As a business owner with a technical background, I have an insider's perspective on analytics. I understand and love this technology, and I created many of our dashboards. I'm also an avid user of these dashboards, relying on insights from them to manage and guide Policy Works more effectively.
Here’s a few reasons why analytics matter to me.
Analytics are increasingly available to smaller businesses.
Analytics are designed to be usable by business owners, who are less interested in the technology than the insights provided. They give owners and managers another tool to help reduce the fog that surrounds business, enabling better and faster decisions.
We have incorporated extensive analytics into our business and learned firsthand how they can improve results.
Analytics are descriptive.
Analytics tell you what's happening in your business, so you can better understand, plan and act. At this level, they’re like the spreadsheets that you've used for years. They answer questions like:
- How much are we selling?
- How profitable are we?
- Who is buying?
Although it might be similar information, don't underestimate the power of a picture! Humans are visual creatures and we can process and detect massive amounts information through visual media. Trend lines, bar charts, scatter plots, waterfalls and other graphical representations convey scale, momentum and other dynamic elements much more powerfully than text. They can help you to pick out the signal from the noise, enabling you to decide and act with greater confidence.
Analytics help you understand your business.
I’ve played with different ways of classifying our client base, so I can better understand where we are successful and where we need to improve. We had a pretty good handle on what was working, but as an experiment one day I tried a new cut through the data.
I combined a couple of classifications and when I checked the results, I saw a much clearer picture of our sweet spot. The new view showed more clearly than ever where our sweet spot lies. Ask questions of your analytics. You don't want static reports. You want the ability to zoom in to see the details and zoom out to see the big picture. Filter the results to show an area of interest. Play with them and see what you discover.
Analytics can verify your instincts.
We made some changes to our business and I seriously doubted that they were working. On the surface, we were seeing results. But, I was confident that other factors were at play and the changes hadn't had the intended impact. I needed evidence to convince the team that a change in direction was needed.
I turned to our analytics and investigated some of the other factors that I knew were involved. To my surprise, I discovered that I was wrong. The other factors I was so sure about didn't materialize under a closer inspection. The shock of proving my gut wrong was a great wake-up call for me.
Trust your gut but rely on evidence to make your decisions.
Analytics helps discover trends in your business.
To accompany a new sales campaign, we built dashboards to track results. And the results looked good! But after several months of monitoring the campaign and comparing with our overall financial results, we noticed that we weren't seeing a corresponding lift. Obviously, something was missing from our picture.
We started looking for the missing revenue. We found it in our services revenue. A new buyer behaviour that we hadn't seen before was counteracting the sales effort. Having discovered a new trend, we were able to act accordingly.
Remember to cross-reference the different views of your business and investigate discrepancies. You might find a mistake in the dashboards; or you might discover something new about your business.