As a business owner, you’re faced with making decisions every day. Some decisions are minor, while others can have a big impact on your business’ future success. Regardless of the type of decisions you’re making, they can often get overwhelming, especially if you don’t feel you have enough information to make the best decisions for your business.
Fortunately, there are several resources available to provide business owners with the data they need to guide their company to success. Data is the heart of strategic decision making. It leads to insights that business owners can then turn into choices and actions that improve their business.
So what type of data should you look for? Here are the top three information sources to measure to grow your business.
When completing a revenue analysis, the first thing you should look at is revenue comparison, both year-to-year and month-to-month. A steady increase year-over-year indicates that your business is healthy and growing, meaning that you can start allocating resources to fund profitable activities or expand your business. A decreasing trend should prompt you to take a deeper look at what’s causing losses and then make corresponding corrective changes. Uneven increases and decreases may indicate that your business is responding to market influences, in which case, an adjustment to your strategies may be in order to create more stable results. Once you identify your business’ trends, you can use that data to create realistic, numerical goals for your business to meet during the next year.
Month-to-month comparisons are important to knowing if you’re on track to meet your annual goal. They’re also useful for analyzing seasonal trends and testing the effectiveness of promotions, products, special pricing, partnerships and other tactics. When completing your revenue analysis, you should also pay special attention to your products and services. Which ones were most lucrative? Which ones created the most costs? Which ones hold the biggest potential to increase revenue?
The purpose of analyzing competition is to determine the strengths and weakness of competitors within your market and identify strategies that will give you an advantage. A competitor analysis is also a useful benchmark that you can use to gauge the success of your business. This data can take a little more work to find, so start by making a list of all the businesses within your target market that you contend with for buyers’ dollars. Sometimes this may not even be businesses that offer the same products or services you do.
Once you have your list, start researching. Visit your competitors’ websites, social media accounts and listings. Check their online reviews. Gather information on their services, business structure, products, pricing, programs, branding, value proposition and mission/vision. Then, see how you measure up. This should give you a clear idea of how you compare, specifically, where you’re falling behind, where you’re leading and what makes you different. This will give you the information necessary to effectively allocate resources, create successful strategies and better market your business.
This is where a customer loyalty program can come in handy. Customer loyalty programs make it very easy to track customer purchasing habits and preferences. But if you don’t have a loyalty program in place, you can still gather data on your customers several different ways. The most effective method is surveying your customers. Be sure to check your online reviews (which should be monitored daily). Because small businesses tend to be more community-driven, flexible and personable, sometimes you’re able to find out a lot about your customers through conversations you have with them while they shop. No matter how you get the information, pay special attention to their needs, preferences and dislikes. Identify their pain points and figure out a way that your business can alleviate those problems. Keep track of this information and measure customer satisfaction when you put new changes in place. When it comes to making decisions for your business, this is one of your most valuable sources of information.
We’re not going to lie, collecting and analyzing data takes a lot of work and time. If this is something you enjoy doing manually, more power to you. But if you like spending time on other things besides researching and crunching numbers, there are a lot of resources available that automatically perform these tasks for you. EMG’s system for this is Eliot Insights. Eliot Insights allow merchants to collect information on revenue, competitors and customers as well as manage their online reputation through ads, listings, review management and customer feedback features. If you’re interested in learning more about how Eliot Insights can help you grow, protect and simplify your business, click here.