In our increasingly digital age, it can be all too easy for a small business owner to become overwhelmed by a sudden glut of available data. It seems like every new gadget or operations upgrade connects to the internet and includes an opportunity to accurately measure something or other to which they previously gave very little thought.
Some business owners make the rookie mistake of collecting as much data as possible, meticulously entering it into spreadsheets, and more or less leaving it at that. Successful entrepreneurs, on the other hand, understand that increased opportunities for data collection can be helpful, but only when those analytics are leveraged. Simply stated, they know the difference between raw data and actionable data.
The time to be impressed by internet-enabled devices that spit out new forms of previously uncollectible data is over. Small business owners, in particular, need to bring an increased level of discernment to data that’s merely “cool” vs. data that can help them increase efficiency and profits.
The best place to start is not by compiling all the data available to you but instead pausing long enough to write down a few simple questions. Only after you’ve decided which questions you’d like to answer can you begin to assess which analytics might actually prove helpful. Listed below are four questions just about any small business owner can adopt or adapt, along with pointers for how newer forms of data can help provide actionable answers.
1. Where are we wasting time?
The difference between time and money is that money can be replaced. Business owners and managers should be setting the tone in terms of effective time management during office hours. When management consistently demonstrates respect for the value of time, that attitude tends to filter down to the frontline staff. Conversely, managers who call meetings for no apparent reason can’t reasonably expect employees to place much value on anyone’s time.
Nowadays, there are many scheduling apps that include reporting features that will allow you to more effectively track how you’re spending time and whether or not that investment is paying off. For example, time-tracking analytics can be cross-referenced against customer billing numbers to assess ROI. This relatively simple exercise can be eye-opening in terms of surfacing high-maintenance individuals who, as it turns out, are not contributing all that much to revenue.
Is the relationship worth the ongoing effort? Time-reporting analytics can help you decide whether to limit specific client contact to certain levels of time commitment or not.
2. Which demographics are falling away?
An investment in customer relationship management (CRM) software can provide individualized feedback on customer preferences, allowing your business to tailor its offerings accordingly. Marketing campaigns can be tweaked to highlight products and services that seem to strike a chord with your regulars. Emails can include a higher degree of personalization. Special events can be designed to respond to feedback.
Additionally, CRM data can chart changes in your customer base and help you do a little exploration. For example, visits to your salon by your 50+ customers may have driven the lion’s share of high-end sales, but those visits have declined precipitously. Is the falloff in any way related to how your business is operating in the wake of the Covid-19 pandemic? Or did your product or service line shift such that your more mature customers are no longer interested?
If the latter, are you OK with that shift? Analytics provided by just about any CRM package should provide the data you need to analyze who your customers are, what they care about, and how you can tailor your business to their needs.
3. At what point do our website visitors lose interest?
Website analytics, in particular, are one area where it’s easy to get overwhelmed by the sheer amount of available data. This is where your ability to formulate relevant, niche-specific questions before you start excavating data is most likely to save you from being over-informed and under-actioned. In particular, owners of appointment-based need to pay close attention to website bounce rates and abandoned scheduling forms.
Did you lose the booking when they read your terms and conditions or when you requested prepayment? Was the user confused by being presented with too many options too soon? Website analytics can provide the when, but you might need to investigate further to find the why.
If, for example, you notice a high bounce rate on a website resource that features one of your most popular offerings, that definitely merits a closer look. The problem might be tied to something as complex as mobile browser compatibility or something as easy to fix as a lousy photo. As you study online analytics, scan for any anomalies as your first step.
4. What do our Wi-Fi analytics reveal about peak business hours?
By encouraging customers to freely use your on-premises Wi-Fi, you can learn a lot. What days and times of the week see the most walk-in traffic? You can use this information to make sure you have enough staff on hand to serve these impromptu clients.
If users sign on via their social media accounts, you can glean further insights from demographic data. Are certain age groups more apt to patronize your business at certain times of day? You can tailor everything from promotions to in-office music choices accordingly.
Proceed with caution, though. There’s a fine balance to be struck between using Wi-Fi analytics to enhance your bottom line and being too nosy. Customers are growing increasingly wary of the data that any service provider collects, so you’ll want to be proactive about this.
A simple disclaimer informing customers that you collect data to enhance their experience with your business is typically sufficient. Not every customer will agree to your terms and conditions, but many will, thereby helping you increase the overall effectiveness of your staffing and outreach.
Analytics can be powerful tools … or they can be powerful distractions.
There is no denying that objective, empirical data is a good thing. The question every business owner needs to address is whether or not specific forms of data can be utilized to foster growth. Depending on the niche you occupy, newer forms of analytics might be interesting but not helpful. Focus on data that facilitates needed changes.
Don’t fall into the trap of collecting and charting data merely for the sake of collecting and charting data. As you encounter newer forms of analytics that can be conducted, stop and ask yourself whether you should. By keeping an ongoing log of relevant business issues you hope to address with data, your data-sifting process will become much simpler.