How To: Start Making Your Business Data Driven
1. Make a list of your core KPI
Make a list of 10 or so core metrics you want to track. Your probably want two or three from each aspect of your business. For instance, if you are an organization running an inbound SaaS sales strategy, you’ll likely want to set up sections for tracking a few datapoint relating to each your email marketing, sales calling, website inbound, social media, and customer retention sections of your business. Or for example, you’re a mass market B2C mobile app, you’d likely want to collect datapoints in the silos relating to app downloads, website traffic, in-app user activity, and user referrals. All to say that the type of business you’re running should dictate the metrics you’re tracking.
2. Put them in a spreadsheet
Once you’ve identified the core KPIs you’d like to track, enter them into the right-most column of a spreadsheet. I prefer to use Google Sheets for this, as you can do some pretty neat stuff in terms of importing data from other Google Sheets or even external data sources.
3. Record them every month
Enter months across the first row of the spreadsheet. Each month, record the corresponding KPI in the cell. Over time, your spreadsheet should start to show some basic patterns from your business.
4. Read the data
Sit down for an hour to look through the data. Can you find anything interesting? Do some datapoints move together, while others seem to vary without relation to each other? Look for areas where you'd like to see more data to understand whats going on.
5. Add more metrics in areas you want more insight
Tracking more data can take a bit longer, but hopefully you've gotten the hang of it after a few months. Noting in each row of a second column of your spreadsheet where exactly you gather each datapoint from can help you streamline the data collection process, or even pass it off to another employee or trustworthy intern. From here, add more datapoints to track to your spreadsheet, and potentially even create another tab if you find yourself tracking a lot of datapoints from a single source (you can make the data from the rows in one tab automatically appear in rows of another tab by setting cells of one equal to the other).
6. Read the data again
Hopefully the next time you go to look at your data, the new points that you've collected can help you start to get a clearer picture of some of the questions you had. If not, think about killing a few datapoints and replacing them with others.
7. Use tools to collect the metrics automatically
Over time, you can likely justify investing in automating this data collection. There are a myriad of tools that can facilitate this, and careful evaluation is prudent before selecting a system that can be costly and reequire development resources to set up. There are a number of benefits that collecting the data through an automated pipeline can facilitate, namely: much more detailed analysis capabilities. What exactly these additional analyses that can be performed are depends very much on the company and the data collected.
8. Add more metrics
Now that you have an automated system for metric tracking and data collection, adding new metrics to track should be a breeze. Now you should be able to spend more time
9. Build reports and dashboards
Now that you've built capabilities around data collection and analysis related to your business, you can provide this data to various internal and external stakeholders in the forms of reports and dashboards. You can set these to run on a periodic basis and let them run indefinitely, keeping you and other essential people informed of the heath and growth of your business.
10. Become truly data driven
Once you have a handle on your organizations data, you've build a basic platform, data structures, and models from which you can approach more advanced data processing and analytics capabilities. This is where the buzzwords like big data, machine learning, predictive analytics, and smart recommendations come into play. And surprisingly, they're not as far off as you might think. But you have to start by taking the steps towards becoming a data-driven organization, and investing in understanding your business.