The 4 Scariest Data Questions
That Keep CPG Founders Awake
When you’re first getting your CPG startup off the ground, it’s a super exciting time!
You’ve got a game changing product idea that’s starting to catch fire. And the world is starting to feel like your oyster. But suddenly, there’s a sharp spike in the volume and complexity of the questions nagging at your brain. You find yourself thinking deeply about your company’s data for the first time. But all the data & analytics questions are starting to feel dizzying. You just want simple answers, so you can focus on growing your company and conserving cashflow.
But there’s a particular set of scary questions keeping you up at night…
1) Which Metrics Should I Be Focusing On?
Figuring out the right metrics for your CPG brand to focus on is crucial. The Key Performance Indicators (or “KPI’s”) that you choose are going to depend heavily on what type of CPG company you are. Whether you’re a purely direct-to-consumer (DTC) brand, a subscription-based DTC brand, or a brand that sells through affiliates and brick-and-mortar stores like Amazon or Whole Foods.
Each type of CPG company has a different set of KPI’s that matter. And in many cases, most successful CPG founders heavily customize their KPI’s to account for the unique way their business runs.
Assuming a CPG company is marketing on paid media platform like Facebook Ads, Google Ads, or VidMob Ads, they might start by measuring their individual ad campaigns. In this case, their often looking at CPM (Cost per 1,000 Impressions) to understand the basic cost of their ads, CPV (Cost per Video View) to understand how long customers are watching their videos ads, or CTR (Click Through Rate) to understand whether the ads are converting to clicks to their websites.
Many founders quickly evolve beyond pure marketing metrics, since they’re only a small part of the story. CPA (Cost per Acquisition) and CAC (Customer Acquisition Cost) are the general standard-bearers for measuring how many marketing dollars are needed to create a single sale. Unfortunately, CPA and CAC costs have been skyrocketing the last few years, placing enormous pressure on brands to find more and more efficient marketing techniques. It’s also put a premium on loyal customers who buy from your brand more than once. Understanding how to keep your average LTV (Life Time Value) of an average customer high, how to keep your Churn Rate (Rate of Customers Who Cancel) low, and how to eventually achieve NNC (Net Negative Churn) are extremely important. In many cases, investors are looking almost exclusively at things like your LTV:CAC Ratio or your projections for achieving NNC.
Many investors and CFO’s are much more focused on basic Margins, but the type of margins you’re monitoring may vary greatly. Net Margin is obviously important, but investors keep a very close eye on COGS (Cost of Goods Sold) like your employees or suppliers, or CAC like your aggregate marketing costs, because these “Unit Economics” costs are often fixed or very hard to move once a business is established. Understanding what these numbers are, and how they vary between SKU’s, geographies, or demographics can be make or break a young CPG company’s ability to grow.
As a CPG founder you may already feel like you’ve got a handle on which metrics matter to your company. However, as the number of data platforms you use starts to proliferate, you’re often faced with an even scarier question….
2) Why Do My Different Platforms Show Me Conflicting Numbers?
Different platforms showing conflicting numbers is an extremely common problem. And a very frustrating one. You might see Facebook Ads claiming that you made 100 sales one day. And Google Ads claiming you made 50 sales. But Shopify might only shows 125 sales, not 150 sales (100+50) . Why are those numbers different? Did 25 sales get lost? Are Facebook and Google both claiming credit for the same 25 sales? Or is the answer even more nuanced than that?
Or maybe, your new Salesforce CRM shows 1,000 customers. But your old Mailchimp Email list shows 5,000 customers. So what’s your total customer count? Is it 1,000 Salesforce + 5,000 Mailchimp = 6,000 total customers? Does Mailchimp’s 5,000 customers include all of Salesforce’s 1,000 customers, making it 5,000 total customers? How many of those records are customers with 2 or 3 different email addresses? Does that make it 4,000 total customers?
Addressing these questions is generally 1 of 3 things:
Data Cleanup: Old or unmaintained data sets tend to drift apart from each other. Records get deleted. Records get copied multiple times. Performing occasional spring cleaning on data sets is an important step.
Platform Integration: Sometimes platforms aren’t set up correctly to talk to each other, and data gets lost when it jumps from Facebook Ads to Google Analytics to Shopify to QuickBooks. Getting this reconnected is an important step.
Attribution: Ad platforms constantly fight each other for credit. Sometimes more than one will take credit for a sale. And sometimes multiple of them rightly deserve credit for part of the sale. After all, different ad platforms generally work in tandem to create sales. Determining how much credit each platform deserves for a sale is another important step.
Why Can’t I See All My Data In One Single Dashboard?
Having to log into multiple platforms to get answers is major hassle. As we mentioned above, it can often lead to perplexing answers. But getting all your data in a single dashboard sometimes feels like an insurmountable task.
Do you use one of the many off-the-shelf SaaS platforms like Datorama or Daasity in the hopes that it works exactly how you need it to? Do you leverage a free tool like Google Data Studio, and spend time downloading dashboard templates and importing data yourself? Do you stitch together a “Modern Data Stack” with tools like Fivetran, Snowflake, and Tableau and manage the technology stack yourself? Do you need a tool like CRISP that specializes in brick-and-mortar data sources like Whole Foods, Target, and Walmart?
Answering these question is an important first step, and the answers depends highly on your company’s use case.
4) I’m a CPG expert, not a Data expert. Who can help me out here?
You’re a domain expert in consumer products, not in data science. And as sexy as data science might seem to some, most founders just aren’t interested. They’ve got a million things to think about with their brand, their product, their supply chain, their employees. Reckoning with nuanced data solutions is just not the best use of their time.
So how do companies find the right partner to help them with their data questions, without breaking the bank during their early founding years?
** This is exactly why we created Latticework “Data Boot Camp”
Latticework “Data Boot Camp” is a 2-week crash course on how to get value out of data. It’s a brand new offering that helps founders from the StartupCPG community get all their data organized, cleaned up, and built into real-time reporting dashboards with all of the important metrics to drive their business. So instead of your data feeling scary & overwhelming, your data feels like the lifeblood of your company’s growth.
** And as a member of the StartupCPG community, you’re able to leverage an exclusive discount.
Latticework “Data Boot Camp” normally a $5,000 package is now available to StartupCPG community members for $2,500. This one-time 50% discount is available to StartupCPG members who enroll to complete a Latticework “Data Boot Camp” before the end of 2022.
An Ultra-Lightweight Marketing Analytics Platform + Data Boot Camp for DTC Startups
At Latticework, we’ve spent the last 5 years coaching over 60 brands how to get value out of their data. Things like making sure data is clean & accurate. Making sure Facebook, AdWords, Google Analytics, and Shopify are talking to each other and reporting on the same things. Making sure companies choose the right modern data tools. And by having clear & simple packages to usher brands through each stage of their growth.
There’s no sense in building a super advanced data platform for a company that just wants lightweight answers. But when your brand is ready to get advanced, we’ve got a package for that.
With Latticework “Data Boot Camp”, we’ll perform a full end-to-end data audit for your team. We’ll make sure no data is left behind. We’ll show you how to configure your marketing platforms correctly so that they are talking to each other properly and reporting the same things. We’ll set up a simple reporting dashboard to show you what’s possible with analytics. And we’ll conduct 2 Data Boot Camp training sessions make sure that your team feels empowered to make data driven decisions as your brand grows and evolves.
And we’ll get this all done in 2-weeks flat!
So if you’d like to try Latticework “Data Boot Camp”, click the link below to book a free consultation.
And we’ll have you and your company up and running fast.