Meaghan Connell and AJ Yager, the Co-founders of Praxis Metrics, jumped onto The eCom Ops Podcast to share the importance of data in eCommerce, tips on increasing growth and their biggest focus. Check out all the other episodes here.
To learn more about Meghan, AJ and Praxis Metrics:
How did AJ and Meaghan they start their journey?
Aj Yager and Meaghan, the co-founders of Praxis Metrics, started from an agency background and found their way into the marketing side. While working in an agency background, they realized that they needed data in real-time instead of logging into an extensive procedure. It was too time-consuming and a lot of money. They created a data agency which makes a data outsourcing team for other companies who are interested in scaling. Five years ago, they started this data agency and had helped hundreds of brands, including the small businesses which mostly need help with scaling.
What made them leave marketing
They saw the need for scaling when they saw employees spending too much time on sheets and wasting time. They started thinking of solutions, and as soon an opportunity came, they acted on it quickly. There are not a lot of data scaling companies, and the ones that do exist are very expensive, starting from thousands of dollars. There are a lot of tools that have been introduced in the past but people mostly don’t know how to use them.
Importance of data in eCommerce
Meaghan talks about their clients who have set goals which vary accordingly. The specific questions which these days are about the COVID 19 situation and how it will affect their business. This helps them understand where they should spend more money and where not. So Praxis Metrics takes translation level data, internal and external client data to help the businesses.
Nowadays everybody is trying to compete with Amazon, so they think we have to offer free shipping. Praxis Metrics looks into those customers who used the free shipping and checks whether they came back to shop or not. And something that works for one company might not work for another. Every company suffers from terminal uniqueness, and every single company is not the same. It is important to collect data to see what works and what doesn’t.
What separates the winner from the rest?
Meaghan talks about the humbleness of the team to understand that as you are growing and scaling, the questions you ask are not going to be the same. The depth of your questions should increase, you should have a follow-up question to that answer. All of the founders who go out of their business with curiosity end up winning, so they don’t rely on the information that they currently have; it is constantly evolving. Some companies say that they have nothing new to learn, which is not the right approach to things. It is about who adopts these principles and starts investing in data.
What should be the biggest focus for an eCommerce business?
Understanding what the key movers in your business should be the biggest focus. The things that create the most impact. Things that will move the needle and will value your business. So, revenue, profitability and cogs are the important values. The ratio between the lifetime value of your customers and customer acquisition cost holds its due importance. All you need to do is to calculate this ratio for your business and keep the tracking in a set because tracking the right data is the biggest thing.
How to increase growth?
There is a data maturing spectrum which starts with data collection, and then people get into spreadsheets. Number one thing is tracking if you don’t have any knowledge of data. After which there is manual aggregation where you log into systems and extract important things which lead to telling a story using the data. If you are not looking at these things, you won’t be able to manage it. For big companies, the next step is automation leading to exponential growth.
Importance of automation in eCommerce
Automation is the key to scaling. At some point in the business, it becomes very difficult to do these calculations manually, especially when the data becomes outdated. Praxis Metrics has clients who have been able to give numbers in real-time, and they have seen changes even though it has cost them money. The benefit of automation is that it will save you time and helps you focus on the important focal points. It filters and eliminates a lot of noise.
Who has taught you the most in eCommerce?
AJ Yager talks about his old business partner and friend;
For Meaghan, it is two clients who have taught her the most;