There’s no denying it — we have access to more data at our fingertips right now than at any other time in history. It seems like every day there are new breakthroughs and new platforms that allow us to store, sort, spin, and visualize all of this data. As a business owner, you’re able to track and measure every interaction that a potential customer has with your brand. I’m not just talking about in-store transactions, either. You can measure website visits, Facebook comments, Youtube video views, and Instagram reposts. Every few months, there’s a new update or SaaS tool allowing you to do an even better job of keeping up with all of your data.
In light of all of this, it’s important to regularly take a step back and ask yourself, “Which pieces of data are valuable to my business, and which pieces of data are noise we need to tune out?” There is no One-Size-Fits-All answer to this question as every business is different. Businesses in the same industry may have audiences who choose to interact with them in different ways. In fact, the answer to this question will probably always be a moving target, which is why this should be a discussion you revisit regularly.
If the process of analyzing your business’s data seems complicated, let’s break it down into some bite sized chunks.
Here are the three things you need to know to make better business decisions.
What pays the bills?
It can be really exciting to see the number of people who like your Facebook page rise every month, and it can be a real source of adrenaline to get a Retweet from that one industry leader who you’ve always admired. However, when you get down to the core of your business, what one or two metrics need to trend upward for your business to flourish. Sales? Leads? In-Store traffic? Subscriptions? Take a hard look at your business and try to narrow it down to two or three metrics that are at the core of who you are and what you, as a business owner, need to accomplish. We’ll refer to these from here on out as your Core Business Goals.
What metrics influence your Core Business Goals?
Now that you’ve established your Core Business Goals, you can look at the rest of the data to see if you can tell what actions might affect your Core Business Goals positively or negatively. It’s often interesting to begin this activity by thinking with your gut. Ask yourself what actions your customers can take on your website that are most valuable to you. Do you care more about the time someone spends on your site or the number of pages they view? Perhaps there’s another metric you think would matter more to your business. For an eCommerce site, this may be a very easy question to answer. For an economic development company, it may be a bit harder.
Also take some time to look at all of your social media channels. For instance, do you think Facebook contributes to your goals? If yes, what Facebook action do you think matters the most? Likes? Shares? Comments? Are there any social media channels you are not currently using that might make sense for your business? Pinterest may not make too much sense for a law firm but might be perfect for a jewelry store. Make a list of the top metrics that you think contribute to your Core Business Goals.
Next, you’ll want to test out your theories. This will take some time and a staff member who lives and breathes Excel spreadsheets. After loading all of your data into Excel, you can create a Pearson correlation table to see how well your data relates to each other. This will tell you exactly how the metrics you are tracking (time spent on your website, for instance) correlates to your Core Business Goals. Now you’re able to take action by focusing more on the metrics performing well or by trying to improve the metrics you think should be performing better.
For instance, you might discover there’s a high correlation between Instagram Likes and online sales, but Facebook activity does not appear to correlate to sales. You might use this information to decide to focus your marketing efforts more heavily on Instagram, or you might try to shake things up with your Facebook advertising to see if you can improve in that area.
How is the data changing over time?
Like any good experiment, make your hypothesis and then track the results. Let a few weeks go by and see if anything has changed. Did you see an improvement in your Core Business Goals by focusing on the metrics that show the highest correlation? Did your extra care with your underperforming metrics increase its correlation to your goals?
As time goes by, your data will become more valuable. Your business will go through its normal sales cycle and you may see certain metrics becoming more valuable in different times of the year, geographic regions, or demographic areas. Using data to drive your decisions, you’ll be prepared to change and adapt right with it.
Ready to use data to make better decisions? Let’s talk.