You’re sitting on a goldmine of data that can help you improve and grow your business—the key is knowing where to look and how to use it.
Within your business, there are myriad data points that can provide insight into how you’re performing and how to improve or grow. To begin, you must recognize where to obtain this data and how to present it in a centralized fashion that allows you to make actionable conclusions based on the information. It’s easy to overlook a potentially telling data source or struggle to make heads or tails of all the metrics at your disposal. Here’s how to utilize business intelligence from internal sources such as your support center, accounting department, marketing efforts, website, social channels, and sales team, as well as external channels such as clients, vendors, and competitors.
Before beginning your business analysis, make sure you’ve clearly defined your company’s mission and vision. This will help you determine what you’re trying to achieve with this data. Is your goal to land new customers or do more business with your existing client base? Do you pride yourself on exemplary customer service? Do you have a unique brand voice that distinguishes your organization from competitors? The better you understand your business, customers, and long-term goals, the more you’ll get from your business intelligence efforts by accurately identifying the metrics that matter most to your organization.
When managing your business, be sure to assess leading indicators as well as lagging indicators. “Most businesses look at lagging indicators. This is like looking in the rearview mirror,” says David Scarola, chief marketing technologist of The Alternative Board®, an organization that brings together business owners to overcome challenges and seize new opportunities with a combination of peer-advisory boards and business coaching. “They are informative, but there’s nothing you can do to impact them positively. Leading indicators are forward-looking. These are indicators that you do have a chance to affect. For example, the number of sales is a lagging indicator, but the number of leads is a leading indicator.”
When you review a metric like leads, you still have a chance to change things, as opposed to only reflecting on last quarter’s sales. Scarola notes that leading indicators can be challenging to monitor and may require more planning and analysis, but it’s worth the effort: “Once you have done this work, the management team is able to look forward and make adjustments to positively affect results,” he says.
The role of DaaS companies
There are vendors and consultants that specialize in business intelligence who can help you make the most pertinent conclusions from your research. Data as a service (DaaS) companies aggregate and analyze data and spot trends, as well as anomalies. Whether or not it makes sense for you to invest in a DaaS partner will depend on the size, skillset, and bandwidth of your organization; the type and volume of data sources you’re reviewing; your existing system for centralizing the information; and the types of conclusions you’d like to make from the analysis.
“Having a stream of current, accurate data is square one. If the right vendor is selected, this data can include qualitative and quantitative data from a variety of incompatible systems,” says Brian Robertson, founder & CEO of VisiQuate, a business intelligence firm and service provider. “The right vendor for today’s business specializes in complex data integration and can help intelligently join data from various systems into a single dataset and business analytics platform.”
He explains that sample insights include increased A/R days compared to possible contributing factors, such as customer satisfaction or even economic indicators like the price of gas; declining or increasing sales analyzed by product line, sales representative, or even geographic area; and customer complaints logged by the call center and posted on Yelp® compared to Facebook likes and interactions.
But your business may be able to make these types of conclusions on its own. “Very large companies employ data warehouses that serve as collectors of data from all their disparate systems that can be used to run analytics and generate business intelligence. Not all businesses require this level of complexity,” says Scarola. “Many of them can centralize their data into a MySQL™ or Microsoft Access database and glean insights from them.”
Whether you go it alone or call in a partner, you’ll want to take a look at the following channels.
1. Accounting data
Most likely, your business has an organized accounting system in place. Brynn Winegard, a business expert and professor based in Toronto, Ontario, explains that this is one of the first and most obvious sources for business intelligence. “Make sure to keep a consistent log of everything that is happening in your business. Every receipt should be tabulated, every purchase documented, every sale listed, and all customer invoices recorded somewhere. This information will not only help you at ‘tax time,’ but will ensure you have the most complete picture possible of your business regarding current cash flows, outstanding debts/payments due, outstanding invoices and customer payments, and ultimately, ‘wiggle room’ and profits,” she says.
2. Your sales team
You’ll be able to obtain sales data from your accounting system and identify trends in seasonality, services, or product lines, as well as year-over-year changes; but sales representatives are an additional, often overlooked data source. Of course, you can observe individuals’ past performances, but you can also ask them for predictions on future business and valuable input on your customers and products. They’ll help you identify leading indicators that you still have time to affect, as well as lagging indicators that should inform future decisions. Ask such questions as:
- How many leads do you have? Where are they coming from?
- Are you confident that your existing client base will stay with you? Why or why not? How can we encourage them to do more business with us?
- What products or services are customers and potential customers most interested in?
- How did your customers hear about our business? Are they satisfied with their experience working with us?
- What makes our business unique?
- What would you change about our existing offerings or processes?
What can be most challenging is documenting this type of input and reconciling it with your other data channels. Record the feedback, look for trends, and if necessary, consider investing in a qualitative analytics software solution. “Soft” metrics can be as telling as hard data.
3. Marketing data
Take a close look at your marketing strategies (SEO, advertising, mailers, etc.), and calculate how much sales have increased while the program was active, advises Winegard. “If you have multiple programs happening at the same time, the amount attributable to each program might be a challenge. In general, the rule of thumb is that each marketing program should provide at least a 20 percent return. Of course, ideally you’re returning a return on marketing investment (ROMI) in the hundreds, (e.g., 100 percent, 200 percent etc.),” she says.
Understanding the success of past efforts will help you make better marketing decisions in the future and understand your customer. What marketing message is resonating with your audience? Is it in line with your core value proposition? Don’t overlook live campaigns. It may not be too late to make an important change to a digital ad or SEO campaign, for example.
