which component of the business plan contains a number for tracking purposes

11.4 The Business Plan

Learning objectives.

By the end of this section, you will be able to:

• Describe the different purposes of a business plan
• Describe and develop the components of a brief business plan
• Describe and develop the components of a full business plan

Unlike the brief or lean formats introduced so far, the business plan is a formal document used for the long-range planning of a company’s operation. It typically includes background information, financial information, and a summary of the business. Investors nearly always request a formal business plan because it is an integral part of their evaluation of whether to invest in a company. Although nothing in business is permanent, a business plan typically has components that are more “set in stone” than a business model canvas , which is more commonly used as a first step in the planning process and throughout the early stages of a nascent business. A business plan is likely to describe the business and industry, market strategies, sales potential, and competitive analysis, as well as the company’s long-term goals and objectives. An in-depth formal business plan would follow at later stages after various iterations to business model canvases. The business plan usually projects financial data over a three-year period and is typically required by banks or other investors to secure funding. The business plan is a roadmap for the company to follow over multiple years.

Some entrepreneurs prefer to use the canvas process instead of the business plan, whereas others use a shorter version of the business plan, submitting it to investors after several iterations. There are also entrepreneurs who use the business plan earlier in the entrepreneurial process, either preceding or concurrently with a canvas. For instance, Chris Guillebeau has a one-page business plan template in his book The $100 Startup . 48 His version is basically an extension of a napkin sketch without the detail of a full business plan. As you progress, you can also consider a brief business plan (about two pages)—if you want to support a rapid business launch—and/or a standard business plan.

As with many aspects of entrepreneurship, there are no clear hard and fast rules to achieving entrepreneurial success. You may encounter different people who want different things (canvas, summary, full business plan), and you also have flexibility in following whatever tool works best for you. Like the canvas, the various versions of the business plan are tools that will aid you in your entrepreneurial endeavor.

Business Plan Overview

Most business plans have several distinct sections ( Figure 11.16 ). The business plan can range from a few pages to twenty-five pages or more, depending on the purpose and the intended audience. For our discussion, we’ll describe a brief business plan and a standard business plan. If you are able to successfully design a business model canvas, then you will have the structure for developing a clear business plan that you can submit for financial consideration.

Both types of business plans aim at providing a picture and roadmap to follow from conception to creation. If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept.

The full business plan is aimed at executing the vision concept, dealing with the proverbial devil in the details. Developing a full business plan will assist those of you who need a more detailed and structured roadmap, or those of you with little to no background in business. The business planning process includes the business model, a feasibility analysis, and a full business plan, which we will discuss later in this section. Next, we explore how a business plan can meet several different needs.

Purposes of a Business Plan

A business plan can serve many different purposes—some internal, others external. As we discussed previously, you can use a business plan as an internal early planning device, an extension of a napkin sketch, and as a follow-up to one of the canvas tools. A business plan can be an organizational roadmap , that is, an internal planning tool and working plan that you can apply to your business in order to reach your desired goals over the course of several years. The business plan should be written by the owners of the venture, since it forces a firsthand examination of the business operations and allows them to focus on areas that need improvement.

Refer to the business venture throughout the document. Generally speaking, a business plan should not be written in the first person.

A major external purpose for the business plan is as an investment tool that outlines financial projections, becoming a document designed to attract investors. In many instances, a business plan can complement a formal investor’s pitch. In this context, the business plan is a presentation plan, intended for an outside audience that may or may not be familiar with your industry, your business, and your competitors.

You can also use your business plan as a contingency plan by outlining some “what-if” scenarios and exploring how you might respond if these scenarios unfold. Pretty Young Professional launched in November 2010 as an online resource to guide an emerging generation of female leaders. The site focused on recent female college graduates and current students searching for professional roles and those in their first professional roles. It was founded by four friends who were coworkers at the global consultancy firm McKinsey. But after positions and equity were decided among them, fundamental differences of opinion about the direction of the business emerged between two factions, according to the cofounder and former CEO Kathryn Minshew . “I think, naively, we assumed that if we kicked the can down the road on some of those things, we’d be able to sort them out,” Minshew said. Minshew went on to found a different professional site, The Muse , and took much of the editorial team of Pretty Young Professional with her. 49 Whereas greater planning potentially could have prevented the early demise of Pretty Young Professional, a change in planning led to overnight success for Joshua Esnard and The Cut Buddy team. Esnard invented and patented the plastic hair template that he was selling online out of his Fort Lauderdale garage while working a full-time job at Broward College and running a side business. Esnard had hundreds of boxes of Cut Buddies sitting in his home when he changed his marketing plan to enlist companies specializing in making videos go viral. It worked so well that a promotional video for the product garnered 8 million views in hours. The Cut Buddy sold over 4,000 products in a few hours when Esnard only had hundreds remaining. Demand greatly exceeded his supply, so Esnard had to scramble to increase manufacturing and offered customers two-for-one deals to make up for delays. This led to selling 55,000 units, generating $700,000 in sales in 2017. 50 After appearing on Shark Tank and landing a deal with Daymond John that gave the “shark” a 20-percent equity stake in return for $300,000, The Cut Buddy has added new distribution channels to include retail sales along with online commerce. Changing one aspect of a business plan—the marketing plan—yielded success for The Cut Buddy.

