Every Business, no matter how small, has ‘data’ – accounts, hours worked, contacts and if you start looking you will discover much more. All this information can be used to measure how well (or not) your business is performing and where it can be approved.
It is no longer only the luxury of large companies to be able to access, analyse and exploit data. The cost of collecting, storing and the tools helpful in discovering useful information has dropped dramatically in the last few years which mean that all businesses such as the local Baker, Plumber, School, Builder etc. can all benefit.
Where do you start and what do you need?
The first step is to think about your business and make a list of what information you have or can easily get. Your accounts are the easiest as you or your bookkeeper/accountant most probably has the information in a computer format. Every business has customers and suppliers and you most probably have a list of their names and contact information. By linking these two sources you can create some ‘KPI’s’ (Key Performance Indicators) such as Revenue per Customer and Profit per Customer. If you have the accounts data, for example per month, then you can see facts and trends such as: do any of my customers have a purchasing pattern such as the first week of every month? If so, do I always have enough stock available? This may help you purchase stock just before you need it making sure your return customers don’t have to wait thus increasing service value.
Ok, I see that I can get information from my data but how do I collect the data and make it available for analyses?
To start you need to be able to store digital data so you need a computer system. This can be a PC preferably connected to the Internet. Using our above sources (accounts & customer) as an example, most bookkeeping and customer (CRM) applications have the option to ‘export’ data in an easy to use format such as Microsoft’s Excel. If your business is small and without IT support then try to make sure your ‘Intelligence’ data is available in standard formats and saved in one place, it will make linking the data easier.
How do I analyse my data?
Now it starts to become serious. You will need a tool to examine your various data sources. There are ‘free’, ‘inexpensive’ and ‘expensive’ tools. ‘Free’ tools such as SpagoBI are very useful but not too easy to use. ‘Inexpensive’ and ‘expensive’ are usually tools that start off inexpensive but the more you use them the more expensive they can become. This doesn’t have to be a problem because when you start using an analyses tool you don’t need all the functions and multiple licences. If the intelligence you gain from using the tool benefits your business and increases your income then you can possibly afford to invest more in the tool.
The most popular data analyse tools are Qlik, Microsoft BI, Tableau and various others that can be found via the Internet. They usually have a free to use single licence but will charge if you want more than one licence. They are also available on-line which means that you don’t have to install the software and can make your analyses online and use not only a PC but also a tablet or smartphone. Tutorials can be found online for beginners and experienced users. The tools will ask for your data to be uploaded and as you have stored your data in standard formats in one place this should be simple.
Once you have created an account, built a simple analyses/report and uploaded your data you can start to get more ambitious. As you now have the basics of ‘Business Intelligence’ working you can define more KPI’s and collect extra data sources, but, don’t go over the top. A KPI should be useful and have a business benefit. Think about information that would be useful to your business and if you have the data to create the KPI. Rome wasn’t built in a day – take your time and experiment, don’t forget you still have a business to run and once you start analysing your data and start seeing useful and interesting results you can find yourself immersed and even addicted to data analyses.
What data sources could be useful?
Depending on the type of business you have there is most probably a branch organisation and they might have valuable information available or even ready-made KPI’s. The Chamber of Commerce and Government departments are also a good source of information. How about collaborating with your local business groups, together you can share possible work, costs and swap experience.
A couple of examples of ‘other’ data sources are:
- Weather, build an Excel file with the date and weather conditions. This could be useful when looking at your historical data and seeing how your sales are effected by the weather. It may help you make decisions on increasing or decreasing certain parts of your business at certain times of the year.
- Events, build an Excel file with events that may have affected your business. These could be a public holiday, flood, strike, moon landing, election, anything that when examining your data at a later date can give you a ‘reason why’ you may have a peak or trough in your trends.
Maintain these files daily and it will become habit and not be too much work. If you collaborate with others you can share the workload and data. Using free online storage such as Dropbox, Box etc. you can easily share data with others.
