What type of data should I collect about my users/customers?
The conversation about data as of late is regarding privacy, what the government knows about us and whether that's OK. It all feels a little Big Brother.
Meanwhile, if you're at a startup, you're faced with the opposite problem: collecting data on users is easy. There's a lot of it. But as privacy concerns become more and more prominent (and buzzy startups set poor examples), it's important to only collect what you need, and to take it a step further, and communicate with your users what you're collecting and ensure they're okay with it.
Why You Need Data
Data can help with marketing. For Doggyloot, an ecommerce site for dog owners, users are presented with a form to fill in their dog's name, size, birthday and more — "It's fairly active, but super simple, and it helps with our marketing efforts tremendously," says CEO Jeff Eckerling. When creating personalized marketing emails, "A 10-pound bone won't work for a 5-pound dog," he says.
But Fligoo, a gift recommendation app, stays away from forms. "Our policy is that we should not add additional steps as long as we can," says co-founder Juan Cruz. The data instead is collected via Facebook login (so each user gives the startup access to information that is public on Facebook), actions by specific users (by user ID) inside the Fligoo app and data in aggregate by all users in the app. This information is used to improve the product and make a better user experience, Cruz says. Data such as the number of users, and the percentage of return users, will be important when a startup wants to find customers, says Keith Bourne, founder of Omniburst Media. Especially for advertisers, reaching a return user who is presumably having a good experience is more valuable than a one-time user.
But advertising as a business model also changes the game when it comes to user privacy. For a startup merely trying to improve its product, it is enough to collect data in aggregate, and say, 70% of users are not using this feature, so we'll cut it. When the content of ads need to be tailored to an individual's interests, the data is tied to the individual.
What Every Startup Should Collect
Most startups have one key metric. For Meetup, it was RSVPs. All product decisions were designed about growing that one metric.
But for a startup just working on getting a minimum viable product (MVP) out the door, Bourne says they often gloss over data collection, which is a mistake. In the beginning, he recommends startups set up a basic mechanism to log data, even if it just goes into a database. Later you'll get a better idea of what data is important, he says, and can work on making the data actionable.
For a healthcare app, the data point might be to decrease the length of stay in a healthcare facility, something likely tracked by the facility itself.
All startups should be collecting data generated by their own product. Knowing what actions users do frequently, or not at all, allows a startup to improve the experience every day, says Cruz. This would include number of logins per day, week or month, length of visit, actions taken on the site or app and anything else specific to the product. As Bourne says, it's making sense of the data, in order to drive decisions, that is really the challenge.
Generally, user data is collected by user ID, not name, which protects a person's privacy. Data can also be collected by device, but more and more startups want to offer a consistent experience across devices — so they'll offer user accounts that can be logged into across devices. Many startups use third-party services to process payment so they're not responsible for encrypting and protecting a user's payment data.
When Data Goes Wrong
The opportunities for collected mobile data are endless, Bourne says — but therein lies the problem. In companies and startups he's consulted on mobile strategy, some get overzealous, and the culprit is often location data, and startups should be very intentional about deciding whether it's necessary. Most of the time, it isn't.
When it comes to ensuring the trust of users, transparency is the best route. If it's important to your business to collect data by user rather than in aggregate — if your model is advertising — it's best to give users a form to fill in rather than collecting data under the table and mentioning it in a Terms of Service. This is likely the one time when disrupting user experience with a form actually makes the experience better.
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