Understanding the Hierarchy Of Data Observation

When it comes to understanding data and its impact on your business, it is helpful to know about the different levels of observability. Many companies miss out on the benefits of digging deeper into their data because they only focus on the most basic outputs. In this article, we’ll discuss the three levels of data observability and how businesses can make use of them.

Level One: Observable Data

Observable data is the most basic level of data, and it simply refers to the information that is being collected. This data can be seen and monitored, but it has not been filtered or processed in any way. This level of data helps get a general overview of what is happening, but it doesn’t provide many insights you can act upon.

The benefits and drawbacks of observable data

The benefit of observable data is that it is easy to collect and doesn’t require many resources. This kind of data can be collected passively through website analytics tools or social media monitoring. However, the downside is that this data can be overwhelming, and it can be challenging to know what to do with it.

Best uses of observable data

The best way to use observable data is to look for patterns and trends. This data can help identify problems that need further investigation. For example, if you notice sales consistently declining on Tuesdays, you can drill down into the data to see what might be causing this trend. Another excellent use for observable data is to track customer satisfaction. By monitoring this data, you can quickly identify areas your business needs to improve.

Level Two: Actionable Data

Once you have filtered and processed your data, it becomes actionable. It is ready to be used for taking specific actions, such as making changes to your website or launching a new marketing campaign. Actionable data is more valuable than observable data because it can be used to improve your business directly.

The benefits and drawbacks of actionable data

One of the benefits of actionable data is that it can help you save time and resources by only focusing on essential information. This data is also more likely to lead to tangible results because it improves your business operations directly. However, the downside of actionable data is that it can be difficult and time-consuming to collect.

Best uses of actionable data

Use actionable data to ensure that your metrics align with your business goals. If they don’t match, use the information to make appropriate changes, like updating a call for action or marketing strategy.

Another ideal use for actionable data is to track customer behavior. Do customers stay on a particular page of your website longer than others? Which campaign leads to more newsletter signups? By understanding how your customers interact with your business, you can make changes to improve their experience.

Level Three: Insights and Analytics

The third level of data observability is insights and analytics. You or your team have analyzed this data to extract valuable insights. These insights improve your business in various ways, such as by making better decisions or developing new strategies.

The benefits and drawbacks of insights and analytics

One of the main benefits of insights and analytics is that they can help you make better strategic decisions about the future of your business. This data can be used to understand which areas of your business need improvement and to develop new strategies for increasing sales or improving customer satisfaction.

In addition, insights and analytics track the performance of your business over time. This data can help you identify areas where your business is doing well and areas that need improvement.

However, this data often requires specialized skills and knowledge to interpret correctly. In addition, this level of data observability is the most expensive and time-consuming, costing up to ten times more than observable.

Best uses of insights and analytics

If you have the budget and the resources, use this level of data observability to track your business goals and KPIs over time. This data can help you understand whether or not you are achieving your goals and identify areas that need improvement. In addition, this data can be used to develop new strategies for increasing sales or improving customer satisfaction.

Use insights and analytics to track the performance of your competitors. By understanding how your competitors are doing, you can make changes to your own business in order to stay ahead of the competition.

Levels of Data Observability: The Bottom Line

The three levels of data observability each have their benefits and drawbacks. Understanding all three is important to make the best decisions about which data to collect and how to use it. You may want to focus on one level or all three depending on your needs.

If you’re just starting, begin with observable data. This data is the easiest to collect and can be used to improve your business in various ways. As you become more comfortable with collecting and using data, you can move on to actionable data, insights, and analytics.

No matter what level of data observability you’re working with, the most important thing is to use the data to improve your business. By understanding your data, you can make better decisions about your marketing, sales, and operations. And that can lead to a more successful business.