Measuring your data is a great way to figure out how to grow your business. Your are dealing with a constant flow of information, from sales numbers to customer retention statistics and beyond. You can search for trends in that data. Listening to what the data says is the first step towards improvement.
Too many small businesses fail to track their data. This holds them back from growing and reaching the next level. You can use several tactics to get better at utilizing data metrics for your business.
Know Your Metrics
With so much information to think about, it is important to focus on the key data points. You can usually sum up the health of your business with one or two pieces of data. This data will be something different for each business.
Everybody should pay close attention to sales numbers. You can measure this as a number of products sold, or as the amount of profit you make. The more money you have coming into the business, the better you are doing.
Customer retention is a more subtle but still important metric. It’s hard to earn new customers. You often have to create content and do advertising for years to build up an audience. Therefore it makes sense to track how well you are doing at keeping these new fans around. High customer retention will earn you a lot of money in the long run.
You can look beyond these metrics. Cost of acquisition, customer satisfaction, employee retention, the list of metrics goes on and on. Experiment to find the ones that are best for pushing your business forward.
Get a Dashboard
You need a visual interface to parse through your company’s data. It is hard to keep track of all that stuff in your head while looking at a list of numbers. There are many different platforms available that can show you visual graphs of your data in whatever format you’d like.
Most metric dashboards are the result of the saas application development boom of the last decade. There are so many good services you can use online at an affordable price. Data scientists used to painstakingly assemble the kind of graphs that metric dashboards can now generate automatically.
The entrepreneurs of old would have paid a fortune to gain access to these tools. It would have saved them time and earned them money. You can take advantage of your own luck by using the dashboards to look at your data.
Develop Hypotheses From Your Data
You shouldn’t just stare at the data absent-mindedly. Make a plan and test your assumptions. If you think that customer retention will go up by adding a customer survey to the receipt, try it! Whatever your idea is, the fastest way to find out is to try it while measuring the data.
That’s why watching the data is so useful. You can try ideas that you have and get real feedback from the marketplace on what is working. This will save you years of chasing down bad ideas.
Data is the missing ingredient for a lot of business owners in today’s fast-changing economy. There is a lot to get confused about. New technologies and new cultural trends come around with each season, seemingly leaving the old world in the dust every time. Following your data is a way to anchor your intuition in hard facts that won’t go away.
There is a learning curve with watching your business metrics. Like any other skill, it will take a few tries before you get great at it. Don’t let this bother you. Once you get great at watching the data, you will develop a new skill for improving your business.