Big data is critical to business success because it provides leadership with important insights and information. Large enterprises use sophisticated systems to track data and often have internal analysts on their team to crunch their numbers. Or, they hire outside experts to do it for them. Yet, any enterprise can take advantage of big data, no matter its size, especially if one reframes one’s definition of “big.” Businesses can use their data to better understand their customer needs and buying patterns to further develop strategies that could impact sales. Insights like those developed with data become amazingly useful to any size enterprise!
Slay Your Fears!
We’ve all heard people say, “I’m really not a numbers person.” Perhaps they use this as their excuse for avoiding using data, much less big data, because they might feel reluctant to dive in and give it a try. One does not need an MBA or finance degree to begin working with the data associated with one’s business, regardless of its size. Anyone can learn and understand at least a couple of the key metrics that impact how they operate and what drives financial success.
Those who are reluctant to launch into data analytics can start with some baby steps. First is identifying two or three key metrics they want to better understand about their business or their customers. Once they have these key metrics identified, they can then focus on getting the data they need to help better understand what drives these metrics and how to use the data to increase enterprise performance. Then those metrics become the fundamentals that shape their thinking about their business strategies and what they need to do to better achieve their business goals.
Business leaders should focus on how the data they have or can gather links to their business strategies. The key is to search for the critical data metrics that influence decision making. Look for the information that provides insight on the variables that impact the business’s revenue and profitability.
Use the Information and Tools You Already Have
One does not need a complicated computer system or major data management firm to figure out what one is already using in one’s business for data capture. Frankly, many organizations are not fully utilizing the existing software they already have to gather basic information.
Frequently, software programs have the capability to export information into analytical programs such as Excel. Once the data is put into an analytic format, it is possible to do all sorts of data evaluation based on key variables such as customer demographics, profitability, geographic location, purchasing patterns, buying volume, etc. Reviewing data points for various time horizons provides a comparison to see how much is changing during different time periods. Engaging in analytical assessments of one’s data often provides valuable information on shifts in the business’s target market and identifies new sales opportunities. One might even uncover areas of business vulnerability before they cause major challenges.
Many companies do not fully access the information they have already obtained about their customers. Taking time to input detailed information into a Contact Relationship Management (CRM) system can be a first step. Consolidate the insight from the business’s other information systems to develop a comprehensive customer profile. Then drill down into the information on the customers and tie them to financial measurements such as sales volume, degree of profitability or key target marketing variables.
It is not uncommon for smaller enterprises to have their most valuable customer information written down on sheets of paper or in someone’s head. Entering the business’s data into a CRM or Excel establishes the foundation for a more robust data assessment. Then one can begin to pull insights by looking carefully at key variables. Business leaders will have a more effective way of targeting their desired consumers as they drill down deeper into the data to see which customers are most valuable to their business. One will be able to make better decisions if one is using thoughtfully mined data. This also minimizes the business’s vulnerability to not having good information to work with if a key employee becomes ill or leaves.
Create Metrics and Dashboards
When one begins working with data, it is essential to create metrics and dashboard reports focusing on the key information so it can be tracked on an on-going basis. Then one should set up the mechanisms and policies that ensure it is tracked by the employees. Holding one’s team accountable for reliably gathering the data and tracking it in a timely manner are also important steps to effectively use data.
Business leaders can certainly do some of this work themselves, but it might be even better to loop in key employees who are better skilled at putting it together. The leaders can then review the information and draw conclusions.
Another option is to work with an outside consultant who does this all the time and is not going to struggle with a learning curve. Outside experts can help one discover details one might have overlooked while managing the enterprise day-to-day. One is likely to gain better insights — and move much faster — by bringing in outside expertise for a short duration engagement rather than trying to struggle through setting it up by oneself. It is not a cliché that “time is money.” One can invest in learning from an expert and then take it over once one develops the foundational skills and has gained some confidence in one’s own abilities.
Learning to leverage data is essential to impacting the growth and success of any business. As business leaders become more comfortable using their initial metrics, they can add on additional key metrics, using a disciplined approach, and continue to look for more metrics to measure.
Have fun with it! You will soon have a robust data management system that you and your team can use to more effectively manage your business and your customer relationships. This will provide you with new pathways for business growth and enhanced success.
Jill J. Johnson, MBA, is the president and founder of Johnson Consulting Services, a highly accomplished speaker, an award-winning management consultant, and author of the bestselling book Compounding Your Confidence. Johnson helps her clients make critical business decisions and develop market-based strategic plans for turnarounds or growth. Her consulting work has impacted more than $4-billion-worth of decisions. She has a proven track record of dealing with complex business issues and getting results.