Businesses often fall short of their goals because they don’t understand how to acquire and interpret data. Some cling to outdated reports that don’t reflect the contemporary market, some get bogged down in so much information that it becomes meaningless and others don’t report at all, preferring to rely on instinct.
The truth is it’s never been easier to create sophisticated reports on many different aspects of your business. If you’re wanting to improve your business health, it may be time to change or elevate your metrics.
Start with the fundamentals
When it comes to reporting, you’ve got to start with the basics: profitability, costs and mission. These indicators give you a pretty good idea of the health of your business. What they don’t provide however, is answers.
The right questions
If you want helpful answers, you need to be asking the right questions. Why are sales down in the year to June? What is the cost of new client acquisition verses client retention? Which tasks are taking up the most of my employees’ time and do they generate revenue? Being specific with your line of enquiry will allow you to attain better data. But good data’s not enough. Ultimately, you’re trying to identify patterns of cause and effect, determining which business decisions lead to which outcomes.
A great example of this is in the movie Money Ball, where Brad Pitt’s Coach Beane pulls together a team of baseball’s misfits and careers on to victory. The reason: he understood the data. Previously baseballers were paid top salaries because of their batting average. But that doesn’t necessarily mean you get runs. Getting on base means you get runs. So, by calculating how often a player got on base and dividing it by their salary, he was able to put together a winning team on a shoestring budget. By finding the same links in your reporting, you may be able to shift your strategy and improve outcomes.
Tech provides solutions
So, we get the premise but how do you actually generate the reports? Data acquisition is always the first step, and luckily, with modern technology it’s easier than ever to attain and analyse.
Most of you will be using a CRM, but potentially not making use of its full functionality. Explore how it can measure and quantify workflow. This will help put the right staff on the right projects, and assist you to understand exactly what tasks are generating revenue and which are work for no reward.
In terms of online marketing, Google AdWords and Facebook Ad Manager provide you with detailed insights about what posts people like, and what content leads to conversions.
The other thing you might want to consider is automated reporting. There are all sorts of options out there and rather than report weekly or monthly, you can often do it in real time, saving on data entry in the process.
Soft metrics are gaining traction as companies move beyond profitability as the sole benchmark of success. Usually they relate to notions that are not so easily quantifiable such as brand perception, social impact and employee satisfaction. Obtaining data for these metrics is also different, as it may require surveys or face to face interviews to ascertain, or even the services of an external consulting or analytics firm. In terms of brand perception however, modern software has advanced to a point that you can now aggregate online mentions to give some sense of how things are tracking.
Any good company strategy should have in place robust reporting structures that are agile enough to move with a changing market and workplace. Aim to review your metrics at least annually to make sure you’re getting the full story. Change your line of questioning, and report on things outside the box to see if they provide any insights or unusual revelations.
The only certainty in business is change. Luckily, we live in a world of big data, and if you know how to report on it, you could be well on your way to business success.
If you would like to find out more about how you can improve the reporting of your business, please give us a call on 03 5443 0344.