Delighting your customers is the purpose of your business. When your customers are engaged and satisfied it reflects positively on your bottom line.
To unlock what makes your customers smile, data tracking is the key. From answering what channels most effectively bring in customer acquisition to what pricing page drives more sign-ups, tracking data can answer the questions that matter to your business.
But what is data tracking? How does it work? To make sense of what data is important and what tracking methods to use, here are the 6 steps for creating a successful plan.
What Is Data Tracking?
Data tracking is the process of collecting, analyzing, and organizing data about customer behaviors to help inform business decisions. By understanding what customers are doing, what they are interested in, and what drives them to purchase, data tracking gives insight into your strengths and weaknesses. With that data, you can plan what strategies are most likely to bring success.
Data tracking is essential to any business as it delves into what matters to customers. This data helps you determine what tactics are worth investing resources in and what ones should be abandoned. Hence, it helps you bring a more personalized, tailored experience to your customers that they will be sure to love.
How Does Data Tracking Work?
Data tracking is a systematic process that involves data collection, analysis, and reporting. It works in the following manner:
Data Collection
The first step is to collect data from customers through surveys, interviews, website tracking tools, and other methods. For example, website cookies can track what pages customers visit, what items they add to a basket, what product categories are most often explored, and other behavior.
Data Analysis
Once data is collected, the next step is to analyze what it means. Through analytics tools such as A/B testing, regression analysis, and cohort analysis, patterns in customer behaviors can be revealed.
Data Reporting
Finally, the data is reported to relevant stakeholders to make decisions. The data can be presented in the form of graphs, charts, or other visualizations to make it easier to understand what is happening and what should be done. There is a wide range of data reports that can be generated, such as recommendation reports, feasibility reports, and KPI reports.
How To Create A Successful Data Tracking
Creating a data tracking plan is important to make sure that you are collecting the right data, analyzing what’s important, and reporting on what matters. Here are the 6 steps for creating a successful plan:
1. Data To Track
Begin by identifying what metrics you should be tracking. It can involve their demographics such as their age, gender, and location. Or it can include their behaviors such as their activity, purchase history, what campaigns are working, what your user’s journey looks like, and more. Knowing the data you will track will save you time and energy in the future.
2. Where You Track The Data
Now that you have identified what data to track, you need to determine where you will track the data. This can be on your website, app, or through third-party tools. It is important to decide what data tracking tools you will use so that you can ensure that all the data is tracked in one place.
3. Data Tracking Reasons
The next step is to determine what you want to track the data for. Data tracking can be used to measure customer satisfaction by collecting either positive and negative feedback, spot trends in customer behavior, and learn what tactics are effective. Knowing your reasons for collecting data will help you prioritize what data to focus on.
4. Set Objectives
Once you know what data needs to be tracked, what tools to use, what reasons you need the data, and what tactics are working, it’s time to set objectives. Objectives provide a roadmap of what to achieve with your data tracking plan.
5. Identify Actions To Track
Now that you have identified what data needs to be collected and what objectives to track, it’s time to determine what actions need to be tracked. This could include what pages customers visit, what content they like, what products they buy, and what channels they use to get information. Knowing what actions you will measure will help you make informed decisions on the back of data tracking.
6. Set Up A Data Tracking Model
Once you have determined what data needs to be tracked, what tools you will use, what objectives to track, and what actions need to be taken. It’s time to set up a data-tracking model. This involves setting up processes for data collection and analysis.
Utilizing different software tools such as analytics software and customer relationship management (CRM) software can help you set up a data tracking model that works for your business. Once the model is in place, it becomes easier to identify what data needs to be tracked and what decisions can be made based on that data.
Data tracking is an invaluable tool for businesses to get insight into what their customers are doing and what they need. With the right plan, you can get to know what makes your customers tick and what tactics you should use to drive success.
You Should Take These Metrics Into Consideration
Data tracking is only as good as what data you are collecting and what metrics you measure. Taking these metrics into consideration will provide the insights necessary to make decisions.
Acquisition
The acquisition includes understanding your campaigns’ effectiveness in acquiring new customers. The metrics you should be monitoring are:
- The growth rate of new users
- User attribution (knowing where the user came from)
Activation
The activation includes what happens after the user signs up or makes a purchase. The metrics you should be monitoring are:
- Total users
- User activation rate
- Active users
Retention
At what point do the users come back and what can you do to encourage them to stay? Or do they stay at all? The metrics for this stage are:
- Churn rate
- User satisfaction (NPS)
- Engagement
What Is Your Customer LTV?
Customer lifetime value (LTV) measures the total revenue a customer generates over the lifetime of their relationship with your business. The formula for this metric is total revenue – customer acquisition cost = LTV. The metrics you should measure to calculate LTV are:
- The average revenue per customer
- Frequency of purchase per customer
- Time to pay back customer acquisition costs
Will This Variant Of The Pricing Page Drive More Sign Ups?
Pricing page view to signup conversion rate will help you understand how well your pricing page is performing in terms of what actions customers take after they land on the page.
By tracking customer behaviors, you can make well-informed decisions on what tactics are working and what needs to be changed. You can run A/B tests on the pricing page to compare different versions and what works best for your customers.
For this query, you should monitor:
- Pricing page view to signup conversion rate
Helping Businesses Reach 8 Figures In Annualized Revenue
Data tracking is not a one-time task – it’s an ongoing process that needs to be monitored regularly. By understanding what data to track, what metrics to measure, and what decisions to make, businesses can reach their 8-figure revenue goals faster using data tracking. Utilizing tools, processes and models can help businesses acquire customers, retain them and increase their lifetime value.
Don’t underestimate what data tracking can do for your business. We at 8 Figure Agency, believe data tracking is what separates the companies with 8-figure revenues and those that don’t. Contact us today to learn more about how data tracking can help you reach your 8-figure goals.