- Big Data. There are various data sources that you most probably hadn’t thought of using such as Facebook or Twitter. Maybe your business has been mentioned on Social Media. There are tools available on the Internet to access Social Media data. See if your advertising has caused a stir? What are the comments? Might not be nice but then you know what to improve. Might be nice but does that show in more sales? Feedback is the best way to know what customers think about your business.
- If you have a website then you can use Google Analytics to see which parts of your website have been ‘clicked’ on. Again, various tutorials are available on the Internet to help you add Google Analytics to your website.
Where should I be careful?
There are a couple of things you should be extra careful about.
- Security, make sure your virus protection is up to date. Only use renowned software and services. Don’t make it easy to ‘lose’ data, there are many examples of USB sticks being found in a taxi!
- Security, your data is your data. If you have someone to help you then make sure they are conscious that your data is not available to third parties without your consent – make them sign a statement to that effect if necessary. A registered Accountant has professional guidelines for this but does someone helping you with your analyses and reporting?
- Privacy, new European privacy regulations mean that information you have about your contacts (customers, suppliers, members etc.) must be protected. You cannot ‘swap’ your customer list with another business for example. Your contacts can complain if you misuse (even by accident) their information and you could even be fined!
Why do I need Intelligence?
The world is changing fast. Within the last twenty years we have seen the rise of the Internet, almost everyone has a smartphone, shopping is done 24 hours a day 7 days a week from the comfort of your own living room – with the products delivered free the next day!
Within the next few years your kitchen equipment will order your food, your car will recharge itself while driving and tell you when it needs a service. Automation will make your job easier and give you more free time (we hope!).
Traditional business is also changing. Local shops are closing but delivery services are increasing. Equipment informs suppliers when preventative maintenance is required so fewer repairs are necessary.
By evaluating information about your business you can keep one step ahead and make relevant changes when you can and not when you must.
Case 1 – Group of independent food shops in a small town.
A Baker, Butcher, Greengrocer, Fishmonger and Delicatessen are working together to complement each other’s products and to enrich their customer’s shopping experience. They are all independent with just one shop each, all in the High Street of a small town.
Together they provide their customers with a loyalty card where the customers, in exchange for some personal information, can save points for discount on various products and free events such as ‘bake-offs and barbeques. The personal information they ask for is: Name and address, household configuration of mother/father/daughter/son etc. including dates of birth, profession of bread winner.
Every time a loyalty customer makes a purchase it is registered in the group’s intelligence system.
Analyses of the collected data has shown that when the Butcher has minced beef on special offer, the Greengrocer sells more salad and the Delicatessen more Chianti wine. By sharing this information they agree to coordinate promoting these products with the Baker including Italian bread and the Fishmonger Italian seafood for the starter. Sales improved and the group coordinated other menus after receiving feedback on Social Media.
Case 2 – Sports Centre
A Sports Centre provides facilities for Soccer, Hockey, Athletics and Tennis as well as having a Fitness Centre. Member’s information includes Name, Address, Gender, Age and which sport they take part.
Using the attendance data and members profiles the Sports Centre can identify sporting combinations such as an interesting percentage of Hockey players also play Tennis. By offering all Hockey players more information on the Tennis facilities they encouraged even more Hockey players to play Tennis. They also promoted Hockey to the Tennis players and were surprised by the number of Tennis players that started playing Hockey.
Case 3 – Garage
With three showrooms and workplaces, a small car dealer is able to identify periods that customers are expected to need service and repairs and the most likely parts needed. Linking their Intelligence system to their Newsletters they subtly remind their customers to make an appointment.
In the workplace the mechanics always add information about the vehicles to the customer’s data: the service or repair, mileage, vehicle condition (cleanliness, dents etc.), extras. In the course of time a good profile of the driver’s is created and the garage is able to offer vouchers for the Carwash, air fresheners etc.
Questionnaires are also sent to customers after each visit and using the feedback the dealer is able to keep their Customer’s loyalty high.