Harness the customer insights lurking in your store’s data
Analytics | Jun 16
Victoria Lefevers on February 8, 2016 • 6 minute read
Think about every date you’ve ever been on. (Scary, I know.) Can you pinpoint why each was successful or not? Can you describe what success actually looks like for those dates? Is success finding someone to marry? Or simply having a good time over a shared cheese plate? Do you have some sort of pro/con list or other benchmark that you use to measure every date, in order to detect negative patterns, explain anomalies, and explain why you spent two hours sitting across from someone who reminded you of a cross between your grandmother and your creepy uncle?
The truth is, you’ve probably never sat down and thought about your dating life in that detail. But there are probably some measurements you’ve put in place to figure out if it’s “right” or “wrong” – and it’s not just emotional. Does this person fit with your political leanings (and is that important to you)? Do you both feel the same way about Italian wine, or about kids? Are you on the same page financially? No matter what those metrics are, you have benchmarks in place for what successful dating looks like.
Okay, now sit down, grab a piece of paper, and think hard about this question and try to answer it: Do you know what it means for your company to be successful? Asked another way, do you know what measurements are necessary to define and act on problems?
If your paper remains blank, be glad this isn’t a pop quiz, but rest assured that you’re not alone. Most people can’t easily answer that question, including many CEOs and other members of the executive suite. After all, it’s really difficult to come to terms with what we don’t know – and even harder to admit that we’re not omniscient. As business leaders, there’s an unerring tendency to fake it ‘til we make it – particularly when we have an idea of what needs to happen but don’t necessarily have time to examine why we’ve made that conclusion. No matter if you’re bootstrapping a startup, building a new function into an existing organization, or trying to benchmark your work to make sure it’s value-added, knowing what success looks like is crucial to making it happen. It’s also crucial in knowing when you might be in trouble, or what problems need to be solved.
To that end, let’s look at top four questions you should be asking about your business on a regular basis, along with some metrics that can quickly give you some insight into where your problems – and successes are. So grab that piece of paper – and maybe a glass of wine, because sometimes honesty is easier with a little lubrication – and muse on the following.
For some, this is sheer market size. For others it’s based on the number of new or renewing customers. For fledgling companies sometimes it all comes down to bookings. For those dependent on content marketing, share of voice is what matters. Or are you reigned by your free cash flow?
No matter which of these your company uses – and I hope they use several of them – make sure your goals are smart – and yes, for those of you rolling your eyes, I do mean specific, measureable, attainable, realistic, and timely. You can’t just pull a bookings number out of thin air, or tell a finance guy “hey, add 50K to that number”. You can’t dive into content marketing and say “in 60 days, we’re going to drive 25K visits to our site and a 15% spike in direct website sales volume!” Be realistic, yet optimistic. Pick a set of metrics that works within your market and is understandable by your entire leadership team.
Take some tips from the Bachelor (or Bachelorette) and answer these questions in 30 seconds or less: Who are your main competitors? How do they compete against you? Why do you care about them? Are you losing a lot of sales or market share to them? Are they bidding on your keywords? Are analysts telling you that you need to care about certain companies?
Competitive strategy is tough, no matter if you are a fledgling start-up or an established incumbent in your market. By default and definition, ALL strategy is competitive strategy, so from the time you incorporate or get a patent, benchmark your competitors against the same metrics you’ve setup to measure your own success. That will provide you with clear definitions for how you pick your true competitors – and be prepared to revisit this often.
Do you want your company to eventually IPO? Or get acquired? What is the plan for both organic and inorganic growth? Are you looking to achieve a certain year over year growth, or stock price? What direction does the company want to move in? What markets do you want to conquer?
When planning your growth as a company you need to have clear guidelines about what you’re aiming for. In dating, maybe it’s marriage. Maybe it’s finding someone to go to Burning Man with. In both dating and business, this will change dramatically as you grow – and it may even change year to year. Any growth strategy needs to be flexible, but it also needs to be clearly defined so that you can easily see if you are meeting your goals or not.
Okay, let’s be brutally honest for this last tip. No one EVER really WANTS to hear negative feedback. No one wants to be told that they are that guy on the date who needed to brush his teeth more. Or that they were that girl who is a little too glued to her Instagram during dinner. In business, it’s no different; Sales doesn’t want to hear that they didn’t make their numbers, and Marketing doesn’t want to hear that they’ve spent too much money with little result.
The thing is, as much as people resist digging into these painful facts, asking why these things happened is incredibly important, because the answers can point at the qualitative problems that affect company performance. What do execs think the main problems within the company are? What does everyone else think the main problems are? What input do your individual contributors have about what THEY think affected a particular quarter? You have to look both top-down and bottom-up to get quality input about what may be affecting your measureable goals, but you have to do it and be willing to face some hard realities.
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