How to Use Marketing Dashboards – @danfaggella
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A dashboard is an information management tool that allows you to take control of the business and dig deeper into the “how” and “why” of where it’s been and where it’s headed, by tracking key KPIs and other key data points relative to your business. Dashboards help to calibrate the business, to not only make more money but to also support the customers. If you’re seeing a dip in customer satisfaction, you also need to know why the numbers are down. Dashboards give you the granularity to know how and where to take action.
In Dan Faggella’s case, dashboards allowed his businesses to not rely only on him, and thus was instrumental in allowing him to sell his companies for 6 and 7 figures each, by showing that they could essentially steer themselves without relying solely on him to succeed.
Rich: Dan Faggella is the CEO and founder at TechEmergence, the only market research company discovery platform focused exclusively on artificial intelligence and machine learning. He sold his first business for 6 figures, his second business for 7 figures, both serving as economic fuel for TechEmergence.
He’s of the belief that the most important ethical considerations of the coming 30 years will be the creation or expansion of sentience and intelligence technology. His time is focused exclusively on this major concern. TechEmergence is intended first as a vehicle to proliferate an open minded conversation about the implications and applications of AI, and then the business model came later.
He occasionally writes for TechCrunch and Boston Business Journal, VentureBeat, Xconomy, VICE MotherBoard and others. He has spoken at places like TEDx, Stanford, Columbia (PAris campus), MIT, Harvard, Brown and others. And just so you know he’s a well-rounded man, he is also a Brazilian Jiu Jitsu black belt since 2013, and the 2012 National Champion. Dan, welcome to the show.
Dan: Rich, thanks a lot. People actually know my whole story since birth.
Rich: We have nothing more to discuss.
Dan: That’s the whole game guys, thanks for letting me be here.
Rich: Well I want to talk about one important thing that we mentioned, and the part where you basically sold your first business for 6 figures and your second business for 7 figures. I think a lot of us have the fantasy of selling our business for large amounts of cash, but even if that’s just a fantasy or you don’t have it and you want to get your business to that point.
You’ve built and sold these two businesses, if somebody is listening to this interview right now they may not be interested in selling their business, but I think that they would be interested in knowing what you did to get your business to a place where someone would want to buy it. Can you kind of talk a little bit about what you did to make your businesses so saleable?
Dan: Yeah. I had to learn this the hard way. The company I’m working on right now I have no intention of selling but I had to do this with the first two companies. I’ll keep this to things that are relevant when I was running them so that it wasn’t stuff on the side to get it sold, it was things that helped us grow and become more and more profitable.
The biggest things for me were first and foremost coming up with transparency around data and processes. So determining sort of who does what and having KPIs and metrics tied to all those major categories of tasks that happen within the business, that was very, very important. And to be honest the reason I did that was because I moved out here to the Silicon Valley area to grow the company I’m running now, and I was still running the ecommerce business with all my employees scattered around the east coast working remotely, so I did the KPI thing out of necessity.
A lot of businesses have the osmosis feel where they’re all in the same office and share the same software and they kind of have a feel. I was so unplugged I had to have that data. So the transparency around processes and data was huge, and then a small fading away of my personal presence to the point where leaving for 2 weeks still resulted in consistent growth, consistent profit, and consistent operations.
Rich: Some of what you’re saying reminds me of some of the topics that were covered in The E-Myth books. Just the idea where even if you’re not looking to franchise your business, the idea is if you can get your business to a place where you can franchise it, that usually means it’s pretty self sustaining and somebody can come in and run it. You can disappear for a little while and it’s still going to be successful and it’s not built entirely on you.
Dan: Yes, I completely resonate with that. I listened to the audio of The E-Myth probably 7 years ago. The book that influenced me most in the practical applications of those ideas – especially in a business that I was trying to grow very quickly – that last business was $0 – $2.3mil in gross revenue in 3 ½-4 years, the book that influenced me most was called, Scaling Up. It’s about sort of how very fast growing mostly technology companies have implemented processes to manage that growth.
As you can imagine, Rich, systems in place that kind of run themselves, you’re going to kind of have that moving really fast. E-Myth was wonderful inspiration, but I definitely recommend the book that kind of put the practical nuts and bolts in place and that’s called, Scaling Up.
