your trip.
The ultimate goal and outcome we are looking for is a result of the actions we take based on the wisdom we extrapolated from the raw data.
So here is a quick side note for you:
“Not taking action from data is like owning a race car and never putting fuel in it”
There is a ton of data available to you, but data itself will not grow your business.
Data itself will not give you the results that you want,
The knowledge you gain from data will help guide you and your team to make the best informed decisions on what actions they should and should not take throughout the day.
So let’s simplify this one last time before moving on to your action steps and road map to scaling.
Data is WHAT HAPPENED in your business, information is understanding the relationship between WHAT happened and WHERE and WHEN it happened, knowledge is understanding the patterns that tell you HOW that happened, wisdom is understanding the principles and mechanics of WHY that happened, which leads you to be able to predict when it might happen again in the future, and at each stage in this journey, Praxis is taking ACTION based on the data, information, knowledge and wisdom you’ve gathered.
Becoming Data Rich
By taking those actions, you are getting NEW valuable data. This is the path that the leaders in your industry are taking, this is what helps them grow and scale, it tells them exactly what is and isn’t working, and how to increase their revenues and profits… this is THE PATH ….. To becoming DATA RICH
Now you understand the road map on how to use data to scale. Up to this point in history, BIG DATA was only accessible to enterprise mega giants because collecting data and hiring data scientists for extracting and analyzing data could cost millions in Technology and Human Resources.
However, nowadays millions of rows of DATA can be found in our cell phones, in the back end of our email systems, and tracking on our websites, so raw data is now accessible to any small business owner.
So the question is, how can you take the raw data that is already available to you and use it gain knowledge and insight to scale your revenues and increase your profits?
That’s what we will be covering in the next part of this blog, what ACTIONS TO TAKE, no matter WHERE YOU ARE on the spectrum, to move to the next stage of data maturity.
Becoming Data Mature
So let’s start at the beginning: your outputs are only as good as your inputs. The foundation for growth is first HAVING data.
When small companies come to us and ask us how to scale, they typically do not have a foundation for success.
Data Foundation Stage
Here are some quick questions to ask yourself to see if your company is in the data foundation stage:
Do you have tracking in place at all stages of your customer’s journey? Including a basic Google Analytics set up?
Are you not using advanced tracking like UTMs, Custom Conversions, event tracking or pixels?
Do you know what KPIs your team should be monitoring?
Do you have standard operating procedures that everyone follows for naming conventions in your systems?
Are you or your team members MANUALLY creating excel or google sheets for your reporting because it’s all stored in a bunch of different technologies and is disparate?
Or are you simply logging into each of your systems to look at the native reports?
If you answered YES to most of these questions, then you are in the FOUNDATION stage.
Your main action step in order to become more mature is to focus on TRACKING and MONITORING.
Remember, your outputs are only as good as your inputs, so we need you to HAVE data first. That’s the foundation for you to be able to scale.
In order to progress, you need to:
- Implement tracking procedures in GA and UTMs
- Define what metrics are important for you and your team to know
- Implement SOPs to make sure the data is clean and consistent
Even if you don’t have the resources right now to do anything with this data, you need to start GATHERING it so that later, when you can afford to look back for patterns and hidden areas of opportunity, you have something to review… you can’t RETROACTIVELY pull data if the data wasn’t being tracked… so PLEASE, make sure you do this now… you will thank yourself later.
Once that foundation of data collection exists, you can move on to the next phase: Automation
You’ll know if you are in this stage if you have all the complex tracking in place, but you or your team is spending a ton of time gathering valuable insights from a bunch of different systems and compiling them together into google sheets or into excel and pivot tables.
Let’s chat about this for a second:
What compound interest is to your money, automation is to your time
It’s exponential leverage to scale
It’s reduction in overhead, it’s focus on what’s important – the ANALYSIS of the information, rather than the collection of data.
