Why Every Data Team Needs a “Money Tree” | by Ryan Foley | Nov, 2020
How this framework rallied my stakeholders behind my work
When I joined Square, my product staff was loosely monitoring a ton of metrics. There was spotty understanding of how they associated to one another, and never a lot alignment on the place we should always focus our efforts.
My staff wanted assist.
I knew they wanted a cash tree. 🤑 🌳
A cash tree is a easy diagram that exhibits how your metrics ladder up out of your ‘top of funnel’ all the best way to your final objectives (normally $$ and customers).
Here’s a pattern cash tree.
In actuality, most companies are way more complicated than this: For instance, the form of my staff’s cash tree is beneath.
Money timber guarantee shared understanding of what’s driving your backside line and create alignment in your greatest areas of alternative.
Ensure shared understanding
Most ‘data people’ have a good sense of how your many metrics ladder as much as your final objectives. But our much less data-intensive stakeholders typically don’t share our understanding; they don’t stay within the weeds right here.
I do know once I’ve thrown round statements like ‘processing churn is down’ and ‘average transaction margin is up’, most of my teammates’ eyes gloss over — with out our assist, they typically don’t know why these items are necessary to them and to our backside line. And actually, these metrics aren’t that thrilling in isolation.
Most ‘data people’ can most likely consider a number of tasks that may enhance a number of metrics. But are you aligned along with your staff on which is most necessary? And how would you rally your staff behind a growth-focused effort as an alternative of a product characteristic?
Put otherwise: why would your product supervisor select to A/B take a look at your onboarding stream whereas there’s a lengthy checklist of options clients are asking for?
Create alignment along with your cash tree. Isolate the basic behavioral metrics: normally acquisition, conversion, utilization, retention. How do these examine to inside benchmarks, exterior benchmarks, and your intestine?
Once you’re aligned on the most important areas of alternative, your stakeholders will really care about placing your evaluation findings & suggestions into motion.
No one goes to care about your churn evaluation in case your retention is finest at school.
Map out your metrics with a cash tree, benchmark the behavioral metrics, and rejoice in your shared understanding & alignment along with your stakeholders. 😌