The Hidden ROI of Data: How to Measure Its Real Impact on Your Business

Data, data and more data. We live in a digital era that, in addition to giving us hours and hours in front of a screen, has thrown at us an enormous amount of information that we all know as "data". A new undeniable reality for any digital business.

With data, new needs have also arrived — new teams, new tools and, in short, a new area of investment for businesses of all sizes. So yes: data costs us money because we need to know how to manage it well.

But... what happens when that management does not seem to be worth it? What should a company do when it invests time, resources and money in its digital analytics, but feels it is not getting any value from it? Abandon it? Invest more?

The value of good digital analytics may not be clear to many companies. And that is understandable. That is why, in this article, we are going to explain what we always tell our clients at Boost: data adds a great deal of value — the problem is that we do not know how to measure its ROI.

Is it worth investing in your data?

Any analyst worth their salt would say exactly the same: of course it is. But... if we ask the same question to someone on the marketing or finance team, the answer could be quite different. Not everyone sees the real and direct impact of analytics investment in their day-to-day work — even though we assure you it is there.

We call that impact the ROI of data. That is: the real return on every euro invested in collecting, managing and analysing data. And while it sounds logical, measuring the ROI of your analytics is not always straightforward. Because... what can we really consider as return on investment?

What the ROI of data is and why it is not measured well

To be completely honest: there is no single way to understand (or measure) ROI. Every business, area or department — and even every sector — can measure completely differently the return or benefit from each euro invested in data.

In general, the problem lies in the fact that the vast majority of digital businesses only take into account the cost of their analytics investment — that is, the tools, any consultancy, staff salaries... And they forget to also measure the value generated. A value that can be split into two:

• Direct ROI → This is the most obvious, the one with a clear impact on key business metrics that, in most cases, can easily be counted. These could be revenue, conversions, new users... In other words: clear figures.

• Indirect ROI → This other return on investment is more ambiguous — or better said: intangible. Improvements in efficiency, greater agility in decision-making, a more strategic direction... Although they can be quantified, these benefits tend to be perceived more than measured.

Whatever type it is, the ROI of data exists. The question is whether digital businesses are capable of identifying and measuring it. But above all: having patience. Because data needs time.

Why the profitability of good analytics is not always immediate

Unlike many other decisions or investments a digital business makes (such as marketing campaigns or additional sales hires), investing in data can be a medium-to-long-term matter.

Yes, some things will improve immediately. But let us be honest: the changes that will truly have an impact on the business will take time. Investing in data is a matter of faith that, over time, ends up manifesting itself as a great decision.

In general, the profitability of good analytics is reflected not only in metrics but in the company culture. Data, if it is useful and communicated correctly, can make the team more agile and strategic — in other words, more data-driven.

Key metrics for measuring the impact of your data on your business

Regardless of your type of business, the size of your company and its objectives, there are a number of metrics you absolutely must factor in to measure the impact of your digital analytics. Because the survival of your business will depend on these metrics.

• Increase in conversion

Any digital service or website has room for improvement. Especially when it comes to conversion. That is why any initiative carried out with the help of data will have as a direct or indirect objective the increase in conversion.

The impact of all initiatives arising from data analysis can be measured through this key metric. Especially if the problem identified is related to a drop in the conversion funnel.

• Improvement in direct sales or revenue

Sometimes the impact of data is even more evident. If you are capable of making good use of your digital analytics and identifying major opportunities (such as a shift in your customers' priorities or a season of greater purchase intent), you will be able to make decisions that translate directly into your profits.

Prioritising a campaign that is performing better, repositioning a banner with potential to increase sales, adding a message that convinces users... All of these actions can arise from a good use of data and have a great impact on your business.

• Faster decisions

What appears to be an intangible and unquantifiable benefit is in reality another metric in itself. Sometimes the speed or agility in decision-making can be perceived in a general sense across the company, but it can also be measured.

In the case of Boost, we measure it through the speed of response to changes or the validation of hypotheses — in other words, the agility with which we are able to identify an opportunity, prepare an A/B test and carry out the necessary iterations.

• More satisfied users and greater retention

Finally, data also has a very important impact on the long-term survival of your business — in other words, on the satisfaction of your users with your service and their continued engagement with it.

Your data is an incredibly valuable source of information for truly knowing your customers: their behavioural patterns, their preferences, their needs... With good analytics you will be able to identify opportunities such as personalisation and, in the long run, retain your users more effectively.

Step by step to maximise the ROI of your data and get more out of it

For your web analytics to genuinely add value to your business, you need to invest in it. Having data is not enough — you need to ensure the entire process is quality: from collection to visualisation.

• Design reliable data collection → Opt for options that ensure the data you collect corresponds to the reality of your business. Options such as server-side tracking increase the reliability of your analytics and allow you to make far more strategic decisions.

• Create dashboards that are truly useful for your business → Think about the decisions you want to make. Having "pretty" charts with unhelpful metrics is not enough. What matters is having dashboards that genuinely help you identify opportunities and are flexible enough to keep pace with your business.

• Improve your segmentation and invest in personalisation → Your data needs to help you understand your users better so you can offer them experiences that suit them better. Investing in this to improve your conversion should be one of your analytics priorities.

• Opt for A/B tests and continuous optimisation → Data does not add value in a one-off way — it adds value if you use it recurrently and are always testing new things. For good ROI you need a solid A/B testing strategy to improve your agility and validate your results.

• Do not forget about real results → It is easy to fall into the trap of "vanity metrics". You may have run a test and achieved apparently incredible results, but if that does not translate into more conversion or sales, then it is worthless.

Discover how investing in data pays off with Boost and sell more

We promise: your data has value even if you have not been able to quantify it until now. It is not always easy to identify and associate real results with good web analytics, but without it, achieving good results in the digital world is impossible. Without data, there is no ROI.

The true value of data lies in all those things you are able to decide and correct thanks to it — in other words, all those opportunities that go unnoticed to the naked eye. And those opportunities have enormous value for your business.

At Boost we are experts in identifying both the data that adds value to your business and the ROI you achieve thanks to it. If you want to start improving your web analytics and quantifying the benefits you gain from it, write to us today.