Link to Learning

Watch this video of Cut Buddy’s founder, Joshua Esnard, telling his company’s story to learn more.

If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept. This version is used to interest potential investors, employees, and other stakeholders, and will include a financial summary “box,” but it must have a disclaimer, and the founder/entrepreneur may need to have the people who receive it sign a nondisclosure agreement (NDA) . The full business plan is aimed at executing the vision concept, providing supporting details, and would be required by financial institutions and others as they formally become stakeholders in the venture. Both are aimed at providing a picture and roadmap to go from conception to creation.

Types of Business Plans

The brief business plan is similar to an extended executive summary from the full business plan. This concise document provides a broad overview of your entrepreneurial concept, your team members, how and why you will execute on your plans, and why you are the ones to do so. You can think of a brief business plan as a scene setter or—since we began this chapter with a film reference—as a trailer to the full movie. The brief business plan is the commercial equivalent to a trailer for Field of Dreams , whereas the full plan is the full-length movie equivalent.

Brief Business Plan or Executive Summary

As the name implies, the brief business plan or executive summary summarizes key elements of the entire business plan, such as the business concept, financial features, and current business position. The executive summary version of the business plan is your opportunity to broadly articulate the overall concept and vision of the company for yourself, for prospective investors, and for current and future employees.

A typical executive summary is generally no longer than a page, but because the brief business plan is essentially an extended executive summary, the executive summary section is vital. This is the “ask” to an investor. You should begin by clearly stating what you are asking for in the summary.

In the business concept phase, you’ll describe the business, its product, and its markets. Describe the customer segment it serves and why your company will hold a competitive advantage. This section may align roughly with the customer segments and value-proposition segments of a canvas.

Next, highlight the important financial features, including sales, profits, cash flows, and return on investment. Like the financial portion of a feasibility analysis, the financial analysis component of a business plan may typically include items like a twelve-month profit and loss projection, a three- or four-year profit and loss projection, a cash-flow projection, a projected balance sheet, and a breakeven calculation. You can explore a feasibility study and financial projections in more depth in the formal business plan. Here, you want to focus on the big picture of your numbers and what they mean.

The current business position section can furnish relevant information about you and your team members and the company at large. This is your opportunity to tell the story of how you formed the company, to describe its legal status (form of operation), and to list the principal players. In one part of the extended executive summary, you can cover your reasons for starting the business: Here is an opportunity to clearly define the needs you think you can meet and perhaps get into the pains and gains of customers. You also can provide a summary of the overall strategic direction in which you intend to take the company. Describe the company’s mission, vision, goals and objectives, overall business model, and value proposition.

Rice University’s Student Business Plan Competition, one of the largest and overall best-regarded graduate school business-plan competitions (see Telling Your Entrepreneurial Story and Pitching the Idea ), requires an executive summary of up to five pages to apply. 51 , 52 Its suggested sections are shown in Table 11.2 .

Are You Ready?

Create a brief business plan.

Fill out a canvas of your choosing for a well-known startup: Uber, Netflix, Dropbox, Etsy, Airbnb, Bird/Lime, Warby Parker, or any of the companies featured throughout this chapter or one of your choice. Then create a brief business plan for that business. See if you can find a version of the company’s actual executive summary, business plan, or canvas. Compare and contrast your vision with what the company has articulated.

• These companies are well established but is there a component of what you charted that you would advise the company to change to ensure future viability?
• Map out a contingency plan for a “what-if” scenario if one key aspect of the company or the environment it operates in were drastically is altered?

