6 Strategies for Using Data to Make Decisions in Any Economy
This article is an excerpt from my new ebook, The Hidden Data in Your Company. You can purchase the full ebook here.
If you have ever watched any cooking shows, you’ll notice that all the relevant ingredients are easily accessible. They are usually right in front of the contestants. This is one of the secrets to make cooking more enjoyable.
The worst time to look for an ingredient is while your food is burning. The same thing happens when using data to make decisions. You need to have everything ready instead of looking for a metric in the middle of a high stakes campaign.
In the previous chapter, we learned how to assess our current data strategy and spend our limited resources. In this chapter, I want to share 6 actionable strategies for using data to make decisions.
Strategy #1: Centralize All Your Reports and Dashboards
As data increases, so does the number of reports. It’s almost a linear relationship. The trouble is that you end up creating the same report multiple times. This is wasted effort that could be better spent on other things. The solution is to create a central repository for all your data.
In this repository, you want to include the following elements:
- Report & Dashboard Links
- Definitions of KPIs
- Data Schema Explanation
- Relevant Support People & How to Contact Them
- Case Studies on How Data Can Be Used
- Roadmap For Additions to the Data
- Instructions for Chosen Technologies
- Any Other Training Videos & Materials
This repository can be built over time and should become the first stop for anyone who has a data question.
Strategy #2: What Questions Are On Your Mind?
The right questions can drive great conversations. If you approach your data with the right questions, you’re more likely to find useful answers. I’m skeptical of any insight that is interesting or quirky but irrelevant.
You may learn that 60% of your traffic happens on mobile devices or that 30% of your customers are male. Is this answering a burning question in your mind?
Strategy #3: Focus on People, Process and Providers
Data strategies don’t need to be complicated. You can organize them into the following three categories:
- People: who’s going to be using and working with the data?
- Process: how are you going to extract insights from the data?
- Providers: what technology is needed?
3Ps Framework
Having a simple but well thought out strategy will help you tackle problems before you ever encounter them. It’s also essential to tackle them in the order I listed them. It makes no sense to start with technology when you don’t know the people or process elements.
Strategy #4: Track Fewer KPIs
Let me start with a controversial idea. You’re tracking too many KPIs. Imagine if your car gave you an update on every system and part while you drove. It would drive you nuts (no pun intended), and it would make it harder to know when something was critically wrong, like running low on fuel.
You can do three things to reduce the number of KPIs that your team interacts with regularly.
1. Organize your KPIs into two categories: team-wide and campaign-specific. The team-wide KPIs may include quarterly targets, overall CAC, and new sign-ups. You need to follow these KPIs but probably not every day.
You then have campaign-specific KPIs which track the performance of active campaigns. This could include the latest Facebook Ads campaign, weekly newsletter, and active SEO efforts. These initiatives are going on right now, and you need to stay on top of them.
Your team can then establish frequencies for checking these numbers based on their priority. The team-wide KPIs could have a weekly frequency while the campaign-specific KPIs have a daily one. The goal is to remove the mental burden of keeping track of too many KPIs.
2. Interrogate each KPI to ensure it is useful for your team. If a KPI goes down or up, how would it change your behavior? That’s the litmus test for any KPI. If the behavior change isn’t apparent, then you could likely skip it altogether.
3. Start small and add complexity later—experiment with only measuring a handful of things for each campaign. A mentor, Alan Weiss, always told me that it’s better to move three things a mile than move ten things an inch. Look for those 2 – 3 KPIs (team-wide or campaign-specific) where moving them a mile would be a significant outcome.
Strategy #5: WDIM
Become an expert at one of the most important questions that you should ask your data: WDIM.
WDIM stands for “What Does It Mean?”. It’s fun to know that most of your traffic comes from mobile devices, but what exactly does this mean? Should we redesign our website? Do we need to launch mobile-only campaigns? Are actual customers coming from mobile devices?
If you don’t have an excellent answer to WDIM, you likely don’t have a relevant insight. Maybe this insight will become helpful in the future, but you can table it for the moment. Use meetings and conversations to debate WDIM. Spend the bulk of your energy on this question.
Strategy #6: Change the Role of Data
I recently did a presentation titled “Why You Shouldn’t Build a Data-Driven Culture.” The topic ended up being more controversial than I thought. Data-driven has been the persistent beat to any conversation around data. I believe this is incorrect and puts data into the wrong role.
Companies and people should use data to support decisions, but you should also make decisions without it. We have all come across situations where were didn’t have all the data, but we still needed to make a decision. Are you just going to wait until all the data comes in?
The perfect example of this was COVID-19. Governments all around the world had to make decisions based on limited data. Even when they had more data, they still made mistakes on restrictions and lockdowns.
In your team, you need to balance the need to track everything with your ability to make decisions. Some people might call this intuition or gut feeling. The balance of hard facts and your experience is something that should be cultivated and honed.
