What does your business data tell you? How often do you look at it? Do you take the time to understand it and leverage it to make the optimal business decisions? All too often in my coaching, I find business leaders are running their business on gut feeling and do not use any data for decisions. Not sure what is worse – no data or old data. The range includes misunderstanding where sales leads are coming from, employee productivity, and most important – who are the best customers. Historical data is interesting for benchmarking but with all the dramatic changes since COVID during the past year – time to relook at your data and refresh it.
1) Effective marketing and sales data– Professional marketers will often point to MQLs (Marketing Qualified Leads) generated as success. This is a top of the sales funnel activity and is an important measurement. It is the interest generated from a specific activity or campaign ready to hand to sales. The true measurement is progression through the sales funnel and ultimately how much business was booked. This will give you a true ROI on the investment. I would rather have fewer MQLs that lead to closed won business vs a higher number that never books. This is just one example of understanding your sales data. How about your win/loss ratio? What can you adjust to improve it? Hard to know without the baseline data.
2) Employee productivity – Every business has unique measurements. What are the KPIs (Key Performance Indicators) for your business or industry as related to people? Are you measuring activity and think that leads to productivity? Maybe on a production line that could be true. With so many knowledge workers in business – how are you setting standards and measuring the results? Have you ensured everyone on the team knows what good looks like? Do you understand how to measure it?
3) Most valuable customers – No matter if you are selling direct or indirect through resale partners – do you know the ones that are most profitable to you? No matter the industry or business I have worked with or in – the 80/20 rule is consistent. Typically, 80 percent of your business comes from 20 percent of the customers. On the flip side, 80 percent of your support calls and issues come from 20 percent or fewer of your customers. Too many books teach that every customer is valuable and do not consider that at times there is a mismatch. That can be either in product fit, service capabilities, or just misalignment in expectations. Rather than prolong the agony on both sides, find a way to make a clean exit. This may lead to an opportunity for future business.
Think through
Data is everywhere. Are you using the information readily available to improve your business? Are you coaching your team members to peak performance? Do they know what that looks like and how they are being evaluated? Are you taking care of your best and most profitable customers? Are you working on an exit strategy to off board customers that are no longer a fit? Using relevant data is a piece of the puzzle. It requires open communications. Do not fall into the trap of “management by dashboard”. The data gives you a piece of what you need to run an effective business. Be sure the data is recent and relevant.
Feel free to post comments or email them to me. Small Business, Big Lessons® – What data are you using and is it fresh and relevant?
Small Business
About the Author:
Gregory Woloszczuk is an entrepreneur and experienced tech executive that helps small business owners grow their top and bottom line. Gregory believes in straight talk and helping others see things they need to see but may not want to with a focus on taking responsibly for one’s own business. He and his wife, Maureen, started GMW Carolina in 2006.
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