Full Business Plan

Even full business plans can vary in length, scale, and scope. Rice University sets a ten-page cap on business plans submitted for the full competition. The IndUS Entrepreneurs , one of the largest global networks of entrepreneurs, also holds business plan competitions for students through its Tie Young Entrepreneurs program. In contrast, business plans submitted for that competition can usually be up to twenty-five pages. These are just two examples. Some components may differ slightly; common elements are typically found in a formal business plan outline. The next section will provide sample components of a full business plan for a fictional business.

Executive Summary

The executive summary should provide an overview of your business with key points and issues. Because the summary is intended to summarize the entire document, it is most helpful to write this section last, even though it comes first in sequence. The writing in this section should be especially concise. Readers should be able to understand your needs and capabilities at first glance. The section should tell the reader what you want and your “ask” should be explicitly stated in the summary.

Describe your business, its product or service, and the intended customers. Explain what will be sold, who it will be sold to, and what competitive advantages the business has. Table 11.3 shows a sample executive summary for the fictional company La Vida Lola.

Business Description

This section describes the industry, your product, and the business and success factors. It should provide a current outlook as well as future trends and developments. You also should address your company’s mission, vision, goals, and objectives. Summarize your overall strategic direction, your reasons for starting the business, a description of your products and services, your business model, and your company’s value proposition. Consider including the Standard Industrial Classification/North American Industry Classification System (SIC/NAICS) code to specify the industry and insure correct identification. The industry extends beyond where the business is located and operates, and should include national and global dynamics. Table 11.4 shows a sample business description for La Vida Lola.

Industry Analysis and Market Strategies

Here you should define your market in terms of size, structure, growth prospects, trends, and sales potential. You’ll want to include your TAM and forecast the SAM . (Both these terms are discussed in Conducting a Feasibility Analysis .) This is a place to address market segmentation strategies by geography, customer attributes, or product orientation. Describe your positioning relative to your competitors’ in terms of pricing, distribution, promotion plan, and sales potential. Table 11.5 shows an example industry analysis and market strategy for La Vida Lola.

Competitive Analysis

The competitive analysis is a statement of the business strategy as it relates to the competition. You want to be able to identify who are your major competitors and assess what are their market shares, markets served, strategies employed, and expected response to entry? You likely want to conduct a classic SWOT analysis (Strengths Weaknesses Opportunities Threats) and complete a competitive-strength grid or competitive matrix. Outline your company’s competitive strengths relative to those of the competition in regard to product, distribution, pricing, promotion, and advertising. What are your company’s competitive advantages and their likely impacts on its success? The key is to construct it properly for the relevant features/benefits (by weight, according to customers) and how the startup compares to incumbents. The competitive matrix should show clearly how and why the startup has a clear (if not currently measurable) competitive advantage. Some common features in the example include price, benefits, quality, type of features, locations, and distribution/sales. Sample templates are shown in Figure 11.17 and Figure 11.18 . A competitive analysis helps you create a marketing strategy that will identify assets or skills that your competitors are lacking so you can plan to fill those gaps, giving you a distinct competitive advantage. When creating a competitor analysis, it is important to focus on the key features and elements that matter to customers, rather than focusing too heavily on the entrepreneur’s idea and desires.

Operations and Management Plan

In this section, outline how you will manage your company. Describe its organizational structure. Here you can address the form of ownership and, if warranted, include an organizational chart/structure. Highlight the backgrounds, experiences, qualifications, areas of expertise, and roles of members of the management team. This is also the place to mention any other stakeholders, such as a board of directors or advisory board(s), and their relevant relationship to the founder, experience and value to help make the venture successful, and professional service firms providing management support, such as accounting services and legal counsel.

Table 11.6 shows a sample operations and management plan for La Vida Lola.

Marketing Plan

Here you should outline and describe an effective overall marketing strategy for your venture, providing details regarding pricing, promotion, advertising, distribution, media usage, public relations, and a digital presence. Fully describe your sales management plan and the composition of your sales force, along with a comprehensive and detailed budget for the marketing plan. Table 11.7 shows a sample marketing plan for La Vida Lola.

