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At the most recent Southeast Magento Meetup, discussion focused on this year’s Imagine conference. Most notably, the future of Magento Business Intelligence and why using data to make decisions is important.
To recap, during 3rd quarter 2016 Magento acquired the cloud-based analytics platform RJ Metrics to integrate with Magento stores and provide merchants with ecommerce business intelligence. The goal is to help merchants translate massive amounts of data into insight, which is undoubtedly a problem as per a recent Forrester Research report, only 29% of merchants say they are good at translating data into measurable business outcomes. Meaning about 71% of merchants struggle to make sense of all the data available to them and/or incorporate data-driven decision-making as a part of their culture.
But why is it important to have a data-driven culture in your organization and how can merchants become adept at translating data?
There are numerous reasons that organizations should have a data-driven culture:
• Data allows you to challenge all assumptions.
• Continuous organizational improvement by making smarter decisions.
• Increase efficiency of resource allocation by narrowing focus.
• Empower individuals to confidently manage themselves.
Instituting a data-driven culture does not come without challenges of course, such as:
• Lack of organizational cohesion: some prefer to make decisions with their ‘gut.’
• The belief that more time will be spent gathering data than making decisions.
• Messy and unorganized data – who will spend the time parsing through it?
So how can merchants overcome these common challenges and become proficient at translating data?
First, everyone must be on the same page within the organization – all members must understand the importance of using data to make decisions. It’s also imperative to realize that ‘gut’ decisions and data-driven decisions AREN’T competing concepts. Experience allows managers to use their ‘gut’ to make decisions at times, however, data can help to confirm or contradict that gut feeling which is useful.
Additionally, merchants should realize and accept that too much data can be a bad thing, it is not necessary to have ALL the data that you can possibly have. A useful tip for deciding which data sets you should focus on is to segment your data into macro and micro distinctions and then select a handful of metrics at both the macro and micro level to focus on.
• The macro metrics should provide a big picture view
For example, a clothing store may be concerned with the Average Order Value of their coupon codes.
• The micro metrics should help you unlock decision making at all levels
For example, a merchant may look at the value derived from their different social media platforms.
To increase efficiency you can also assign certain metrics to specific members of the organization to avoid overlap and to narrow focus. Employees in the marketing and order fulfillment departments are concerned with completely different things. So to avoid confusion a dashboard with only marketing-related KPI’s could be created with permissions granted to ONLY those in the marketing department so that those employees can focus only on the metrics that pertain to their job function.
Continued practice following these guidelines will approve the ability to make sense of data over time. By having the right team members using the right data at the right time, the transition to a data-driven culture will feel more natural and helpful than inconvenient and forced.
Our next blog will discuss Magento’s Business Intelligence platform in-depth and outline how you as a merchant can take advantage of the platform to make smarter decisions.
– Orvin Moore, Analytics Manager