Improved data tracking, trend measurability and ultimately the ability to obtain deep insight about customers, were among the priceless gifts of the mobile era to businesses. This was quickly realized and capitalized on. A handful of companies managed to jump ahead, with the advantage of using data, against others who were too slow in adopting the approach.
Today however, the data-driven approach is so widely spread, that simply ‘using data’ is no longer a true advantage on its own.
The importance has shifted onto the why’s & how’s — with only the most effective data approaches looking to shine through, in the long term.
What type of data should you use?
The three types of data described below are deliberately not listed in order of importance, because each of those should play a key role in your decision-making and strategy design. Failing to use either of these leads to missing out on vital synergies regarding data interpretation and its subsequent use:
User data provide essential metrics to create an illustrative snapshot of your performance. It will also reveal any implications of internal changes. Though behavioural user data will tell you what happened to your app yesterday, it will not necessarily tell you why, nor what it means in the context of your business and the wider competitive landscape.
In other words, user data is essential to track metrics that influence your KPIs — but to design KPIs effectively in the first place, market data and consumer data is crucial to contextualize your user data.
Market Data and the importance of benchmarking — market research should start long before product development and continue thereafter. It allows you to set and manage expectations of your future business performance. After launch, market research becomes essential to benchmark your performance against the rest of the industry.
Consumer Data (behavioural and attitudinal): is the third major pillar to an effective piece of the insight puzzle. Its importance stems from being the only data source that can tell you who your users really are and how they differ from other consumers. Being familiar with mobile behaviour and attitudes of your users, outside of your app, is vital to identify opportunities and threats early. Consumer data is key for optimizing marketing campaigns, monetization models, as well as increasing retention and building loyalty.
Using Data Effectively
Use quality data since (before) the start: App developers often assign secondary importance to Market and Consumer Data compared to User Data. In reality though, the former two should be in use long before user data even becomes available. Market and consumer data in tandem should be the main decision drivers of your business plan design and subsequently, early product development. The more accurate your predictions, the more appealing product you’ll be able to build.
The risks of DYI (*unless you really have the time to be thorough): Given the budget constrains of small and medium size app businesses, developers often result to compiling market research and consumer data themselves from publicly available sources.
While this may save some money in the short-term, it can lead to trouble further down the road. It is due to inaccuracies, which are likely to trickle into the assumptions, unless you have seasoned researchers or analysts on your team and a considerable amount of time. For example, to size the market for mobile video views, you could harvest the latest data reported by the big companies. But unless you note that a view is counted after 30 seconds on Youtube, 3 seconds on Facebook and only a millisecond on Snapchat, you will end up with a significantly inaccurate estimate.
This example is just the tip of the iceberg though. Each study, metric definition or forecast has its own methodology and set of assumptions, which may or may not be sufficiently aligned with your research needs. While it is true that some of the large research and data companies may be out of financial reach in the early stages, affordable quality solutions do exist and are worth exploring in terms of both, Market Data and Consumer Research.
Don’t deviate from internal focus on metrics that are important to you, for the sake of others: The business performance and progress of apps is continuously monitored by a variety of stakeholders, each of whom are interested in a different set of metrics to validate and evolve their opinions about the business. This includes the press, existing investors, future investors (VCs) etc.
An app business needs all these stakeholders on its side, so complying to track and report these metrics as appropriate is understandable. However, it is important to remain conscious of treating this type of data separately from what you are tracking to achieve your strategic goals.
Simply put, it is because the data you communicate externally is aimed to make you look good. However, it’s the problematic metrics you should mostly focus on internally, to improve business performance. There is pressure on developers to keep all these stakeholders on their side. Therefore, they invest resources to track and maintain growth of ‘vanity metrics’. This creates a risk of over-concentrating on them, instead of focusing on data that is actually crucial to their individual business case.
Written by Karol Severin, Analyst @ MIDiA Research
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