Every business needs to be monitoring payment analytics. Whether they’re a young SaaS startup entrepreneur or a seasoned eCommerce owner, using Stripe and/or PayPal, payment analytics should be at the forefront of every business operator’s mind.
Monitoring payment analytics gives operators valuable insight into understanding their customers, their financials, and the health of their business. Yet starting out monitoring can seem tricky. Where should businesses begin and what are the implications of not keeping a firm hand on payment analytics?
Define your business goals
You wouldn’t steer a ship without a map, so why would you run a business without goals? Goals are something that a business intends on achieving and could be as large as “become the SaaS business with the most subscribers in the world” or as small as “gain our first ten subscribers.”
Most realistic business goals are segmented into service, social, profit, and growth — each with their own resonance to the business. For example, a social goal could be to give something back to the local community and a growth goal could be to expand into the European market.
Defining business goals at the offset of payment analytics monitoring allows operators to have an active measure of success and will give both them and their employees a motivational insight into their business. Business goals are also an opportunity to create (or revisit) a company’s vision. By having your business goals fresh in your mind, it makes payment analytics monitoring more focused and succinct.
Define your business objectives
If defining a goal is the route your ship takes, objectives are the checkpoints on how to get there. Objectives differ from goals because they are often measurable and more specific, for example, decrease churn by 3%, increase monthly recurring revenue (MRR) by 5%, or grow and scale your business into a new market or introduce a new product line.
A common method when defining business objectives is to use the S.M.A.R.T. filter — an acronym that stands for Specific, Measurable, Achievable, Realistic, and Time specific. For example, “generate more business” is the goal and “use email marketing heavily toward warm leads and increase conversion rates by 10% inside the next quarter” is the objective that leads to reaching the goal. This objective example hits every point on the S.M.A.R.T. filter and can now be used as a jumping off point for the next stage: defining data.
Define your data
Because you’ve created and defined your business objectives, you’re now able to source and pick which analytics will need specific monitoring to achieve that objective. Think of data as the navigational monitoring that helps your ship plot its course — without it, you’re unable to make decisions that are based on fact and findings. Should you follow the coast? Or is there a coral reef there? Not knowing this information could ultimately lead your vessel into murky waters.
Let’s say that you’re the CEO of a young SaaS startup. Your objective for the following quarter is to reduce churn by 2%. Analytics that will need to be monitored regularly includes customer churn, customer lifetime value (CLV), and customer acquisition cost (CAC). Similarly, if your objective was to understand your customer better you might fiercely monitor average revenue per user (ARPU) or CLV.
Think about where you will obtain your analytics data from. Are you able to have instantaneous access or will it take the work of dev and marketing teams? Identifying the reports and systems needed to monitor analytics is key to measuring and analyzing the right data.
When you understand payment analytics — customer churn, MRR, ARPU, CLV, etc. — your are in a better position to make educated and informed decisions that positively impact your operation. And without payment analytics monitoring, chances are you’ll be steering your ship blindly into the night.
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