Rich: Excellent, I’ll have to check that one out. Now when you and I talked before you said that you discovered the secret power of dashboards. Can you talk a little bit about your experience with dashboards?
Dan: Yeah, totally. Today in terms of a takeaway for the audience the idea of dashboards are rather common to folks. How to get it to click and become a massive relief tool for avoiding problems, a massive tool for allowing employees to run the business when you leave for long periods of time as I did, that’s a little bit of a different story.
So I’ll talk about dashboards and I’ll say this, dashboards took a little while for us to set up. So the way I thought it might work is we think hard about 7 or 8 things that we want to crack, we look at them every week, and by golly we’re going to have a bunch of insight and things are going to run smoothly. How it actually works is you think of the things that are the drivers – the metrics – the core drivers for all the most important areas of the company. You start tracking those week over week and it’s a little bit of a grind because there’s some monotony with gathering all this data manually. Which unfortunately we had to do, a few of our most important softwares had tremendous KPIs so we weren’t able to program it.
So there’s a struggle with gathering the data and then what you find out is some of the data – where you’re sourcing it and how you’re sourcing it – isn’t streamlined. So someone is pulling the report on Monday morning and Sunday night the numbers are different and you realize you need a standard in place for that.
So the dashboards grow incrementally along with the business and there’s 3 or so phases of getting them to a place where they’re useful. If you’re cool with it, I’ll kind of cover what our experience was and what I wish I knew. Because again by the time I sold it I was working under 20 hours a week and we were doing over $2mil in revenue and I got the thing sold for over $1mil bucks. But it took a little while to get dashboards to where they are. If you want I’ll talk about how to get it there.
Rich: Since I think many of us don’t use dashboards or maybe our experience with dashboards is something that Facebook already created for us or we set up in Google Analytics, I’d love you to walk us through where we can go from zero to 100 with these dashboards.
Dan: I’ll talk about the beginnings of getting a dashboard going and the way that I wish I had done it. I ended up doing this about a year after – the ecommerce business was 4-ish years old when we sold – and it was a year after I first implemented dashboards which were terrible and crappy and I wasn’t getting a lot out of them until I did what I’m about to say.
The most fruitful thing to get a dashboard going – the reason you want one – is because as you look at it you gain immediate insight, you steer clear of problems, you know what you did well and what you didn’t do well, and you know within some proxy the kind of money you’re going to have in your bank account at the end of the month. I really like metrics that tie to cash and profit and I never have dashboards disassociated with those things in any business I’ve run. And I’ve had to learn that the hard way.
The process that I wish I’d gone through is you get your most important vital team members who already own different processes in your business. So when I did this about a year and a half ago with my team at Science of Skill – which is my ecommerce company – what we did that was huge and we got the smartest folks together who run the most important business processes and we basically brainstormed open ended – we took the people that handled the business in those different sectors – and we asked what would be the most important metrics for us to know that we’re doing a great job and that we’re going to have more repeat customers, less people angry with us, great reviews, and that more people are likely to continue to buy from us and not refund. And we rambled some ideas for each area and we painstakingly took 2 ½ hours to shake out a bunch of ideas and then shake out the ones that are essential.
So the beginning here when I started was willy nilly, “aw crap we need a dashboard.” So we did revenue and then refunds and how many active subscribers we had for our membership program and we kind of willy nilly’d it in 15 minutes and then we ran with it. The better idea is to really instill the essentials first, and then once you have 12 numbers or so that just light you up and are completely convinced that these are the core drivers in the business, then you’ll feel excellent about tracking them week over week.
So that comes even before the technology tools. Conceptually you need to have your finger in the pulse of what actually drives the business, the legit heartbeat. Not some light stuff.
Rich: This is not the first time I’ve heard from a guest that before they ever look at the software they really start to map this out. So that definitely resonates with me. So just basically you’re starting by talking to the team members who are literally in the trenches and worked with them to figure out what your KPIs were. Before you figured out the software, first you determined by working as a team on what the drivers for the business were or what the KPIs – key performance indicators – were, and that was step 1.
Dan: Yup, that’s completely step 1 and I feel really dumb that I tried to do it myself and I tried to do it in 20 minutes when I setup my first dashboard. For a year or more of the earlier phases on the business we were kind of riffing on numbers that came out of a willy nilly internal brainstorm session with only myself, that was frankly not very good.
