Death by data: Numbers are killing your business

by Steli Efti

"When we let data drive our marketing, we all too often optimize for things that are easy to measure, not necessarily what matters most." — Ezra Fishman

Too many startups focus on the numbers, rather than the people behind the numbers.

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Forget about automated reports and real-time dashboards for a moment. Because there are so many crucial elements to the success of your startup which can’t be quantified.

Let’s talk about why you shouldn’t be too focused on the numbers and how to find a balance between quantity and quality that will set you up for success.

Meaningless numbers

Every user interaction that happens on our websites and apps can be tracked, quantified and analyzed. As a result, many startup founders have an unhealthy fascination with data, metrics and analytics.

They think all these numbers contain the answers to the mystery of business success.

They don’t.

So you have your churn rates memorized, your cold calling metrics on display for the sales team, and a daily email with your trial conversion rates?

Great.

Now ask yourself: Are you actually doing anything with that data? Does it actually mean anything to you?

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Without context, numbers are useless. If your data isn’t translating into action, your metrics are a waste of time.

Lack of context

Reports, real-time dashboards and one-on-one observations all serve the purpose of gathering data. But there’s one vital difference: When you talk to your customers in person, your data has context, and context completely changes the story your data tells.

Make customer visits and customer calls a priority in your startup, whether you have 10 customers or 10,000—make sure you talk to users during all stages of product development.

A first-time user will have a very different experience to someone that’s been using your product for a year. But in order to develop a product that generates true value, you need insight from both.

Lessons from Pinterest: People before metrics

Back in the early days of Pinterest, way before their $5 billion dollar evaluation and before anyone knew what “pinning” was, founder Ben Silbermann spent his days in coffee shops, turning strangers into beta testers.

Silbermann would approach people and ask if they’d be interested in trying out his social website. Then he’d carefully watch how they interacted with Pinterest and take note of their activity, body language, and facial expressions.

If they seemed particularly frustrated or entertained, Silbermann would ask questions about their experience to better understand what was going on. At the end of each session, he’d have a wealth of data he never would have gotten from a dashboard or a spreadsheet.

There’s more to UX than just clicks and conversion rates. If you really want to understand how customers are using your product, you need to sit down with them while they use it.

Finding the balance

Knowing your data and knowing your customers are not the same thing. Your data needs context, and you can’t get context without human interaction.

But before you start talking to your customers, make sure you’re tracking the right metrics. Your metrics should:

  • Correlate to your overall business goals, e.g. increase MRR by 15%.
  • Have goals attached to them, e.g. add 200 new customers per month.
  • Have an action assigned to each metric, e.g. bring in more qualified leads.

Once your metrics have been set, it’s time to start talking to your customers to put those numbers into context.

Because when you do, you’ll discover how you can move your leads through the funnel and start moving your numbers up.

Now go get'em!

Recommended reading:

SaaS sales: Why you need to call every trial signup user within 5 minutes!
Calling trial signup users can be demoralizing but there's an easy yet powerful way to massively improve the success of your phone outreach. Learn how calling within 5 minutes produces incredible reach and conversion rates.

Why startups need to visit their customers
Is visiting customers valuable for startups and SaaS companies? Yes, it's crucial and this is how you and your business will benefit from doing it right.

Why you need to call your churning customers (and how to do it right)
Your churning customers can your greatest teachers. They were once willing to pay for your product or service but something pushed them to cancel their contract. Here's how you can learn from them in order to build a bigger, better SaaS business.