Financial Plan

A financial plan seeks to forecast revenue and expenses; project a financial narrative; and estimate project costs, valuations, and cash flow projections. This section should present an accurate, realistic, and achievable financial plan for your venture (see Entrepreneurial Finance and Accounting for detailed discussions about conducting these projections). Include sales forecasts and income projections, pro forma financial statements ( Building the Entrepreneurial Dream Team , a breakeven analysis, and a capital budget. Identify your possible sources of financing (discussed in Conducting a Feasibility Analysis ). Figure 11.19 shows a template of cash-flow needs for La Vida Lola.

Entrepreneur In Action

Laughing man coffee.

Hugh Jackman ( Figure 11.20 ) may best be known for portraying a comic-book superhero who used his mutant abilities to protect the world from villains. But the Wolverine actor is also working to make the planet a better place for real, not through adamantium claws but through social entrepreneurship.

A love of java jolted Jackman into action in 2009, when he traveled to Ethiopia with a Christian humanitarian group to shoot a documentary about the impact of fair-trade certification on coffee growers there. He decided to launch a business and follow in the footsteps of the late Paul Newman, another famous actor turned philanthropist via food ventures.

Jackman launched Laughing Man Coffee two years later; he sold the line to Keurig in 2015. One Laughing Man Coffee café in New York continues to operate independently, investing its proceeds into charitable programs that support better housing, health, and educational initiatives within fair-trade farming communities. 55 Although the New York location is the only café, the coffee brand is still distributed, with Keurig donating an undisclosed portion of Laughing Man proceeds to those causes (whereas Jackman donates all his profits). The company initially donated its profits to World Vision, the Christian humanitarian group Jackman accompanied in 2009. In 2017, it created the Laughing Man Foundation to be more active with its money management and distribution.

• You be the entrepreneur. If you were Jackman, would you have sold the company to Keurig? Why or why not?
• Would you have started the Laughing Man Foundation?
• What else can Jackman do to aid fair-trade practices for coffee growers?

What Can You Do?

Textbooks for change.

Founded in 2014, Textbooks for Change uses a cross-compensation model, in which one customer segment pays for a product or service, and the profit from that revenue is used to provide the same product or service to another, underserved segment. Textbooks for Change partners with student organizations to collect used college textbooks, some of which are re-sold while others are donated to students in need at underserved universities across the globe. The organization has reused or recycled 250,000 textbooks, providing 220,000 students with access through seven campus partners in East Africa. This B-corp social enterprise tackles a problem and offers a solution that is directly relevant to college students like yourself. Have you observed a problem on your college campus or other campuses that is not being served properly? Could it result in a social enterprise?

Work It Out

Franchisee set out.

A franchisee of East Coast Wings, a chain with dozens of restaurants in the United States, has decided to part ways with the chain. The new store will feature the same basic sports-bar-and-restaurant concept and serve the same basic foods: chicken wings, burgers, sandwiches, and the like. The new restaurant can’t rely on the same distributors and suppliers. A new business plan is needed.

• What steps should the new restaurant take to create a new business plan?
• Should it attempt to serve the same customers? Why or why not?

This New York Times video, “An Unlikely Business Plan,” describes entrepreneurial resurgence in Detroit, Michigan.

• 48 Chris Guillebeau. The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future . New York: Crown Business/Random House, 2012.
• 49 Jonathan Chan. “What These 4 Startup Case Studies Can Teach You about Failure.” Foundr.com . July 12, 2015. https://foundr.com/4-startup-case-studies-failure/
• 50 Amy Feldman. “Inventor of the Cut Buddy Paid YouTubers to Spark Sales. He Wasn’t Ready for a Video to Go Viral.” Forbes. February 15, 2017. https://www.forbes.com/sites/forbestreptalks/2017/02/15/inventor-of-the-cut-buddy-paid-youtubers-to-spark-sales-he-wasnt-ready-for-a-video-to-go-viral/#3eb540ce798a
• 51 Jennifer Post. “National Business Plan Competitions for Entrepreneurs.” Business News Daily . August 30, 2018. https://www.businessnewsdaily.com/6902-business-plan-competitions-entrepreneurs.html
• 52 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition . March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf
• 53 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition. March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf; Based on 2019 RBPC Competition Rules and Format April 4–6, 2019. https://rbpc.rice.edu/sites/g/files/bxs806/f/2019-RBPC-Competition-Rules%20-Format.pdf
• 54 Foodstart. http://foodstart.com
• 55 “Hugh Jackman Journey to Starting a Social Enterprise Coffee Company.” Giving Compass. April 8, 2018. https://givingcompass.org/article/hugh-jackman-journey-to-starting-a-social-enterprise-coffee-company/

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Data Tracking Plan: Step-By-Step Guide for Creating One

What is a data tracking plan and how to create one? How does it support data collection and informed decision-making in SaaS organizations?

