Data. Have you ever wondered ‘how much is being produced every day’? The number is so big, that its hard to comprehend, but what’s even more mind-boggling, is the pace at which data generation is growing…
Over the last two years alone 90 percent of the data in the world was generated.
Yes, that’s right. Read that again if you need to, but we’re currently living with an explosion of data. And with the Internet of Things, increasing internet and social media use, and so on, this is growing at a faster and faster pace.
Scary as this may seem, it presents an opportunity for smart and forward thinking businesses.
Why Use This Data?
Better business performance, its as simple as that. The data shows (pun intended 😀) that businesses that use data perform way better than those that don’t.
So here are 5 key steps to start on the path to profiting from data.
1. Understand the Data You Already Have
Much of this general data is freely accessible, and therefore open for use by businesses to glean intelligence, analyse performance and make strategic decisions. But this is a big and complex step that should only be undertaken when a business has solid information processes in place.
The logical first step is to look in-house, at the data that you’re already collecting within your business. You may not know it, but you’re already collecting lots of information through multiple sources such as:
- accounting systems
- social media accounts
- e-commerce store
- Google Analytics
- CRM, eg Mailchimp or Active Campaign
- Facebook and Google advertising
2. Define Relevant KPI’s
Key Performance Indicators are measures of the performance of a business against its most important objectives. KPI’s are unique to each business, although there are many measures that are commonly used across businesses.
Some common KPI’s you might consider using are:
- Lifetime customer value
- Average purchase size
- Social media engagement %
KPI’s can be backward looking or forward looking. Its important that we learn from the past, but don’t get stuck there, so using some KPI’s that drive future results is critical. These measures are often called Key Performance Drivers, eg number of sales calls made, or number of presentations made. These measures look at past data, but are based on actions that drive future performance.
3. Don’t Get Bogged Down, Keep it Simple
The important word in Key Performance Indicator is ‘Key’. With the explosion of data that we’ve highlighted, its tempting to look at more and more metrics. The common result being that focus is diluted and we fail to see the forest for the trees. More information is not necessarily better information!
4. Monitor and Act
Regularly monitoring your performance keeps you abreast of potential issues with your business and gives you the ability to pivot, try new things and take advantage of opportunities. Fast action is key to maximising opportunities, as it will give you a greater chance of operating in a less competitive environment.
But if you’re not regularly reviewing your performance, you will miss these opportunities. Depending on the metric, you may report and monitor your KPI’s daily, weekly or at the very least monthly.
5. Have a Process / System That Makes it Easy
You need to put data to work for you, not let it drag you down. Pulling it together on spreadsheets, spending hours sorting through the numbers, this is not the way to go and will only damage your business.
The best businesses have processes and systems in place so that the vast majority of the data manipulation and processing is done automatically. Reports are generated and are easily available either through scheduled emails or through up-to-date dashboards.
If its not this easy, then the majority of people will give up over time, or at least look at the data less and less.
So what systems and processes should you put in place to ensure you’re profiting from your data?
Well that’s the topic of my next blog where I’ll be reviewing a number of performance dashboard apps that can dramatically simplify this process.
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