The rise of the cloud has enabled businesses to do so much more in 2017, from managing your own accounts, to working remotely with a team across the globe. Lower costs, more flexibility, and better accessibility means smaller business can keep up with the corporate giants, if not get one step ahead!
Utilising cloud technology also comes with a lot more data and now it’s easier than ever to see data about your customers, your processes, and your team. In theory, every business using the cloud in some shape or form should be more efficient than previously.
However for all its benefits, the amount of data you now have access to is actually presenting a huge problem.
Firstly, the sheer number of different cloud apps that a business uses means that your data can be scattered across multiple platforms. The average business now uses between 11 and 16 apps to get stuff done.
Secondly, the amount of data is just too much for most businesses to deal with. It’s easy to find yourself so overwhelmed with the sheer volume of information, that instead of enabling us to make data-driven decisions, we’re end up stuck in ‘analysis paralysis’.
If you’d like your business to make data-driven decisions and stop your business drowning in data, start by following the three steps I’ve set out below.
1. Create defined goals
One of the biggest reasons small businesses struggle to turn data into insights and then action is because they don’t have a defined goal.
Having a set of measureable business goals before thinking about the data or tool is the only way to know whether your planned activity is success or failure.
How to define your business goal
If I asked you what is your businesses main aim for 2017 is, what would your answer be?
For many of you, it might be to increase profit or revenue. It’s a common goal and not entirely a bad one. But it isn’t detailed and doesn’t outline what success looks like.
Start with your overriding business goal and identify what will help you to achieve it. This doesn’t need to be a drawn out process. In fact, you can define and create your plan of action in under a day.
Here’s an example of a clearly defined goal:
"I would like to increase my monthly revenue from website sales from £1000/m to £4000 in 6 months, with a monthly growth rate of 32%."
The monthly growth rate section is optional, but I like to use it as it breaks down your overall goal into achievable monthly targets. It's a tip I learned from entrepreneur Noah Kagan.
From this goal, we can clearly see how we expect to increase our revenue by focusing on sales from the website.
Creating goals in this manner will give you greater focus, and prevent you from chasing tasks and strategies that have no real benefit to your business.
2. Identify the right KPIs and stick to them
Now that you’ve got a clearly defined goal you’ll find it easier to identify the key performance indicators (KPIs) that will help you measure it.
Google Analytics for example will provide you with access to hundreds of metrics, but not all of these will tell you how you your business is doing. Choosing a select few metrics as KPIs will help see how you’re performing.
Generally, it’s recommended to have no more than 10 KPIs for your business. More than 10 and you’re only adding to that overwhelming feeling often created by data.
Of course, you should be able to easily identify the first KPI - it’ll be right there in your goal. If your goal is ‘improve my Cost Per Acquisition’, your first KPI will Cost Per Acquisition.
All your KPIs should affect your primary goal. If it doesn’t show how your business is performing against that goal, get rid of it.
Here's the goal we created:
"I would like to increase my monthly revenue from online sales from £1000/m to £4000 in 6 months, with a monthly growth rate of 32%."
And here's the KPIs I'd track
- Monthly Revenue
- Monthly Revenue Growth
- Website Conversion Rate
- No. of Transactions
- Average Order Value
That’s it. By using these 5 KPIs I 'll know if I'm achieving my goal and be able to determine any actions I need to take.
If I want to dig deeper, I can segment these metrics. I could look at channels with low conversion rates, or the rate of new vs returning customers for each. But ultimately for a summary of how I’m doing, I only need these 5.
You can see already how the amount of data you’re now dealing with has reduced massively. You can see clearly what you need to achieve and how you need to it with a few simple statements and KPIs.
3. Automate as much as you can
For your business to truly benefit from data, it’s essential to make data driven decision making a part of the every day in your business. Creating reports at the end of the month for a cursory glance from management will mean your company ends up being reactive rather than proactive.
That’s why we’ve already defined our goal and narrowed down our KPIs. To check each of those metrics should take no more than 30 minutes. But it’s possible to make this even quicker with a bit of automation.
We could use Google Sheets and the Google Analytics add-on to pull our KPIs through into one spreadsheet. It’s regularly updated and hides all the distracting metrics that you’d come across by logging into Google Analytics itself.
If that doesn’t work for you, there are many tools out there that will do it for you from dashboards that display on your TV, to reporting tools that allow you to manage multiple companies.
Cloud technology has allowed businesses to run more efficiently and smarter than ever before, but the deluge of data that comes with it can quickly overwhelm teams to the point where they can’t move past it.
But you can take control of the data you have. You can use it to the betterment of your business, with just three simple steps:
- Create clearly defined goals
- Only tracking KPIs that relate to your goals
- Automate as much of the tracking as you can
You can also encourage your team to increase their understanding of the information you’re collecting. This will not only help them become more data-literate, but also reduce the amount of time spent trawling through unnecessary metrics.
Don’t let your data send you into a state of analysis paralysis, use it to start tracking and growing effectively.
About the author
Sarah Hewitson is the Community and Marketing Manager for Neatly.io. She loves finding ways to make data more accessible and easy to access for businesses. When she’s not doing that, you can find her planning what’s next for her ever-changing hair color.