Running a successful business is a lot like baking the perfect cake. We’re huge fans of cake here at Creative Analysis (in fact coffee and cake with clients is our favourite way to engage with them!) but that’s not why we’re writing this blog post.
You’re probably wondering how business and cake are related if we’re not referring to a cake business. Well, just like putting the wrong ingredients and using the incorrect methods can negatively impact a cake’s taste, smell, appearance, shape and consistency, a lack of measuring and monitoring of different ongoing processes within your business can mean you miss opportunities to avoid failure further down the line.
We’re big fans of the way technology enables us to run businesses more efficiently and effectively, ultimately leading to business freedom (almost as much as we’re fans of cake!). You can’t accurately assess how successful something- whether it be a project, product or process- has been or if you have reached your goal unless you measure it and with so many handy online tools available now there’s really no excuse not to measure and monitor.
But what should you be quantifying and evaluating to ensure your business is mixed to tasty success?
Here’s 10 Analytic Ingredients Your Business Kneads to Understand and Use:
1) Place Some Social Media Insights in a Bowl…
A bit like getting close family to sample part of a cake before you finish baking it, social media insights are probably the type of analytics you’re most familiar with. Facebook Insights, Twitter Analytics, you name it, they tend to be free and easily accessible, enabling you to glean clients’ and potentially interested people’s honest opinion of your business in real-time.
Social media data like this can highlight unfulfilled client needs, cut customer service costs and draw attention to customer satisfaction problems that result in a loss of business reputation or custom. Once you know about these things you can set to work improving them! For example, products and services can be further developed by real-life feedback from customers left on your Facebook page.
2) Throw in Some Customer Engagement….
An analytical area that is still advancing is that of Customer Engagement. It entails a business mapping a client’s complete ‘journey’ both on and off-line from not knowing about your product, through to inception, captivation, product use, and loyal commitment.
These analytics measure how well (or unwell) your business encourages your clients to engage with your products or brand throughout interactions on their ‘journey’ to being your client. How well do you bake to your client’s tastes and appeal to their appetite? How do you get their taste buds’ attention?
In today’s world where choice is available in abundance, having lots of people (or customers) simply like your cakes won’t be enough to retain their custom. Instead, you have to find innovative ways of tempting (engaging) them to retain their loyalty and make a profit.
3) Sprinkle in Some Customer Lifetime Data While You’re At It…
Just like an food ingredient is only useful before its ‘best before date’, you need to assess how long a client is likely to carry on buying from your business, throughout the complete lifetime of your business relationship with them. This reveals how valuable they are to your business over that particular time period and determines how often they’re likely to purchase from you during this time.
Some ingredients perish quicker than others. Likewise, for your business a client might prove profitable immediately after their initial purchase, but for other businesses it may take many purchases. Knowing which one applies to your business is key.
From there you can concentrate your marketing efforts on the clients who have a higher chance of buying from you. You can also dictate how much you can afford to spend on captivating that client if you’re aware of their worth to your business over their lifetime relationship with your enterprise.
4) Stir in Some Customer Profitability Info at the Same Time…
You wouldn’t use a poisonous or foul tasting ingredient in your cake mix would you? Similarly, Customer Profitability Analytics helps you weed out which clients are actually profitable for your business. ‘But all customers are profitable aren’t they?’ you might be asking yourself. This is a common misconception.
Generally the 80/20 rule or Pareto principle is likely to be at play. Here, 20% of your clients equate to 80% of your revenue, whilst 20% of your clients account for 80% of your client-related costs.
Though it’s not nice to see clients as gold mines, if you can’t tell the difference between your money-makers and money-drainers, you won’t know who to dedicate the most time and resources to.
5) Bind Together With Some Cash Flow Analytics…
Where eggs bind a cake mixture together, knowledge of how much money is flowing in and out of your business is vital in determining the stability and health of your business. Cash Flow data also estimates what will happen to your business financially in the long-term, helping you avoid problems in the future.
You need to monitor your cash flow to know if you can afford to keep your business machine churning, paying wages and the rent of your premises etc- your business depends on it.
6) Blend in Generous Helping of Product Profitability…
You may know what you’re cake taster’s favourite group of cakes are but do you know their exact favourite cake that’s guaranteed to go down a treat? The majority of brands know how profitable their company is but not many go out of their way to delve into the profitability of each service they provide. Many businesses are unaware of which products are losing them money.
Though it’s not easy, you should always try to find concealed or specific profit and losses relevant to each product you offer. If you don’t, you’re likely to implement poor strategies.
7) Whisk in Some Market Research and Data…
Spending lots of time toiling over an unpopular cake no one will want to eat? We don’t think so! Likewise, Market Size Analytics need to be used to indicate how many people want or might want to buy your product or service and how often they will want it.
‘Might want’ is an essential part of Market Size Analytics as your need to be familiar with your market potential to avoid wasting lots of money going into business in a declining or over-saturated market.
8) Add A Pinch of Non-Customer Analytics To Taste…
You don’t want to be competing with your business rivals to attract the same ‘ideal client’ because, sooner or later, you’ll fade into the ‘white noise’ of the market. Instead, it can be beneficial to investigate what people who are not your client-base reckon to your product/services and why they’re not buying from you.
Tapping into more niche markets or relatively untouched parts of larger markets can be a great opportunity for business growth.
9) Bake the Right Way with Real-Time Project and Program Evaluations…
You wouldn’t incinerate a lovely cake by popping it in the oven at the scorching wrong temperature would you? Project and Programme Analytics help you deliver your great products in the right way, avoiding flawed processes. They can reveal how successful your business projects and processes have been and how you can make future improvements, such as enhancing the efficiency and quality.
This type of analytics uses the criteria of whether the project or process has met scheduling and budgeting criteria and achieved the goals they set out to accomplish.
10) Voila! Now For the Icing on the Cake: Pricing Analytics!
You’ve made your delicious cake now you should get the price your deserve for it! Pricing data involves discovering how much your clients would pay for your service before they actually pay for it and is a vital tool to raise revenue, particularly in markets where competition is fierce.
You can shape fees to cater for different sections of your client-base to make the most of ‘low handing fruit’ and those willing to part with a little more money for your service.
Increasingly more Pricing Analytics are accessible in real-time so you can tweak your prices and meet competitors in real-time when they adjust their prices.
Have we missed out any analytical ingredients? What analytics do you track in your business? Let us know on Twitter and Facebook!