Small businesses have more access to information now than ever before.
A sales platform, for example, can identify customers’ behaviors. Website analytics can identify the source of visitors. Email marketers can see what engages their audience. Accounting software tracks revenue and expenses. Even social media can serve up numbers, trends and insights relevant to these efforts.
At first glance, having all this data seems like an advantage.
And in many cases, it does.
But there is a flip side to this coin, because having too much of a good thing can turn it to dust
The truth is that a business owner reviewing ten dashboards each morning is not necessarily going to be smarter about their business than someone looking at five really important numbers
The difference lies in turning information into decisions: using what you know to make a better choice for your business than you would have otherwise made.
Here are eight practical ways small businesses can use their information more wisely – and stop cluttering their lives with yet another dashboard.
1. Start With the Decision, Not the Data
One of the easiest ways to get mired in report creation is to gather information without first deciding what you want to know.
Instead try asking yourself (or your team) questions such as:
Why did sales drop this month?
Which of our products spur the most repeat customers?
Where are prospects dropping off in the sales process?
What marketing channel actually gets customers to buy?
Once you know what you want to learn, it’s easier to determine what information you actually need to make that happen.
This tactic also helps to keep teams from “collecting” the information available simply because it exists.
2. Choose a Small Set of Numbers That Actually Matter
You don’t need every number – just the numbers that actually drive your business.
A local service company, for instance, might be more interested in tracking leads, opportunities, average customer value and repeat customers than the dozens of metrics it could pull from social media.
An online retailer might want to pay closer attention to revenue, conversion rate, average order value, repeat customers and product performance.
It can help to think about what you’d actually do if a particular stat changed dramatically during the course of the week.
If the number wouldn’t actually drive a change in behavior, it’s probably not worth tracking on a day-to-day basis.
3. Separate Activity From Results
Businesses often track activity because it’s easy to measure.
Marketers can show how many posts they’ve published. Sales representatives can report how many calls they’ve made. Web analysts can share how many website visitors there were during the past 24 hours.
Again, this isn’t necessarily a bad thing.
But activity is not a proxy for results.
More posts doesn’t always mean more customers.
More phone calls doesn’t always equal more revenue.
More visitors doesn’t mean better leads.
Instead try asking yourself questions that pair activity with an outcome.
For instance:
How many of those 20 sales calls produced qualified opportunities
Did those 10 new articles attract visitors or leads
Did that new advertising campaign pay off in terms of quality customers
4. Build a Weekly Decision Review
Far too often, information gets collected without being actually used to make a decision.
To help ensure that numbers get reviewed and deployed, build a quick weekly review.
It doesn’t have to take an hour – even 20 minutes or so is sufficient for a small business.
During this short meeting, focus on three things:
What changed
Why it might have changed
what should be done next.
The last bullet point is important, because it forces you to make a decision based on the information at hand.
A good way to start is by saying something like:
Our weekly report shows sales dropped 12% from last month. We think it has to do with X, Y and Z. Here’s what we’re going to do about it.
5. Use Customer Questions as Business Data
There’s often good data hidden in the questions customers ask.
Whether in the form of emails, chats, sales calls, reviews or commonly asked questions on the website, prospects and customers will often ask for information that sheds light on what’s happening in your business.
Suppose, for instance, that customers keep asking whether a certain product works for a specific application.
This is valuable information, because it suggests you might want to update your product descriptions, create an FAQ or white paper, or offer additional training or services.
Similarly, if prospects seem to hesitate at the same point in the sales process due to a misunderstanding, it’s worth looking more closely at how that issue is explained.
One easy way to start collecting this information is to take note of any questions asked by customers, and file those that recur somewhere accessible.
6. Compare Trends Instead of Obsessing Over Single Numbers
One day of wild success or failure can be misleading.
If your website’s analytics suddenly show a huge increase in traffic, it might be a sign of something, but it could also reflect an anomaly.
Similarly, one day of increased sales could reflect an uptick in business – or the fact that your online catalog was unusually attractive on that day due to a special promotion.
Rather than looking at discrete numbers, focus on trends.
See if there are patterns from one week to the next, and correlate those trends with other numbers if possible.
7. Turn Reports Into Questions
A good report should raise questions, not just answer them.
For instance, if your report shows that returning customers spend more than new customers, ask why that might be the case.
What products are they buying? How long does it take for them to become repeat buyers? What leads to their initial purchase? Can we do anything differently to accelerate the process?
This also works withany other stat.
In fact, there’s value in taking every important stat and turning it into a question.
8. Use Automation to Remove Repetitive Work, Not Human Judgment
Automation can be helpful for information management and analysis, at least for the parts of the process that are repetitive.
For instance, a business might use technology to pull together the information it needs for its weekly report, sort through sales leads, send out customer reminders or organize requests in some fashion.
That said, automation shouldn’t replace human judgment.
A computer or app may know that sales dropped, but it doesn’t understand that a big customer had a sudden change in priorities or that a competitor launched a similar product at a steep discount or that a popular item was out of stock during a busy selling period. It’s still up to humans to decide what to do with this information.
What Small Businesses Can Do This Week
Small businesses don’t need a large-scale data collection initiative to help them make better decisions.
Instead, try picking one business-related question to answer this week, such as:
Which marketing activity produced our best customers last month?
Once you pick a question, determine what information you need to answer it, and create a report containing only that information.
Next, take whatever insight you’ve gained and determine what single thing you can do with it.
Repeat this process again next week, and eventually you’ll find that you’ve built a far more thoughtful process than most businesses have in place today.
Turn Report Review Into Report Decisions
There is no shortage of information available to the modern small business.
In fact, there is often too much of it.
The key to getting more value from the information already at your disposal is to use it not as a report builder, but as a decision-maker.
Start with the question, rather than the data.
Track the numbers that matter most, and pay attention to the kinds of information that lead naturally to decisions.
Use automation to free up time spent collecting and organizing information, so that you can spend more time interpreting it and taking action.
Remember, more data doesn’t always equal better data.
The best decisions come from choosing what information to use, and what to ignore, based on what it can tell you about your business.