In our case the technology was actually Google spreadsheets, and we had week over week columns for our most important categories. There are better technology options for bigger businesses, things like Domo or Tableau. There’s these data visualization platforms that now exist and there’s different plugins to Infusionsoft and other marketing automation systems. For us the APIs out of Infusion and out of our merchant accounts – which really were the main numbers of the company – unfortunately the APIs were not great. So we ended up doing things in Sheets, we have some folks in India for $5 an hour who would enter the data every week and we would train them to do that. I’ll go into training and massaging the data in a minute.
Rich: That makes sense. And for anyone that’s listening, if you don’t know what an API is, it’s basically the way that one computer system is going to speak to another one and share certain data. Correct, is that a decent enough explanation?
Dan: Yes. I should have given some context, I didn’t know what one was until embarrassingly not that long ago myself. An API is a method by which technologies communicate.
So the second phase is to ensure that you have a consistent pulse of covering these numbers, preferably with someone else, at least one other important person on your team. If you’re a solo person I have found that weekly regimens of behavior – whether that be checking metrics, emailing – I have better adherence to behavior change when I’m accountable to that behavior change with one or more people on my own team.
But it sort of helps if you’re going to sit down with somebody else on your team on Monday and you have it blocked on the calendar to cover this stuff, that’s a little bit easier than doing it yourself. However, it’s perfectly possible to do it yourself. In my new business I actually do a lot of it myself as well. But a once a week time minimum where you look at these metrics. For us it was Monday morning, I very much recommend it setting the tone of the week. Understanding what the problems are for the week is extremely important.
What you’re going to find in the first meeting, the second meeting, the third meeting, the initial couple months of doing this and it’s going to feel a little bit abrasive. And I used this as an excuse to kind of not pay attention to dashboards as much as I should in the early days, but I should have sunk my teeth in and got it finished. What you’re going to find is some of your data sources are a little bit flubby and you don’t really know why. Why is revenue represented this way and it seems to fluctuate week over week, this is not the consistent weekly revenue that I would expect, what’s the heck is going on over here.
And what ends up being the case is you’ll determine and discern exactly how you pull that data and exactly when and you’ll find that that’s actually critical to making the dashboards useful. If the data is willy nilly you have no steering and it’s so easy to let that go. It’s easy to say, “That column is kind of a shitty column, whatever, let’s just go to the next column.” And you let people enter crappy data every week. Again, I did that for the first year and a half of having dashboards which is silly for the ecommerce business. But you really do have to sink your teeth in and say, “This doesn’t represent what we want”, in which case you’re going to come up with the protocol to get the exact data and the exact information.
The other thing that’s going to happen is really two categories of this abrasiveness. You’re going to find numbers that are either totally not relevant and you know that you need to stop tracking them, or you’re going to find numbers that aren’t really that relevant unless you have a little bit more data and you’re going to think of something else that you’d like to add that’s not ancillary but really is essential to getting any insight around your business. If you like I can give examples.
Rich: I was just about to ask if you could anchor that into something that you experienced, I think that would be helpful for me at least to kind of picture it.
Dan: Yup, this will be pretty simple for you. So in our case for customer service, we had 300 or 400 email tickets a week that we would be handling in the ecommerce business, very high volume and relatively low ticket – mostly US based but sort of global customers – lot’s and lot’s of flow going in there. We would have sort of a pulse on our general satisfaction score through ZenDesk. And ZenDesk would allow us to send out a satisfaction survey when a problem was solved and people would be able to rate us. So we had an objective of being over 80%-85% satisfaction for all of our stuff. We had one other metric which was knowing what our average ticket response time was. When someone emails us, how long did it take us to get back to that person to handle their issue. So those were two numbers we were tracking.
What we realized is that we would sometimes have specific issues with delivery problems or specific issues with refund requests, oe specific issues with a download link or a content link that was bothering people. And when we saw slight fluctuations in satisfaction it actually was not insightful unless we saw the satisfaction breakouts across refunds, cancellation requests, delivery problems, technical issues. So we had 5 or 6 categories of customer support tickets. And unless we saw those manifested at the right hand side of the general satisfaction score, there was nothing we could do.
