How Four Key Principles Built a Data-Driven Company
Anthony Thomas is the co-founder of a company called Sticker Mule, which he runs using four core tenets:
- Build a metrics-driven culture from day one
- Focus on a core group of metrics
- Make performance data available company-wide
- Fix what’s broken
Notice a theme here? These pillars all revolve around the importance of metrics. By defining these principles, Sticker Mule makes sure their business decisions are backed up by the numbers, maximizing the probability of success.
1. Build a metrics-driven culture from day one
Anthony feels a lot of businesses view data as a luxury, but he sees it as a necessity. When you only sporadically require employees to make data-driven decisions, you don’t set the right precedent for how decisions in general should be approached. Anthony believes “the sooner you establish a focus on metrics, the better. People get used to them. If the process is there early on, it becomes part of who you are and how you grow.”
Research supports that this relationship to metrics – where data is embedded in how a team works – has strong impacts on revenue. An Aberdeen study found that data-driven organizations experience 27% year-over year-organic revenue growth; a huge jump from the 7% growth reported from the rest.
2. Focus on a core group of metrics
“Using metrics is a bit of double-edge sword,” warns Axcient CEO, Justin Moore, “because it can just as easily send you off track as it can bring you greater focus. The key to effective measurement is knowing what to measure.” This practice of identifying the metrics that matter most, and focusing only on those metrics, is one that Sticker Mule adopted from day one. At the beginning they were focused on one thing, sales. And their three core metrics reflected that focus:
- Annual Revenue
- Year-Over-Year (YOY) Sales Growth
- Customer Acquisition Cost (CAC)
That’s it. Three metrics measured the success of their efforts. “We weren’t tracking things like Twitter engagement,” Anthony says, “we only cared about the metrics that were core to our company’s business goals.”
As their team grew, so did the list of metrics that individual teams needed to track. “When you bring more people on, you introduce new metrics that are relevant to their roles,” Anthony said. Eventually their metrics grew to include manufacturing (quality and turnaround time), customer support (number of tickets closed), and marketing (new customers acquired). At each stage, the team was only adding metrics when they were confident they could dedicate the right amount of attention to each key performance indicator.
3. Make performance data available company-wide
Once Sticker Mule established their KPIs, they made sure anyone from any department could check in on their status. For example, a marketer can see how many customer support tickets have been closed, and an engineer can check out how many new customers were acquired over the past month. What’s the result of this transparency? “Everyone can see how their efforts are making a difference,” Anthony explains, “and it inspires us to keep working on it. It’s human nature to want to see those numbers improve.”
Because the entire Sticker Mule team has access to a dashboard with graphs plotting the company’s core metrics, there’s not only a sense of alignment and collaboration, but the data is worth more because more people can derive value from it. Gail Dutton says it succinctly in 5 Steps To Building A Data-Driven Culture, “unless data is communicated across an organization, it becomes worthless.”
It’s this communication and transparency that Anthony believes is the best part of building a metrics-driven culture, “being able to see the outcome gets everyone excited about trying new strategies.”
4. Fix the things that are broken
Building a metrics-driven company always comes with the risk analysis paralysis. More information can lead to easier and better decisions, but it can also lead to over-analyzing and perfectionist behavior.
One strategy Anthony has found to avoid analysis paralysis is to encourage action. “We don’t need to run experiments to figure out what to do,” Anthony says, “we know what’s not working.” Sticker Mule is constantly trying to improve print quality, get artwork to download faster, and create tighter processes with partners. They know fixing these areas will have a positive impact on the customer experience, and in turn improve retention and revenue. There’s no reason to obsess over the data, just fix what’s broken.
These incremental changes add up. For Sticker Mule, focusing on accumulating wins resulted in the reduction of their turnaround time from 5-6 days down to an average of 72 hours. “There was no big fix,” Anthony says about this incredible achievement. “It was just constant hard work from our entire team, correcting tons of small problems.”
The tech to run a metrics-driven company
If you’re interested in implementing an approach like Anthony’s, you’ll need to put some technology in place to support that:
- A central data warehouse: a central data warehouse will be the home for all your disparate data sources (i.e., Shopify, Google Analytics, Zendesk).
- An analytics platform: an analytics platform will sit on top of your data warehouse and allow you to easily interact with data. You can build metrics, reports, and dashboards. All of which will update automatically. This is what makes it so easy for everyone on the Sticker Mule team to stay aligned on current performance.
RJMetrics CloudBI (which Anthony uses) can take care of both of those things for you. If you’d like to learn more, you can get started here.
Daniel was born in Maplewood, NJ and graduated with an English degree from the University of Delaware. He now lives with his girlfriend and his dog in Philadelphia where he's a Content Marketer for RJMetrics, a cloud-based data infrastructure and analytics platform.