How to use data to make better decisions within your business
How do you know what is and isn’t working within your business if you don’t measure the results? And by results, I mean the numbers.
Metrics and data can sound scary, and many business owners push measuring them down to the bottom of the list. You know you should be looking at them, but you don’t know what, how or when.
Your business metrics will tell you the health of your business. You can use the data to track what is working and then double down your efforts on that service or product to drive even more sales. Or they can highlight what isn’t working and you can make changes, pivot or even decide to stop putting time, energy and money into that product or marketing effort and re-focus elsewhere.
Sometimes we use our gut to make decisions or focus on the wrong numbers, which lead us to take the wrong action within our business. You may have what you think is a hugely successful launch within your business where your revenue hits six figures. However, because you aren’t monitoring your data, you haven’t spotted that your costs are incredibly high and your profit is on a few thousand. Or you are spending thousands on a Facebook ad campaign which has only created you a few hundred pounds in sales. If you track your metrics, you can spot these problems and change them to improve the situation.
You may be focusing on selling your high-ticket coaching offer, which takes up most of your time and energy. However, your lower-priced digital products are very popular, despite little marketing efforts. They are more profitable than your coaching and don’t take much time for your team to manage. Doubling down on these could be a very profitable and steady income stream. But if you aren’t looking at your data, you would never know this and miss the opportunity.
Data-led decisions tend to be the best decisions.
Measuring your business data doesn’t need to be complicated, and you can absolutely do this yourself within your business. The value this will add, and increased control and understanding you will gain within your business are enormous!
What should you measure in your business?
It depends on what your goals and strategic plans are. More is less within the world of data, especially for small businesses. You should focus your metrics around your goals so that you don’t get bogged down in measuring too much, getting overwhelmed or focusing on metrics that aren’t important to your business growth right now.
First, you need to write down your business goals and then decide what key performance indicators (KPI’s) you need to measure to track their success. Basically, what number do you want to achieve?
HERE ARE SOME EXAMPLES TO HELP YOU:
Profit: £20,000 per month or £500,000 in 2021
Increase sales by 30%
Sign up 20 people to my next course
YOUR PROFIT
Track your sales, minus your costs, for each product/ service and your business as a whole. Don’t just focus on your revenue; you may have great sales coming in, but if you are also spending a lot on your team or marketing, then that will quickly eat into your profits.
YOUR VISIBILITY/ MARKETING
Don’t look at vanity metrics such as likes or followers, you need to track your conversions to your website and sales pages. You may have tens of thousands of followers, but if they aren’t converting into sales, then something isn’t working.
Track where traffic to your website comes from, such as social media or affiliate links or ads. And then track what happens when they get to your website; which website pages are most popular, how long are people staying on your site. Are those people then buying from you? This is your conversion rate; the number of visitors divided by the number of people who click to purchase or book a discovery calls.
You can also make sure you are maximising your marketing budget and targeting your spend in the right way by measuring your cost per lead. Divide your marketing spend by the number of people who buy from you. You can do this for individual campaigns or as a whole for all marking spend within your business.
LAUNCHES
When you are launching, you need to keep a close eye on your conversion metrics to make sure that your marketing efforts are effective and driving the sales you need. You should be monitoring your conversion rate at each stage of your process; traffic being driven to your webinar or lead magnet, then how many people go to your sales page, and how many of these people then make a purchase. If you are paying for ads, you need to make sure that they drive traffic and conversions.
By monitoring all these metrics, and checking them daily, you will know where you need to focus your efforts or make changes as the metrics go up or down.
CUSTOMER EXPERIENCE
You can measure customer retention, repeat customers or clients who you upsell on to other services, % of people completing your course or you may use customer feedback and measure positive feedback scores.
How often should you measure your data?
It depends on what you are measuring and how important it is to you. Usually monthly works but if you are going through a launch you will want to monitor them daily, or even hourly!
What do you do with the data once you’ve collected it?
You use it to make informed and intentional decisions within your business.
For each KPI you are measuring, ask yourself these questions:
What is this data telling me?
What are the opportunities?
What do we need to double down on?
What isn’t working?
What needs to change?
These numbers will tell you what is and isn’t working within your business, and this allows you to take action and fix the problems and maximise the wins.
You can make sure you are focusing your time and money on the right things to achieve the goals you have set within your business.
Sign up for our weekly emails giving you a weekly dose of business advice; strategy, mindset, team growth and how to run your business more efficiently.