So the question went like this for 3 or 4 weeks in a row, “I see we’re dipping here, we’re at 76% here, the last 2 weeks we’ve been going down. Why is that?” And I’m talking to Customer Support and they’re not really sure, they don’t know what particular things. So three weeks later we kind of realized, next week we’ll have Customer Support fill in the satisfaction score per category on the right hand side of this data. And only then were we able to say it was a delivery issue or 3 or 4 of the emails had busted links and this got people really annoyed with us. And that allowed us to calibrate. So that’s one example of we need more if we’re going to be able to steer the business. If we’re going to be able to use this dashboard to make more money and to support our customers, we need enough granularity to take action.
Rich: And it sounds like it’s an iterative process. So you spent time up front to figure out exactly what you needed and then you go in with the best of intentions, but like anything else it doesn’t mean it’s perfect. And so once you’re in it you start to see I need more information over here or this information is redundant, and you continually refine this information.
Dan: That’s exactly it. You’re going to have to come up with processes for 2 things; process for exactly how to get the data and ensure it’s correct, how you pull it, what time you pull it, etc. And, exactly what level of granularity you need to take action to drive more profit and growth. So those 2 things are going to be very iterative and that’s another really important phase of how this works.
Rich: Alright, so what happens next?
Dan: So the last level here, and ultimately it’s really important to note that you always will have this as an iterative process. So right up until the time I sold the company a couple months ago, we had been making minor tweaks and adjustments. But I will say the biggest time when iteration will be in your face is when you first implement a dashboard and first sit down with the habit every single week.
And again, in Scaling Up they talk about weekly dashboard checking – and they’re not the only folks that mention that – but when you first get into that habit you have the most iteration. After you get through with that, being able to determine how long you want that metrics meeting to take and what you want to get out of it is going to be extremely important. The way that we did this was the following, and this was important for me because we wanted to spend a lot less time in the company and eventually get a 7 figure sale, but folks tuning in now may not care about selling but I’m sire everybody would love the ability to leave for 2 weeks and be able to forget about things. So this was really essential for me to eventually not be there for most of the meetings of my company.
The way that I did that was we determined it’s going to take 45 minutes.If you want you can ramble about your metrics all day and burn 2 hours and not really have many action steps. So we’re going to get all this done in 45 minutes and by the end of that metrics rundown we’re going to distill the “to do’s” based on that data. So on Monday we distill the “to do’s” based on that data. So it might be, “Hey Greg, I’m going to have you pop into the emails we sent out on Thursday and Friday of last week and see if there were broken links because we’ll want to fix those templates. I see a lot of technical errors in Customer Support and I want to see if it was that pre-weekend promotion.” Boom, that’s an action step so that goes into whatever your task management software is.
Another thing might be, “Hey Tim, I saw a huge bump in our active monthly subscribers, a lot more than we thought we would get from those weekend promos. When you and I talk on Tuesday I’d like you to bring to the table the numbers for those 3 separate promos and talk to me about which one was a big hit, because we’re probably going to want to buy them again next month and we’re going to want to strategize on how to do that.” So we would distill the “to do’s” based on the numbers. What went well, what didn’t, how do we calibrate, how do we need to act. And what this let us do was it let us take immediate action on killing anything that could turn into a tragedy and enhancing anything that went really well, and then cementing that as a behavior.
By the 2nd, 3rd, 4th month of doing this, what I did is I had my top guys oscillate in terms of who would run the metrics meeting. So these guys would step in instead of me and they would go from top to bottom from revenue to merchant accounts, etc, and they would walk through the numbers with the team and they would ask the other team members questions. This gave them a Spider Sense for all the business metrics to the point where if I was totally sitting on the sidelines or didn’t even show up to that meeting, the team could accountably calibrate and adjust their behavior without me. So getting it to a point where the team can make sense of the data and the team can act. This is what gave me the time freedom to clock in less than part-time hours and still do a couple million on the topline.
Rich: Very impressive. I definitely like how you’re also creating leaders out of your team at the same time.
Rich: So on all this I have this really basic question which is nagging at me. So you have been talking about how there are some tools out there for some big companies and a small business might use Google Spreadsheets. When I hear the word “dashboard” I always think of something that’s a little bit more graphical than a spreadsheet. So did you create something or did you find a tool that made – for lack of a better phrase – pretty pictures out of all your numbers, or did you just basically take a look at the bottom number in Google Spreadsheets to make your decision from that?
