Growth Analytics? What’s that?
It is a broad concept that converges industry standards and best practices for data analytics toward business growth. It effectively gathers practices across different data analytics and technology fronts, including data engineering, data analysis, data science, and business analysis, to arrive at actionable intelligence and scalable growth solutions for businesses.
Perhaps you expected us to start calling out metrics and giving tips right off the bat, but what is data without context? Confusion at best, a disaster at worst; we do not want that for you.
This guide intends to shed good light on growth analytics processes. To understand the process, we first need to identify when, where, and why it should start before knowing how it should be done.
Why should you bother with growth analytics?
Okay, so here it is! Growth Analytics is the sense your business needs to navigate the competitive business space, just like we need our six senses [including the gut] to process the information around us for our safety, survival, and growth.
“If data is the fuel of growth, then analytics is its engine.”
Growth-minded business requires similar mechanisms and processes to understand the increasing complexities of the business space. This maximizes the mammoth volume of data available within and outside interest areas to attain some competitive advantage and accelerate growth. In practical terms,
- Analytics keep growth hackers honest
- Analytics make success repeatable
- Analytics predict the future
- Analytics measure movement towards your business goals (sales/retention)
Companies generate enterprise data across different facets, operations channels, marketing, sales, production, UX, customer support, finance, revenue, legal and human resource, etc.
How do you anchor analytics to strategy?
Growth analytics harnesses and consolidates these disparate data points. It does this by getting them from where they are to where they should be, synching and synergizing their strengths and unique business value, and querying them to extract insights for business and growth solutions.
Also, it would be best to prioritize growth analytics in your growth strategy and budget, as the ability to identify leading causal factors and tinker with them is guaranteed to improve performance over time.
It is about using the right metrics. Right metrics can change the way you look at things.
How to do growth analytics
For any business to succeed at growth analytics, the following should be considered accordingly :
1. Build Strong Data Foundation
Enterprise data maturity differs from company to company and is typically proportionate to the business age and data volume.
Building a solid data foundation requires close attention to how you prioritize data to measure, the naming conventions for that data, the engagement signals that data contains, and alignment between your collection practices, storage solutions, distribution techniques, and privacy policies. This will practically demand that you do the following:
- Identify your primary business and operations channels – where customers and partners interact with your business. Depending on your specifics, it could be primarily B2B, B2C, or hybrid.
- Decide on collection techniques and services.
- Find good storage solutions for your collected data. The best practice would be to adopt cloud storage solutions that will allow flexible and robust data management, optimizations, and easy distribution to consumption and production nodes like reporting and model experimentations.
- Adopt suitable analytics engines and strategies.
A good case scenario would be building a solid data foundation for your marketing, app user experience, and e-commerce sales data.
2. Define your business goals
The first step in effective growth analytics planning is to decide which business objectives your organization aims to accomplish.
Business objectives have measurable effects on the company; they affect Key Performance Indicators (KPIs) across growth pillars like acquisition, revenue, profit, and expense (directly or indirectly).
If these goals are undefined, you can’t plan meaningful data to track within your business data.
3. Data Mapping and Metrics Definition
Once these goals are defined, and outcomes understood, it’s time to map them to outcome-oriented data points in your already collected, stored, and organized datasets and sources.
Outcome-oriented data mapping and metrics selection should have corrective effects on building the data foundation.
For example, if your primary business goals are to increase average order size or frequency, reduce churn, and improve signup conversion.
You’ll need to measure Order Completed (with a property for revenue), an event like Login signifying repeat engagement, and Registration plus Completed Registration to measure the signup
funnel. Notice how it took just four events to measure three meaningful business goals!
It is advisable to define conversion logically to conform with real-world business logic. This way, your conversion events are sequentially designed to offer a diagnostic advantage.
This practice lets you troubleshoot your conversion and user journeys to discover causatives for excellent or poor conversion performance and ultimately have more control and understanding of your baseline processes like revenue and profit.
This framework allows you to achieve diagnostic analysis natively and avoid the easy bait of tracking vanity metrics.
Consequently, your solid data foundation with a flexible distribution mechanism allows you to effectively develop descriptive analysis to communicate processes and insights to stakeholders.
And finally, with the native diagnostic framework, it is accessible to develop and deploy predictive models to trigger real-time corrective actions on prompts for escalations by the designated teams.
An example is when a specific group of billing events consecutively fail within a defined session duration. These unsuccessful payment events can signal the CS team to zero in on the user to confirm the situation even before complaints tickets get logged.
Now that we are a step closer to understanding the growth metrics to track, here is a lazy list of essential growth metrics to consider, track and keep a good eye on your growth journey and performance.
Recommended Post: What is Growth Marketing?
Performance Marketing Metrics Tracking
1. Awareness & Acquisition
What percentage of your target and the broader market know your brand, offerings, and services?
And What portion of your online traffic and visitors can a lead magnet bring into your funnel?
– Cross-Channel Performance Ads Impressions
To understand where your brand and product are getting seen the most, the impression might be widely considered a vanity metric, but perception is usually the first persuasion for engagement.
– Ad Clicks
Tracking your cross-channel ads’ clicks will give you top-funnel insights into how users engage your brand.