4. Customer satisfaction/The support center Your customers provide valuable input into your business’s strengths and weaknesses. Take advantage of the internal customer data at your fingertips, such as support center metrics.
“One of the best places to find the kind of data that can help improve your organization is in the support center,” says Jeff Furst, founder, president, and CEO of FurstPerson®, a provider of job candidate assessment tests, Web-based hiring systems, and analytics for the contact center industry. “Whether it’s by analyzing actual customer feedback or periodically polling support employees about the issues they encounter the most, insights from your support center can help you determine the stress points for your customers and how well your organization is addressing them.”
Again, employees can be one of the most valuable and often overlooked knowledge sources. Furst suggests keeping business intelligence needs in mind during the hiring process. Strive to hire observant, analytical thinkers. When you and your team understand this type of data, you can improve customer engagement, retention—even the bottom line. “For example, analyzing data from your contact center to find out what challenges your customers are having with your product can help you determine what’s working, and more importantly, what’s not. This may lead to a product redesign that can capture even more customers going forward,” he says. Don’t forget to analyze your customer service inbox. Consider how many complaints you received over a given time period and what they are related to – for example, a particular product or salesperson.
5. Website data
Website analytics are particularly imperative for ecommerce sites. Understand your traffic—where it’s coming from (source referrals as well as geographic trends to better understand your client) and what causes spikes. Google Analytics™ is a service available for assessing vital web data such as traffic, time on site, bounce rate, and repeat visits.
Patrick Delehanty, digital strategist with Marcel Digital in Chicago, Illinois, notes that website data is valuable even if you’re not selling your products online. “It gives you so many data points. Where are your online audiences coming from? Where are they going when they get there? Are they completing the actions you want them to complete? What content or pages on your site are getting the most attention, or least? How can you improve your website overall? All of these questions can be answered with Google Analytics,” he notes.
Delehanty also recommends A/B testing different website design choices to see how they affect audience behavior. To “A/B test” design options, you will need to work with your technology guru to send half of your site’s visitors to one version of the web page and the other half to a second version. Then, measure which version performed more favorably (i.e., which version garnered a higher click-through rate, drove more sales, etc.) and use the better-performing version.
6. Social Media
Even if your business isn’t active on social media, your customers are! At the very least, monitor social networks like Facebook and Twitter for discussions concerning your business or industry. If you do maintain business accounts, pay attention to the free analytics provided by the social networks, and try to understand what might be causing trends and changes.
“Social media gives organizations an unfiltered source for important customer and potential-customer data,” says Furst. “Organizations looking to establish best practices for applying data to their business models should use social media monitoring tools to collect as much information about current and potential customers as possible and to capture social media feedback to learn more about what their audiences are saying about them.”
7. Your competitors
In addition to reviewing internal data sources, businesses should analyze their competitors. Understand your industry, your competitors’ market share, and as much as possible, their strengths and weaknesses. What can you learn from larger companies? Have they tapped a customer base you have yet to reach? How can you distinguish yourself? Perform your competitive analysis regularly and punctiliously by identifying key metrics to track and presenting them in a centralized manner.
8. Your unique business data sources
“Depending on the offering you provide or category you play in, you might have other data you need to collect, such as supply chain information, new technology platform offerings, the fluctuating price of certain commodities, or trade relations between two countries,” says Winegard.
This information can be particularly challenging to monitor and may require an external source or software. (See “The role of DaaS companies” section.) Identify these metrics, and determine a process for analyzing them routinely.
How to put the data to work
As labor intensive as data collection is, it’s only part of your business intelligence challenge. Scarola stresses that doing something with the insights you’ve gathered is more challenging than collecting it in the first place. “My experience is that the obstacle with developing the right indicators is not technology. Instead, it is identifying the questions that the business owners want to have answered,” he says.
“The sources are typically not the challenge; it is knowing how to use those sources in ways that improve outcomes,” agrees Robertson. The goal of business intelligence is to use the information you’ve collected to make smarter decisions. “For example: A retailer analyzes past consumer behavior to predict what items a buyer might purchase next, then goes beyond predicting to recommending. It is the migration from reporting based on lagging indicators to predictive analytics to prescriptive work-listing that will define successful competitors in the future. The supply chain manager of a wheelbarrow manufacturer sources his plastics from Delaware, his wheels from Korea, his wooden handles from North Carolina, and his tires from Akron. Using predictive analytics, he considers the impact of a potential typhoon in the Pacific, a sawmill strike in Asheville, a better proposal from a new plastics vendor, and an increase in rubber prices. This lets him revise his purchase orders to all vendors involved,” he says.
Make sure you’ve established clear processes and identified stakeholders for gathering data and created a system for housing the information—whether with a simple spreadsheet or a more sophisticated software solution. An effective business intelligence approach should make it easier to share information across your organization. Create an opportunity for your team to review your findings and help you form actionable conclusions based on the results.
Remember, the most overlooked data sources are often the ones right at your fingertips. “The temptation to look for answers everywhere but in your own backyard is all too pervasive,” says Winegard. “Knowing what you’re good at and what you can offer, as well as what you shouldn’t or can’t offer, is most of the battle when determining how you can provide the market value.”
Data collection and analysis may not be the most exciting or simple part of running a business, but it is critical to your success and growth. By taking an organized, multi-sourced approach to business intelligence and involving your team in both data collection and analysis, you’ll make smarter business decisions and help drive true business results.
