It’s never too early to figure out what the most important aspects of your business and how the data you create (or will create!) maps to your business.

If you’re early in your analytics journey, we’d love to help you think through your data strategy, you can book a 30 minute session with one of our cofounders here 🔗

Having knowledge of a few of the concepts will allow you to build a more data driven culture today and help make sure that future work is improving on top of a well-designed framework.

The major parts of business data

Dimensions

Dimensions are the major entities and features that represent your business such as customers and plan types. In data terms these are tables or fields like customer_id and plan_type.

• Documenting dimensions helps your team think about what parts matter to the business. Keeping dimensions in mind helps the technical teams, such as engineering and product, be able to build and improve the infrastructure behind the applications and data systems powering a business.
• Metrics can be quickly sliced and diced by the dimensions, allowing teams to look through the impact that parts of the business are having. For example, if there are free and paid users, the new user count increasing can be quickly split into the free vs paid dimension where additional insights may be found.

Metrics

Metrics are the numbers that have business meaning and are tied to business success. There are some common metrics that every business has to track, such as the financial metrics revenue, cost and profit. As companies create differentiation from each other, they have to build tailored metrics that map to the concepts that their business is introducing. These include ideas like the average revenue per paying user (ARPPU) metric that a freemium business model uses to track monetization or the time to delivery for an ecommerce company.

There are a few things to keep in mind when thinking about metrics

• Only use metrics that apply to your company. There are a lot of resources available that will share metrics that are the keys to success. These generalizations can lead to oversimplified systems that will produce more frustration than business results. Make sure that the metrics you are creating will drive business outcomes. We’ve got a lot of content on metrics here.
• If there are specific priorities, focus on the metrics that relate to the priorities such as focusing on specific key results to achieve an objective with the OKR framework. By putting attention on a few metrics, they become more meaningful and can often drive much faster, better results. Be wary that the company doesn’t over-optimize and put other metrics in danger. There’s more written about being aware of tradeoff metrics in our article here.
• Allow everyone to have metrics that matter to them. Companies often misattribute the importance of a metric to how closely it ties to business success and thereby only focus on high-level metrics like number of new customers or total recurring revenue. One area that will allow data teams to build in the next frontier of metrics is to create metrics that are tailored to specific teams and people, such as a support team’s first response time or median time to resolution. The more closely the metrics tie to the team’s success, with the team’s success having been strategically thought out and tied to overall company success, the more actionable those metrics will become for that team. This

So what can you do today

Start creating a flow diagram of how your business works from a data perspective. You can find more about creating metrics frameworks in our post here. Having something written down and shared, even if it’s a simple business equation, will help everyone connect on the metrics that matter most. This diagram will evolve and grow with your business. Putting in the intentional effort early will make it much easier and produce results much faster so why not start today!

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