– Click-Through-Rate (CTR)
This is the total number of clicks compared to total impressions. CTR directly reflects the approximate engagement rate you get from your performance marketing reach.
– Total Installs
Tracking your total installs at a granular level allows you to measure your top-level conversions and understand your channel performance and general acquisition efforts on paid and owned channels, but you must be sure they are accurately attributed.
2. Business & Product Engagement Metrics
– User Registrations
Tracking registered users is vital in developing first-party data for lifecycle marketing and indicates your sublevel conversions. This metric is also critical in calculating essential expense metrics.
– Engagement/Churn Rate
Based on your engagement criteria, this metric helps measure how well users engage with your product content and features and how many users leave your product before any meaningful engagement that might lead to conversions. Insights gathered from engagement metrics and behavior can be helpful for content optimizations and feature design to improve conversions.
– Active Users
Tracking the number of active users daily, weekly, and monthly is an excellent metric for a rough headcount of potential customers. This metric will also inform the number of active users the new updates might affect before rolling out.
Understanding user engagement metrics is crucial for retaining your customers and maintaining a loyal customer base.
By tracking these metrics, you can identify areas of your website that need improvement and adjust your website’s content, design, and user experience to improve user engagement.
3. Conversion & Revenue Metrics
Tracking conversion and revenue metrics is a tangible way to measure the value of your growth effort because for a business to be self-sustained, it must be profitable. The following are good fiscal metrics to track to understand the baseline impact of growth activities.
– Active Users
This is a growth metric that measures how many users are currently engaging with your product or service over a specific time period, such as daily, weekly, or monthly. Tracking active users is an essential metric for businesses to understand their customer base and potential market size.
This metric can also inform the impact of new updates on user engagement before rolling them out. It is important to note that active users should be defined according to your specific business needs and goals.
For example, if you offer a subscription-based service, an active user may be someone who has logged in and used the service at least once in the past month.
However, if you offer a one-time purchase product, an active user may be someone who has made a purchase within the past week. Measuring active users can provide valuable insights into customer behavior and help identify trends or patterns in usage.
By analyzing this metric over time, you can better understand how user engagement changes based on different factors, such as new feature releases, marketing campaigns, or seasonal trends.
This information can then be used to inform future business decisions and growth strategies. Overall, tracking active users is a crucial growth metric for businesses looking to understand their customer base and improve their engagement and retention rates.
– Total Revenue
Knowing the number of sales ad money your business made per time is vital to calculate profitability. It is needed to plan and manage the expense. Fiscal health is often the lifeline of many companies, and tracking it and the processes directly affecting its performance is crucial.
– Average Revenue per User (ARPU)
This metric tells you how much each user spends on your product or service.
– Lifetime Value (LTV)
This metric tells you how much money a customer is worth to your business over their lifetime.
– Conversion Rate
This metric tells you how many website visitors convert to paying customers
Understanding revenue metrics is essential for growing your business and increasing your profits. By tracking these metrics, you can identify areas of your business that are underperforming and adjust your pricing, marketing, and sales strategies to increase revenue.
Good Read: Conversion Rate vs Click Through Rate
4. Expense Metrics
Tracking cost and expense metrics helps your business and operations to stay in touch with economy and industry realities, as this will help you know where your money went and what it achieved.
With your expenses tracked and adequately attributed, you can compare them to industry benchmarks to understand how you manage your operations costs optimally.
Tracking useful expense metrics also offers vital input to efficiently determining how best to scale your marketing and growth investments.
The following metrics are important metrics for tracking expenses.
– Total Ad Spend
Tracking ad spend across different ad networks down to the campaign level helps you know the cost of your successes and experimentation and decide ahead of the next budget how much should be designated based on performance and baseline impact.
– Customer Acquisition Cost(CAC)
There are many moving parts to arriving at the actual value for CAC depending on your acquisition campaigns and operations, but the following are to be closely considered Cost Per Click, Cost Per Registration, Cost Per Install. How you prioritize these metrics depends on your growth objective per time and should be subjectively considered to suit the needs of your business.
– Cost Per Click (CPC)
This measures the money spent on each generated click from an advertisement. This metric is widely used in digital advertising and is an essential indicator of ad campaign effectiveness.
– Cost Per Registration (CPR)
This is the total cost of acquiring one registered user for a product or service. This metric is widely used in digital advertising and is an important indicator of the efficiency of acquisition campaigns.
– Cost Per Install (CPI)
This refers to the expense of acquiring a single installation of a mobile application. This metric is commonly used in mobile app advertising and is an important indicator of the cost-effectiveness of acquisition campaigns.
4. Retention & Loyalty Metrics
– Churn Rate: This metric tells how many users leave your product or service after signing up.
– Retention Rate: This metric tells how many users return to your website after their first visit.
– Referral Rate: This metric tells how many users refer your product or service to others.
– Segmentation & Cohort Insights: Setting up customer segmentation
Tracking these metrics sets helps you gain a comprehensive view of your business performance and identify areas for improvement. And regularly reviewing your metrics and adjusting your strategy will ensure continued growth and success.