Dan: Here’s how we skinned the cat. We had a Sheet sort of broken out into various sections that were color coded – whether that be one is revenue, one is returns, we had merchant accounts, we had customer support data, we had delivery information – and we used to use conditional formatting on the columns that were kind of the ones of calibrated worth.
So let’s just say we’re looking at “refund percentage per week”, or we’re looking at “chargeback percentage per rate” on all merchant accounts, or we’re looking at “percentage of warehouse shipments to items purchased”. Those general range columns – the ones that mattered – conditional formatting lets you put the high end as a darker color like green and the low end as pure white, or it lets you take the number 100 as white and everything below it is faded and faded more and more red, and everything about 100 gets faded more and more green, for example. I’m giving you arbitrary examples, but in Google sheets it’s conditional formatting.
We essentially looked at the trends, that was our “pretty picture” method. Google Sheets does let you take a column and turn that into a graph representation, and we had those on a farther scroll to the right of the conditional formatting. But in the team meeting when we were trying to crunch everything into 45 minutes, we almost never went to the graphs. I’m sure there would have been some insight there and as I grow bigger and bigger companies I’m going to have more and more of that. But for us to be honest, going from zero to $2mil, it was “This column is darker red the last 3 weeks than it has been, what the heck is going on?” The pretty pictures were literally in conditional formatting in color coded columns.
Dan: I hate how simple that is.
Rich: No, it’s great.
Dan: The guys in India on Sunday night fill in all the data, we look at our key ratios, and we kind of calibrate our activity on that.
Rich: No, I think this has been fascinating. I know this is not your business anymore, so normally I would say, “Hey, where can we find you online?” But why don’t you just take a minute to tell us a little bit about your current passion, and then tell us where we can find you online.
Dan: Sure. I sold the last two companies when I was with you last time, I was talking about marketing automation for the business that we sold, which is another key tool if people want to. I’ll say you can find me online at Rich’s podcast.
But the new business is all about market research in the artificial intelligence space. There’s a lot of folks where AI is a pretty big deal in the business world now, there’s a lot of startups out here in California in the Bay area which is where I am, and we kind of cover where AI is making a difference in predictive analytics, marketing, data security, and all these various important facets of industry that are destined to be transformed in the next 5-10 years. What are kind of the implications and applications of that for business, but we also have a pretty serious emphasis on what the social implications are as well and keep people thinking about that, too. So that’s the business I’m growing now.
Two things that I think are probably relevant and worth a mention when it comes to where to find me online, the only place where I write about marketing and business growth is the same site I mentioned last time which is CLVBoost.com, which is my own blog of just marketing stuff. So any of my stories about the businesses I’ve grown I mention there. I think I have a poignant article on this same topic that I can send you.
The article that might be useful for folks who kind of want to know what it was like to automate and step back from a lot of things, was an article that I actually wrote recently on TechEmergence about the process of getting to exit. So even for people that don’t want to sell, if you kind of want to know what it takes to get there or certainly what it takes to step away from being hands on. I was 60 hours a week when I started this business and I ended under 20 a week when we sold. That might also be a useful resource. And again, like you said Rich, not everybody is interested in the sale but I think everybody would love to take more vacations and not have to worry as much about the bottom line.
Rich: Absolutely. And you were on Episode 63 when it was called The Marketing Agents Podcast. I just looked that up while you were talking. We’ll have a link to all the stuff that Dan shared with us on the show. Dan, thank you so much for taking time out of your day, although now I know you’re only working 20 hours a week so really you had time for this. I appreciate it, I know you’re a busy man, thank you so much for your time today.
Dan: Awesome Rich, thanks for having me.
Be sure to read Dan’s blog posts for insightful information on marketing and business growth. And be sure to follow him on Twitter, Facebook, and LinkedIn.
The article mentioned in this interview about the “ups” and “downs” of trying to make a business automated and sale-able
- The most relevant CLVboost post given the article we talked about is here, too:
Dan’s most recent post about how he grew his most recent company to over $1mil in sales, including his “metrics obsession” and covers why/when dashboards are relevant.
Rich Brooks is the President of flyte new media, creator of the Agents of Change Digital Marketing Conference, and author of a new book, The Lead Machine. He loves helping businesses fine tune their strategies for digital marketing in the areas of search, social and mobile.