If you’re looking for the answers to these questions, you’re in the right place!

Let’s get right to it!

• A data tracking plan is a document outlining a company’s analytics strategy. It defines which data to collect and how to do it.
• Tracking plans serve as a single source of truth and help organizations ensure consistent and accurate data collection to enable data-driven decisions.
• Clear guidelines enclosed in the tracking plan drive data democratization by fostering independent data analysis, and collaboration between teams.
• A clear tracking plan helps ensure alignment between data practices and laws and regulations. It also provides transparency and an audit trail.
• A tracking plan benefits teams and stakeholders from across the organization, like, product teams , marketing teams , or UX designers.
• Event data is one kind of information to include in the plan. This is information about user actions across the journey , such as sign-ups and feature engagement .
• Event properties add context to event data, which enables more detailed analysis .
• User properties enable better user segmentation and help teams deliver personalized experiences for different user groups.
• Organization properties are account-level characteristics that enable software customization or can help you identify account expansion opportunities.
• Client-side events are tracked in user interfaces, such as clicks , while server-side events are actions that are initiated on the servers, like API requests.
• Data can come from sources like web analytics or product analytics tools , user engagement software, CRM platforms, or feedback tools. Integrations enable data consolidation for comprehensive insights .
• When creating a tracking plan, first define your business goals and corresponding metrics for measuring progress, for example, the activation rate when trying to improve user activation .
• Next, map the user journey and identify relevant event data points to track.
• Finally, use a spreadsheet to create the plan. Update it whenever your analytics strategy changes.
• Want to see how Userpilot can help you collect event data? Book the demo!

What is a data tracking plan?

A data tracking plan is a document that outlines your analytics strategy: what kind of data to collect and which data collection methods to use for it.

Data tracking plans serve as a single source of truth for teams and help ensure that relevant data points are captured consistently and accurately to support data-driven decision-making.

What are the benefits of data tracking plans for SaaS companies?

Data tracking plans help organizations ensure that they collect the right data. They also improve communication between teams and reduce the risk of falling foul of external regulations.

Maintain consistency in data collection

A well-defined data tracking plan ensures consistent and standardized data collection across the company. This consistency is crucial for accurate and reliable analysis, informed decision-making, setting realistic goals , and evaluating performance.

Moreover, by establishing standardized data collection practices, you can reduce data redundancy. This streamlines data storage and management processes – and optimizes costs.

Enable data democratization

Data tracking plans play an important role in data democratization.

As they provide clear guidelines for data collection and reporting, they enable teams and individuals within the company to collect, analyze, and access relevant data on their own. Consequently, they can make informed decisions without relying on data analysts or specialists.

What’s more, a tracking plan can improve communication and collaboration between teams. That’s because it defines consistent data metrics and terminology, which helps various teams develop a shared understanding of the KPIs and how to interpret data.

Assist in compliance with regulators

A data tracking plan aids in compliance with regulators by ensuring that data collection, storage, and usage practices align with the relevant laws and regulations.

By clearly outlining the types of tracked data, the purposes for which it’s used, and how it’s stored and protected, a data tracking plan improves transparency and helps the organization maintain a clear audit trail.

Finally, by reflecting on their data collection practices and security measures, a SaaS company can actually minimize the risk of data breaches, unauthorized access, or mishandling of sensitive information.

Who does a tracking plan help?

Data tracking plans help teams and multiple stakeholders from across the organization.

• Senior leadership can communicate goals and what data they need to track to measure progress effectively.
• Developers can better understand what data tracking to set up to satisfy the needs of the various stakeholders.
• Product teams can clearly explain what data they need to make informed product decisions and learn how to obtain it independently.
• Product marketing teams can find out how to obtain insights into user behavior and preferences to tailor messaging , optimize campaigns, or improve user onboarding.
• UX designers can effectively gather data on user interactions with the product to identify pain points, optimize touchpoints, and create intuitive user experiences.

Which customer data to include in a tracking plan?

The exact data points that you include in the tracking plan depend on the objectives. However, let’s check out some common types and examples.

Events are all the actions that users complete across different touchpoints in the user journey. Depending on the complexity of the product, your tracking plan will include 10-30 core events.

