While there are no guarantees, if the answer to each of the below questions is yes, then there is a strong probability that analytics can help your business.
- Do I have challenges or unanswered questions about my business?
- Am I collecting data about the challenges or unanswered questions?
- If the questions are answered or challenges are addressed, can action be taken?
Do I Have Challenges or Unanswered Questions About My Business?
If you don’t answer yes to this one, congratulations on being the first business without any challenges or unanswered questions! Rarely will there be a business that doesn’t have any challenges or concerns, not matter how big or small. If you’re struggling to think of problems or challenges, here are some examples from various industries.
Business Owner: We’re trying to help customers understand when they don’t need to do anything, when they should do a repair, and when they should consider replacing their unit. We rely on our technician’s experience, but think there has to be a better way to not make customer’s spend unnecessary money, while also reducing the risk of breakdowns that lead to emergency situations.
Business Owner: We currently have a manager who owns the purchasing of inventory. While the manager has gotten better at reducing spoilage, there is still enough spoilage that we feel it on our bottom line. Our manager position has turned over a number of times, so we’re worried that we will have to continue the cycle of manager’s learning when and how much inventory to order.
Business Owner: We have a few foremans that bid on various landscape jobs, some are good. However, some often overbid or underbid. Each time we overbid or underbid, we risk losing out on potential revenue.
It is also helpful to keep in mind these don’t have to be problems or questions that will allow you to quadruple your sales, however they also be impactful enough that the benefits (savings, additional sales, etc) outweigh the costs (time and money) of doing the analytics.
Am I Collecting Data About the Challenges or Unanswered Questions?
Regardless of the size of the company, the answer to this question can often be “no”. This is understandable! If you haven’t had a need in the past, why would you be spending additional time and money on collecting it? This doesn’t mean you’ll never be able to get value out of analytics. If the benefit of answering the question or challenge outweighs the cost (time and/or money), then it can be revisited once enough data has been collected.
The ideal world for both myself, who offers analytics consulting services, and a business is a “yes, we have all the necessary data sitting in a file/database/system”. Unfortunately, this is rarely the case. Instances where this is most likely are retail stores, restaurants, or other high frequency transaction-based businesses that require a system or software to manage sales.
Using the same examples from above, here is what this could look like.
HVAC Company, “Yes, But” Example
Business Owner: Each of our customers get a PDF of their system’s health. We also track emergency calls and replacements in our Customer Relationship Management system.
This will require putting the PDFs into Excel before analytics can be pursued for the use case.
Restaurant, “Yes” Example
Business Owner: Since spoilage has been a major concern of mine, yes we keep detailed records of what we order, how much we order, and when we order it.
Since the owner is already tracking this information, the appropriate analytics approach can be identified and used.
Landscaping Company, “No” Example
Business Owner: We don’t itemize our bids unless the clients asks, so most of our bids are just a total number without any details about the materials, labor, or worksite.
This will require the company to document the necessary information about each bid they think is necessary. To avoid a “yes, but” situation in the future, they should begin putting the bids into Excel or another system.
If the Question is Answered or Challenge is Addressed, Can Action Be Taken?
If you’re the owner of the business or the primary decision maker over the challenge or question, this question is often an easy “yes”. There are obvious exceptions for legal or ethical considerations.
In larger or more complex businesses, this final question may present more of a challenge with complex decision making dynamics.
When done well, analytics can add a tremendous amount of value to your business. Making sure you focus on the right questions/challenges is an important first step. Using the 3 question approach, you can get understand if analytics can help your business. If you think your business could benefit from analytics, reach out to Simplified Analytics for a free consultation to see if we can help!