Hypothesis Action Data Insights is an algorithm that helps identify the best direction for investing marketing funds. The meaning of this term is:
Hypothesis – Represents the ideas that the company wants to implement.
For example: “We want to rank high on TikTok.”
Action – Action . Suggestions for implementing the main idea.
"You can create an account for one the benefit of using our database of the company's employees and post three interesting videos a day. In addition, active activity on other accounts is required, leaving them relevant comments."
Data – That which allows us to conclude that the work is successful.
"Making direct sales on TikTok is not relevant for us, as it is not our main focus. However, we will still be able to get a certain number of clients."
Insights – Conclusions. Decisions that should be made based on the data obtained during the project implementation.
"When the orders received for the product are of high quality, albeit in small volumes, then you can increase the amount of resources spent on PR of the product on the channel. If there are many non-targeted applications, then you can try a new promotion strategy or completely end your activity on this site."
HADI-cycle as an important part of Data-Driven
When working with an Internet resource, the following problem may arise: the number of applications is large, but they do not transform into real purchases. This serves as a prerequisite for testing two main hypotheses:
The problem may be that your landing page isn't compelling enough. Potential customers want to buy the product, but you haven't convinced them that it's the best product.
People are not interested in receiving the product/service, but they like the design of the site and the materials presented on it.
In order to properly test these hypotheses and identify the correct direction for the company's strategy, it is necessary to constantly collect data and analyze it.
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Data-Driven Metrics
For a Data-Driven strategy to be successful, it is important to correctly define key performance indicators (KPI):
Traffic sources
Website visitors are potential clients of the company and consumers of the product. Therefore, it is necessary to receive information about its traffic regularly. It is necessary to understand from which resources clients most often come to your site, and based on this information, draw conclusions about which advertising is more effective. This will help to correctly distribute the budget between those channels that provide the greatest influx of visitors.
Return on Investment (ROI)
When allocating funds for advertising, it is necessary to understand how each type of advertising affects the company's income. An idea of this data is given by the return on investment ratio. In simple terms, it shows whether the company will make a profit after conducting a marketing campaign.
Customer Lifetime Value (LTV)
LTV is the total revenue received from one customer over the entire period of work with him. It is possible that you will spend more money on attracting a consumer than you earn. This situation will lead to losses for the enterprise, which is why it is so important to track this indicator.
Customer Acquisition Cost (CAC)
CAC is the amount that will be spent to attract one client. It represents all expenses, including the cost of paying marketers, sales representatives, as well as the amount of funds invested in advertising. If the CAC indicator is greater than the LTV indicator, this means that the marketing strategy needs to be changed.