Apart from individual events, you could also track custom events that include a number of independent events in one. For example, these could be using all the features that are necessary for activation.

In your plan, specify the name of the event as well as the reasons for tracking it and what data type it is, for example, numerical values.

Event data examples

You should track events that offer insights into the aspects of user behavior you’re interested in.

For instance, if you’re focusing on user activation , ‘account created’ could be one activation event to track. If your focus is on user churn , a key event to include in the tracking plan would be ‘subscription canceled’.

Event properties

Event properties are additional pieces of information or attributes of key events tracked in your event tracking tool . They provide context and detail about the event and allow for a more granular and insightful analysis.

Event properties examples

Again, the event properties you include in the tracking plan will depend on the event and your goals. For example, if the event is ‘created account,’ we could have properties such as UserID, FirstName, LastName, Email, and DateAccountCreated.

In addition to properties, it’s good practice to include expected values for each of them. For example, for UserID we would have ‘system generated ID’ and for FirstName ‘user specific name.’

User properties

User properties are attributes or characteristics of individual users of your product. They offer additional context and details about users and help you better understand their behaviors, preferences, and interactions.

This kind of property allows you to segment your users and offer them personalized customer experiences , including onboarding flows or support tailored to their unique needs and use cases.

User properties examples

In many instances, the user properties can overlap with event properties. For example, you could have their UserID, FirstName, and LastName.

Examples of other properties are their subscription plan, geographical location, device type, language, customer feedback, surveys, or support tickets.

An expected value example for SubscriptionPlan could be ‘starter-growth-enterprise.’

Organization properties

Organization properties are attributes or characteristics linked to the business that is using your product.

They’re used to track user activity at the account level. Any kind of information that isn’t associated with a specific user but provides information about multiple users is an organization property.

Such properties can be useful for product customization or to identify account expansion opportunities.

Organization properties examples

Examples of organization properties include OrganizationID, OrganizationName, SubscriptionValue, or UserNumber.

Client-side event or server-side event

In addition to event name, description, data types, and expected values, it’s advisable to distinguish between client-side and server-side events in your plan.

Client-side events are tracked and recorded directly on the user’s device or browser. When a user interacts with the product, these events are captured on the client side.

This is done either by attaching a tracking code to each feature or tagging them in analytics tools.

Server-side events, on the other hand, involve tracking events on the server where the application is hosted.

Including information about whether it’s a client-side or server-side event helps teams identify the source of the data.

Client-side/server-side event examples

Examples of client-side events are all user interactions with the UI, for example, clicking a button or submitting a form .

Examples of server-side events could be API requests or account authorization.

Data source

Apart from client-side or server-side events, data can also come from external systems.

For instance, you could track web traffic in a web analytics tool, the conversion funnel data could come from a product analytics tool , and the data related to feature performance, customer satisfaction, and usability , from the customer engagement tool.

Thanks to integrations , you can bring all your data together and act on it in a single place, and once set up, users don’t have to worry about which tools are used to track it. However, this kind of information needs to be in your tracking plan.

Data source examples

There are plenty of possible sources that your data could come from:

• Web analytics tools, like Google Analytics
• Product analytics tools , like Amplitude
• User engagement tools, like Userpilot
• CRM systems, like HubSpot
• Email marketing platforms, like Mailchimp
• E-commerce platforms, like Shopify
• Customer support software, like Zendesk
• Survey and feedback tools, like Typeform

4 steps for creating a good tracking plan

Let’s now have a look at how to create a solid tracking plan.

1. Identify business objectives and metrics for tracking data

For starters, you need to define your business goals. That’s the reason why you’re going to collect the data. In our case, there’s one goal: to improve user activation.

Next, decide which metrics you’re going to track to measure progress. The activation rate will be our North Star metric. In addition, we’re going to track the number of sign-ups, key feature adoption rate, and onboarding completion rate. With the latter, we’re also going to measure the conversion rates between different onboarding steps.

2. Map out the customer journey for the relevant goals/KPIs

Once we have our goals and metrics to track, it’s time to map out the relevant stages of the user journey and identify all the touchpoints. As we’re focusing on increasing the activation rate, our focus will be on what happens after the user signs up for the product.

This task could be pretty complex because users usually take different paths to activation, and you need to consider them all.

3. Determine the event data points for tracking customer data

Now that the map is ready, it’s time to zero in on particular events and their properties that you’re going to track.

