In one of the not-so-rare synchronous events a blog by Thom Singer arrived in my inbox on the topic of business analysis. He makes some good points about business analysis being the realm of larger companies with big budgets and not so much that of small and medium businesses.
It's a drum that I seem to bang a lot with clients and that is the issue of understanding the critical dynamics within a business, knowing where customers come from, what they do and why they deal with you - or why they don't. For small business there are ways to streamline the process of collecting this information but much of it can be done with old fashioned methods.
Simply, if you know that Action A leads to Result X - if you get a good result then you can do it again. You can do it more often and predict your results over time. If you don't know what results or lack of results come from certain actions (or inactions) you can't. Simple as that.
Marketing Not Gambling
If you don't have that business intelligence for your business then you don't know a whole lot of things that you need to know. You don't know what's working. You don't know what will improve your results and you don't know what it is costing you aside from the money you spend, when you pay for that marketing initiative, in lost opportunity and sales not made.
Just like paying for that Yellow Pages ad and never tracking sales. That's not marketing or even advertising. That's gambling.
Just like hiring employees you want to perform well... but you never instruct fully as to their role and what you expect from them, never manage effectively, have no useful reporting process to monitor their progress and never bother to review their need for training or resources. What is that?
Moving to online presence that a company generates, from the website to use of social media platforms to promote the business it is clear that the same kind of Business Intelligence (BI) is not understood and so not being captured.
Not All Websites Are Created Equal
A cursory investigation of a local chamber shows websites that are poorly constructed, not functioning in any way to generate interest and not likely to be found in a search. Oh some of them look good! Most of them don't and to Google they may as well be a blank page with nothing showing on the site.
Who is to blame? Ultimately it comes down to the business owner to make sure they know at least enough to know when they are getting quality information and not bragging from someone who talks a big game but produces nothing of substance.
Commonly I ask business owners "How do you access your website traffic analytics to check?" All too often the response is a blank expression. This is the first question I ask when assessing a current strategy because it is clear - that if they don't know the answer to this question ... there is no point asking them anything more technical about the site because they don't know.
How then, do you make a reasonable judgement about the value of the work done so far on the website and how do you reasonably then commit to good actions going forward?
This lack of understanding results and Cause and Effect in business is not confined to poor results. It could be that the results are good - but the numbers are not suffiently understood to allow the owner to recognise that hey - this advertising we just did has not only been good - it has given a result 3x better than anything else we have ever done! And suddenly the cost has a context by which we can measure performance objectively and track against future advertising.
You cannot get good business intelligence by guessing!
Of course the response from some business owners to questions of this nature can be "Oh I'm too busy for that!"
Too busy to know if the money you are spending is being wasted.
Too busy to know if you're not spending the money that could be increasing your profit three-fold.
Measuring is important. Too often, people go mad measuring metrics that don't matter. And neglect those that do.
Here are some simple business intelligence items that you should know now:
Where do I find the traffic statistics for my website?
Where is traffic to my website coming from?
Where is it not coming from that it should be?
Where are my customers finding my business?
Who are my top 50 customers who have spent the most with me over the past 3 years?
How much have they spent with us over the past three years?
How did they come to be our customers in the first place?
How many other customers have they referred to our business?
That's some that I like to start with. These are simple questions to which you should already have the answers. If you don't then you need to fix that... that's the first step.
The second step is to learn what to do with it.
Quick And Dirty Business Review
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Think Social Media Is No Use For Your Business? Think Again.
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Purpose Then Strategy - Case Study Starting Your Website
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