Turning Data into knowledge

  1. How much data do you have in the business?
  2. When was the last time you turned it into knowledge?

Every business has a lot of data; all those invoices, sales opportunities, marketing activity results, proposals, CRM entries – the list is endless. Data is, I’m afraid, not a lot of use to anyone and if it wasn’t for the belief that we will, someday, make use of it (and the occasional law) we’d throw it away pretty much as soon as we had used it the first time.

Turning all that data into useable knowledge is something that can help your business improve its performance.

 

Data into information

The first stage is turning the data into information. What I mean by this is translating it into something that makes sense to the reader rather than piles of numbers and letters. Your accountant does it, at least, monthly for you when they turn your invoices, receipts and bills into management accounts – they tell you what you have to work with in the next month. You can also do it to help improve your business performance. Some suggestions:

  • What is the average spend per client and how does that vary between clients?
  • How many times per period (you choose) do your clients buy from you?
  • When are your peak trading periods?
  • How long do you keep a client?

 

Information into knowledge

The next stage is turning the information into knowledge. What does the information mean and what can I use it for? Lets look at the possible answers for the questions above:

Question: What is the average spend per client and how does that vary between clients?

Answer: £152 – £638 per month

Knowledge: What related products/services can you sell to the lower spenders? Are they aware of them?
Question: How many times per period (you choose) do your clients buy from you?

Answer: Three times per month

Knowledge: If you can sell to them one more time per month, you add at least 33% to your bottom line and probably more.
Question: When are your peak trading periods?

Answer: September to December

Knowledge: Get more staff or products in time and you can further increase your sales in this period.
Question: How long do you keep a client?

Answer: 4 months

Knowledge: Keeping them just one month longer adds 20% to revenue

 

With a little bit of analysis, how much knowledge could you get from your company data?

Business and Football

Which type of football does your business look like?
What can businesses learn from football?

Each version of the beloved game has different rules, different playing periods, team sizes and injury levels/quantities.

The reason I use football here as a sporting metaphor is the varying stop and review periods:

Footballers have one real aim: to get the ball down the other end and into the goal/across the line more times than their opponents do. Small business owners aim to win customers more frequently than their competitors do. That way they grow their profits and meet their goals.

The use of rest periods in football as a business metaphor is to compare and contrast how often small business owners take time out from the business to look at what is going on; to work on the business instead of in the business.

Working in the business brings in the money as you deliver on each customer order. Working on the business ensures the company is heading in the right direction, is meeting its targets and everyone understands is what direction they should be pushing.

Within large businesses there are layers of management to be doing this type of work constantly; for smaller businesses this isn’t the case. There is rarely enough money to have somebody doing this, unless you consider that to be the sole purpose of the Managing Director. The problem is that even he, or she, often gets pulled in to the business; meeting customers, going to sales meetings, talking to the bank etc. So what do you do?

In my humble opinion, you monitor constantly and assess periodically. Monitoring constantly doesn’t mean looking over everyone shoulder every minute of the day. Football managers are lucky as they have the TV cameras to record everything and the statisticians to produce relevant statistics. Small business owners should identify what is important for them to assess and then ensure the necessary information is being recorded constantly.

What do I mean by this? Lets consider some examples:

  • If you are a manufacturing business, keep records of raw material costs, the time used in the manufacturing process and the rate at which stock is moving.
  • If you are a services business, record the time used to deliver on each project.
  • If you are a retailer, look at the footfall patterns, the stock levels and ensure the date codes are being watched.

Above all else, make sure you know where your sales opportunities are coming from, no matter what type of business you are.

If you look at your financial year as a football match, how often should you be assessing and communicating? Again, let’s look at the various versions of the beautiful game:

  • Mob football had few, if any, rules. I doubt there was a manager and the free for all meant that lots of people got hurt or simply buggered off because they didn’t know what was going on.
  • Sunday League teams will stand at the side of the pitch at half-time for a fag and an orange segment, listen to the manager for a couple of minutes and then slag each other for either not doing something or doing it badly.
  • Premiership teams will return to a private space (their dressing room) to receive, hopefully, constructive information about the performance and direction on how to improve in the 2nd half of the game.
  • Aussie Rules and American football break the game into quarters. This means there are more opportunities to assess and communicate so the players know what is going on and how it can be further improved (or fixed dependent upon the score at the time).

Which do you think is better for your business?

How often do you take time to assess the performance of the business and then communicate matters to your staff?

How often do you listen to them about what ideas they have that could improve the business and generate more profit?

I know 50% of my marketing works, just not which 50%…

The best person to ask which part of your marketing worked is………… your customer.

when was the last time you asked a prospective client how they found you and then recorded it somewhere?

As a small business your time and your money are both valuable commodities.  Your money you may get back but your time is lost forever.  If you could have some of both, by knowing which marketing activities are working for you, how much better do you think your productivity would be and how much healthier your bottom line you be?

By asking your customer how they found you, you gain from a series of learnings:

  • You can see which routes to market are generating  the most suspects, prospects and sales.
  • You can match your marketing campaign expenditure to income and generate campaign return on investment (ROI) statistics
  • You will have an insight into the quality of your pipeline management and sales techniques (from the rate of drop-off through the sales pipeline)

The information generated and the insights achieved allow you to then make quality decisions around your marketing activities and budgets.  Even if you simply stop and pocket the money usually spent on a poor performing marketing campaign, your profits will improve.

For further information or assistance in improving your marketing performance, give me a call on 07770 970 557 or click here and I will call you.

I hope this is useful to you and look forward to hearing from you soon.

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