5 Aspects of your Business you Need to Track Today to make any Data-Driven Decisions
Post was originally published in October 2019, and has been updated in September 2021 for relevancy
You'd like to stay lean and scale, but how? What's the next step you need to take? Let your customers tell you -- through their data.
You can't get insights from data you didn't collect. It's less important about where you're storing the data and more about what you are -- and aren't. This is because we can use the data to calculate metrics (or 1-number summaries) that tell us what's happening in our complex business, and when tracked over time, can tell us how we're doing in terms of product market fit -- and where can we improve.
After 10 years of collaborating with companies of all shapes, sizes and industries, I've found that all aspects of your business fall into just 5 attributes that you should (legally and ethically) track across your platform/hardware/service and your customers, timestamped at the individual event level:
"Demographics" of the customer's/IoT device (e.g. Android/iPhone, tablet, desktop, hardware type),
Your app's/platform's "demographics" (e.g. release 0.9.3, pricing plan(s)),
State(s) of the app's/platform's assets (e.g. inventory, sensor(s)),
Interactions of all of the above, and
Touch-points (e.g. acquisition channels, marketing emails, customer service interactions, sensor maintenance),
By tracking these 5 attributes about your business, you'll be able to answer virtually any question -- about the past, present and future*. These include:
Ways to improve product market fit through product led growth?
Who's on the platform right now? And how are they using the product?
Quantifying CAC to fine-tune your customer acquisition and retention strategies, based on:
who your high-profit customers are and how they found you,
what their purchase triggers are,
where they're coming from, and
what keeps them coming back;
Create an omni-channel experience for your customers;
Track how your offering has changed over time, what it looked like at a given point in time, and how that impacted the business;
Identify best- and under-performing product features, to help prioritize development;
... and many more.
To help you benchmark your product-market-fit by checking that you’re capturing everything about your business, schedule a flat-fee data strategy assessment.
Keywords: Product strategy, data products, customer understanding, customer acquisition, CAC, retention.
*Data quality permitting
You may also like:
(Step 1) Dear Advisor: How do I get Started on a Data Strategy from the Beginning?
(Step 2) Dear Advisor: I’d like to make data-driven decisions. Where do I start?
(Step 3) Dear Advisor: How do I do Product-Led-Growth (PLG) as my Go-to-Market (GTM) strategy for Product market fit (PMF)?
What are some of the biggest AI/ML mistakes I continually see start-ups make?
Advice for event tracking: Choosing a Product Analytics Tool: You might say CDP, I say it comes down to event tracking, by Sarah Krasnik
Biggest pain points with data: The Mindset of a Data Leader, by Grace Isford
Tips for tackling the cold-start problem of CAC, by Elizabeth Yin
SaaS Metrics 2.0, by David Skok
Drive Growth by Picking the Right Lane — A Customer Acquisition Playbook for Consumer Startups, by Dan Hockenmaier and Lenny Rachitsky
Steps to enable to track your customers across platform, starting with Google Analytics
How to measure cohort retention, by Olga Berezovsky and Lenny Rachitsky