This is the stage where you have to identify the key features that users need to discover to be considered activated as well as all the activation milestone events.

For example, for Userpilot , installing the Chrome extension is a major activation milestone. The question you’re answering is simple: has the user done it? It’s a yes/no question, so the data type is Boolean, and the expected values are Yes/No.

If it’s a yes, you may also want to know when this happened, so include a timestamp property in the plan. Apart from that, you want to know the UserID.

4. Create the tracking plan and regularly update it

We’re nearly there now. All that is left is to put it all together in one document.

You don’t need any special tools for this, a spreadsheet will do nicely for creating a tracking plan. This doesn’t need any explanation, really. Create a table, label the columns, and populate it with the information you’ve gathered up to this point.

One thing to remember is that a data tracking plan is a living document.

As your needs change, it needs to be updated regularly. Do you want to track a new event or event property? Add them to the plan. Don’t need to track the user property anymore? Remove it. Migrating to another analytics platform ? Amend the plan.

This is important because what’s not in the plan shouldn’t be tracked.

A well-designed data tracking plan helps SaaS organizations to maintain data consistency and integrity and is a vehicle for driving data democratization. It also helps teams ensure compliance with external regulations.

If you want to see how you can track events and collect user data in Userpilot, book the demo!

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What is a Tracking Plan and Why Your Business Needs One?

A tracking plan is a document used across an organisation that helps coordinate the different stakeholders using customer data collected from websites and applications. It contains all the data points coming from interactions with customers, trying to ensure that data is accurately collected, responsibly managed, and integrated efficiently across teams and platforms . 

In that sense, a tracking plan s erves as a reference document for improving your analytics strategy . For example, a tracking plan monitors how users journey on your website and apps. As a result, you can create a better customer strategy when you better understand the users' behavior.

It should contain all events and properties you track from your customer interactions, so that each team member will have a reference document to understand what your data is telling from your users and customers. In addition, all your customer’s data points will be centralized in one single place, so that your organisation will no longer have to create and maintain various spreadsheets or data repositories.

It describes the individual events you track and user properties that add context to those events. It’s also essential to clarify the use case behind each event you track, particularly as your data operation scales.

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What is the purpose of tracking? 

Tracking data leads you to increase the performance of the business and offer customers a pleasant experience. To get there, it is necessary to have the correct data, analyze it and understand the customer behavior. 

‍ Data tracking is also necessary for measuring the success of your marketing campaigns by providing insights about which actions bring the best results, which marketing channels are the most effective, and which lead to conversions. Based on accurate data, you will know your visitors' preferences, and you can create personalized campaigns.

A tracking software will help you follow everything more quickly because it brings all your data in one place, such as your events, campaign naming, and descriptions.  

Who benefits the tracking plan?

A tracking plan helps any data person, like data analysts, product managers, app developers, or marketing analysts, detect all data collection activity changes, improve data quality, and track users' interactions. In addition, it provides a roadmap for developers to implement data tracking efficiently and serves as a key reference for analysts and product managers responsible for interpreting the data. As such, a tracking plan also serves as a collaborative tool that connects both of these teams.

‍The primary purpose of tracking data is to analyze, organize and obtain information about your analytics events and user data. With all data coordinated in a central reference, any data analyst, product manager, app developer, or marketing analyst can make better and more efficient decisions. In addition, being a collaborative document, every department that touches customer data can take input from it.

Ready to track your data?

Would you like to know when your data is broken in just a few minutes? With just one line of code, Trackingplan monitors your analytics  and notifies you every time something goes wrong. 

It is straightforward to configure and install; it uses the information you already collect for other uses without modifying the code of your Front-ends, Apps, or your analytics stack. Trackingplan will help you to: 

• Discover every data point you are collecting with your existing Analytics tools, such as Google Analytics or Amplitude, and your Marketing or Sales integrations 
• Find problems in the events, properties, and user attributes you are sending, and enforce rules your implementation should fulfill 
• Understand your User Acquisition and track your Marketing campaigns 
• Receive alerts when your users' behavior changes significantly, or a traffic anomaly has been detected

With Trackingplan, you automatically audit and monitor your data collection technologies and user paths to ensure accurate and secure customer data. Contact our team for more info, or try Trackingplan for free , and start monitoring your data and get real-time notification if something goes wrong with your analytics, marketing automations, pixels or campaigns.

Getting started is simple

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How to Create a Customer Data Tracking Plan?

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