To advance higher and to scale, the focus is on integrating your systems together so that they automatically transform the raw data into the insights you need to take action. This allows your team to focus on valuable actions rather than mundane data entry. In technical terms, this is called ETL (automatically extracting, transforming and loading your data into one place).
In addition, setting up this automation lays the foundation for visualized reports or DASHBOARDS. Dashboards allow you to quickly see the highs and lows of your business, and let you quickly see patterns and anomalies of success, as well as those areas of wasted time, money and valuable resources.
Finally, it also allows you to share this information with all the people on your team. You wouldn’t believe the value that democratizing your data can have on your organization… sharing this data allows your team to bring valuable insights to the table and different perspectives that you might not have seen. We call this the LIFT EFFECT.
So once you have the foundation of all your data tracking, and after that data has been gathered to one place, and you have automated reporting in dashboards,
THEN you can focus on optimization and analyzing really fun CAUSATIONS between your internal data and EXTERNAL factors…
For those of you who aren’t TOTAL nerds like I am, let’s define this because there is an extremely important principle in statistics that states: CORRELATION does not imply CAUSATION.
As a simple example: Polio rates and Ice Cream sales from 1949. Although they are CORRELATED, that does NOT mean that Ice Cream is the CAUSE of polio. It is very simple to see here, but how many of you make these assumptions in your business when you see trends or relationships like this?
The more data you have, the more accurate picture you can paint among it’s relationships. The more data points you have, the better you can tell which one is most accurate.
You have a ton of INTERNAL data, but there is ALSO a ton of incredible PUBLIC data that you can integrate with in order to gain a more robust understanding of your business, your ideal customers, and their purchasing behaviors.
Imagine knowing that when temperatures rise above 75º, your return on ad spend for your Sunscreen company increases by 15%…
or imagine KNOWING that your customers with the highest lifetime values have certain demographics or political affiliations?
Or that you have the best sales when certain economic factors align?
Here at Praxis, we have found:
COMPANIES THAT CAPITALIZE ON CAUSATION
THOSE THAT DON’T
Here is a real life example of this in use: Walmart sees a 7x increase in strawberry pop-tart sales when hurricanes are reported off the coast of Florida or Texas. Imagine being a competitive grocery store and not having enough pop-tarts in stock. You would suffer an incredible opportunity cost of potentially millions of dollars.
Can you imagine how many small to mid sized companies are put out of business because they don’t see these patterns? Because they don’t capitalize on these hidden insights that their competitors DO.
What causations are you missing out on in your business?
The final stage of data Mastery is for companies that are innovating and modernizing.
At Praxis, we help clients with the most cutting edge resources to help them understand their business better, including natural language processing, machine learning and Artificial Intelligence in order to innovate.
To summarize, here are the recommended steps you can take to advance through each stage on your road to data mastery:
- Data foundation- Tracking
- Automation- Integrating
- Optimization- Analyzing
- Mastery- Innovating
No matter where your company is currently on this spectrum, these are action steps you should take to move you closer towards information optimization.
That is the definition of PRAXIS – the application of the knowledge you gain from your data.
Taking action from data, is the new competitive advantage. Here is your list of action steps for progressing:
- Share this with your team
- Collaborate to see where your business is right now
- Follow the checklist for how to advance from each stage to the next
- Assign appropriate team members each action step with a due date
- Reach out to Praxis Metrics if you need more information or help.
So, to recap the big rules of scaling:
- Not taking action from data is like owning a race car and never putting fuel in it.
- Your outputs are only as good as your inputs.
- What compound interest is to your money, automation is to your time.
- Companies that capitalize on causation will scale, those that don’t will fail.
- Taking action from data, is the new competitive advantage
I’m Meaghan at Praxis Metrics, thank you for investing your time here with me today. Please connect with Praxis on Linkedin and Facebook for more resources to help you scale. We love to help companies like yours grow and achieve their goals faster, so please reach out to me if you have any specific questions about your unique business.
Good luck on your journey, We are looking forward to helping you scale!