The Top Data Points SMBs Should Focus On
SMB owners currently have access to massive amounts of data, which they can use to their advantage. More information about your customers and how they shop can be obtained from a variety of sources, including information from online storefronts, site analytics, sales data, customer surveys, email marketing reports, and other sources.
Not all of this information, on the other hand, will be useful or relevant to your company’s objectives. It’s easy to become overwhelmed by the sheer volume of information available and lose sight of the reason for which you were collecting and analyzing data in the first place.
These are some of the most important data points for small and medium-sized businesses (SMBs), as well as how to determine which data to track.
Collecting Data and Strategies for Data Analytics
A significant difference exists between companies when it comes to the “how” of data analytics. For some, a straightforward approach based on a few key performance indicators (KPIs) may be sufficient. In some cases, an intensive data collection and analysis strategy may be the best option.
If you’ve already invested in analytics technology, you’re not alone: according to a 2020 survey by OnePath, 67 percent of all small businesses spend more than $10,000 per year on analytics software and services. The use of these tools is becoming increasingly important for small businesses seeking to make the most of the information they collect.
Many small business tools and platforms automatically collect and analyze data as part of their functionality. For example, most eCommerce solutions include tools that allow you to collect and analyze information about how your customers are browsing your storefront and making purchases from you.
Many website analytics tools, such as Google Analytics, are free or have free versions, and they integrate with other web tools, such as Google’s ad platform, to provide comprehensive reporting.
Some small businesses also make use of big data analytics platforms, according to Forbes. These platforms bring together and analyze massive amounts of data to uncover subtle relationships and insights that would otherwise be missed. In many cases, big data analysis may be able to uncover new information that would otherwise be impossible to discover using traditional analytics methods alone.
Consider how a big data platform combined with annual sales data, customer preference information, and website analytics can assist you in developing a more effective sales forecasting model. This can assist you in better anticipating changing customer demand and avoiding over-or understocking your inventory.
The way you choose to visualize data can also have a significant impact on how easily you can uncover insights from your information. Sales mapping, for example, is used by some businesses to identify geographic patterns in sales data, as well as to optimize sales routes and territory management strategies.
In any case, there is some information that you’ll want to start with a few fundamentals to avoid confusion. These can assist you in identifying major issues that can then be followed up on with more targeted data collection and analytics strategies.
Key Data Points for Small Businesses
No matter what industry you work in, certain information will always be necessary. These key performance indicators are the most important for small businesses:
1) Sales Information Points
In addition to revenue, or the total value of all sales across your organization, these data points include information about how much cash your company has on hand and how you typically spend money.
Examples include tracking cash flow, which is the amount of money that enters and exits a business over a specified period; and tracking sales revenue. If major expenses are incurred before profits are available, even profitable businesses may be forced to close their doors due to a lack of sufficient cash flow.
2) Budget Information Points
Many businesses also keep track of their budget variance, which is the difference between what they expect to spend and what they spend. A large budget variance can indicate that there is potential for you to optimize your spending and save significant amounts of money by experimenting with different budgeting strategies, which can be beneficial.
The cost of acquiring new customers can be calculated to determine how much money is spent on this process. Customer onboarding programs, marketing, and other expenses are typically included in this cost.
3) Data Points in the Ecommerce Industry
Certain eCommerce and website metrics will also be important for online businesses, including but not limited to:
The number of visitors who complete a purchase is referred to as the conversion rate.
a measure of how much a customer spends, on average, throughout their relationship with a particular company
The average order value is the amount of money that customers spend on average at a time.
4) Data Collection Points on the Site
It’s also critical to keep track of information about your website, which serves as the hub of a company’s online marketing operations.
Many businesses, for example, track information such as revenue by traffic source or the average bounce rate of their pages — the frequency with which users navigate to a site page and then leave without clicking anything else.
5) Information about the customer
In addition to these metrics, you’ll want to gather some additional information about your customers and sales.
These aren’t always metrics; rather, they’re categories of data that can assist you in making more informed decisions about the direction of your company.
Even though the most important customer data points may differ from one company to another, the following are some of the most important, regardless of the industry in which you operate:
Small Businesses Should Focus on These Data Points First
Customer demographics: who they are, where they live, and which market segments they may fall into are all important information to understand.
Customer activity: which of your customers is actively shopping, and which of your customers has not purchased in a long period.
Customer pain points are the most pressing issues that customers are experiencing right now and for which there are no immediate solutions.
Customer sentiment refers to how customers are currently feeling about your products, your company, and the problems you’re attempting to solve for them.
Contact information is required to follow up with potential customers.
Exit surveys and customer experience (CX) data: When a customer cancels a subscription or stops shopping with your company, exit surveys, CX data, and customer service logs can all be used to determine why the customer stopped shopping with your company.
This customer information will provide you with a good sense of how your customers feel about you and your company, as well as where there may be room for improvement.
Small businesses should concentrate their efforts on the following data points first.
Businesses that want to get the most out of the data they collect will benefit from starting with a few key data points and expanding from there.
Certain key performance indicators (KPIs) are more important than others, and information such as revenue, budget variance, and customer lifetime value can provide valuable insight into how well your company is performing. Additional information about your customers — such as information about any pain points they may be experiencing — can help you round out these key performance indicators.
Businesses that want to take their operations even further may find strategies such as big data analytics to be beneficial.
Eleanor Hecks is the editor-in-chief of the design magazine Designerly. She previously worked as the creative director of a digital marketing agency before deciding to pursue her passion as a full-time freelance designer. Eleanor currently resides in Philadelphia with her husband and their dog, Bear.