Most people know how important data analytics is to business today. Those two words can give you the information and insight needed to make better informed business decisions but, if you’re honest, data analytics doesn’t excite you all that much and seems pretty complicated. You’re right! The data space can get very complex—clicks, visits, brand perception, shares...the list goes on—there’s so much that can be measured. The good news is that we can simplify all of this by honing in on a few meaningful metrics that matter to your business to start. I will help you discover what those metrics are, give you a broad understanding of data analytics, the different types of internal and external metrics, the benefits, and how you can use this gold mine of information to make business decisions that pack a punch.
What is data analytics?
Whether you are researching your target customer or reviewing your websites’ analytics dashboard, you are looking at data. Data is made up of facts and statistics. Analytics is the collection of all that data for review and analysis. Analyzing data is where insights and conclusions are drawn. You can think of data analytics as a behind-the-scenes view into who, what, when, where, why and how. It can help you to better understand how certain activities and areas may be interdependent on one another, how efficient your business operations are and how effective your planning, marketing, social media efforts, etc. are. It can also give you juicy insight into your target audience and expose new products and services your business could create. It can do a whole lot more but you get the idea.
Why is data analytics important?
Everyone, if given the choice, would probably choose to make a decision armed with information to help them make a better decision. I know I’m one of those people and am betting you are too. Running a business involves making thousands of decisions. There are certain decisions you just have to fly blind on but many require having as much of the pertinent facts and helpful insights as possible to point you in the right direction. You aren’t going to make great decisions about business branding and messaging if you don’t know who your competitors are and what their strengths and weaknesses are. You’re also probably not going to be able to decide how to position your new product or service unless you know what problems it solves. You can’t begin reaching your target customers if you don’t know who they are, where to find them and how they like to be connected with either. All of this can be discovered with data analytics and will better inform your business strategies, activities and decisions. Are you beginning to see where data analytics might help your business?
Where do I start?
The best way to get started is to dip your toe in the data pool and begin measuring whatever business activities you are already doing. You can start getting comfortable with data analytics by reviewing what’s already been tracked to date. If you have a WordPress or Squarespace website, start exploring the built-in metrics dashboard to get a monthly overview of your traffic, popular content and interactions. If you are posting on one of the many social networks out there, start posting through HootSuite to access analytics reports on interaction, followers, likes and shares. If you are using MailChimp to send emails to your customers, start reviewing the metrics dashboard for open and clickthrough rates. If you are doing Facebook advertising, start reviewing the analytics reports to see how efficient and effective your campaigns and spending have been. These are just a few examples of where you can start. Decide what is important for you to know right now or simply what interests you and begin exploring the results that already exist to see what story the numbers are telling you. You may not be able to read the story at first but the more you get comfortable, the easier it will get. Eventually, you can take data analytics into consideration before activities get started by creating a key metrics and measurement plan for every launch, program, campaign, service, product and business activity you do.
How do I know what to measure when?
Almost anything can be measured, whether directly or indirectly. Deciding what to track is really a matter of what’s important to your business, project, campaign and goals. Thinking through your task beforehand will help you figure out what to track. Let’s say you’re going to be doing some guest blogging next month and want to know whether it’s really helping your business because that’s a lot of time and effort you could put elsewhere in your business. Some ways you might directly track the effectiveness of guest blogging is the number of post comments, quality of the comments, post shares, social media interactions, follows and shares. Indirectly, because you guest blogged, you might see an increase in your website traffic during the week of your post or see an increase in conversations around your post topic online. You might also see, over a period of time, an increase in awareness of who you are or what your company does. You could also receive invites to guest blog on more sites or to speak at a conference. All of these activities could be tied back to the guest post you did if you track it from the start and monitor the results throughout. Here’s a sampling of other metrics you might track to see how efficient and effective your business activities are:
- Brand Awareness
- Brand Recognition
- Market Share
- Number of Complaints
- Customer Satisfaction
- Product Availability
- Total Number of Customers
- New Business Win Rate
- Customer Loyalty & Retention
- Quality Perception
Keeping a pulse on how things are going inside your business is as important as your efforts outside of your business. There are certain metrics that can be tracked and analyzed that will signal issues internally with employees that could, for example, be the cause of issues externally with customers. This can help you get ahead of problems, improve processes and increase employee engagement. Here are a few areas to start exploring:
- Mission, Vision, Values & Goals Awareness
- Commitment to Goals
- Resource Adequacy
- Staffing/Skill Levels
- Desire to Learn
- Willingness to Change
- Freedom to Fail
- Employee Satisfaction
What do you do with the information once you have it?
Everything you collect tells you a very specific story that you have to learn how to read. There are tons of metrics that you “should” be tracking and know the answers to but don’t get hung up on that. Stay focused on what matters or interests you the most right now. Think about what projects you are working on and how you can start incorporating data analytics into your activities and then, start measuring. See if there are any past metrics that you’ve been collecting to start practicing on. You can hire a specialist to help you interpret the results or interpret them yourself. If you are doing it yourself, you need to start looking for correlations and causations in your results. Ask yourself questions like, “What does this increase in X tell me? What was happening at the same time as this increase? Are there any specific activities that could be the direct cause? Any indirect causes? Any long-term effects from past activities that could’ve attributed to this increase?” You may discover that 75% of your site traffic comes from a specific social media platform, which means investing more of your marketing time there is a smart move or that all the focus you’ve been giving the other social media site isn’t delivering traffic so it’s probably good to cut that back to a minimum. You might also learn that a specific blog post from a year ago is still getting a ton of attention, so maybe you should go back through the post and update any outdated content and add a newsletter sign-up at the bottom. Use your conclusions and insights to inform your business activities and decisions.
Investing time and energy into tracking your business can be cumbersome until you get the hang of it but it can also pay off big time by saving you from some costly mistakes or pointing you in the direction of some big wins. The saying, “Ignorance is bliss” doesn’t work in business. You might be one of the lucky people who has the “It Factor” where everything you touch turns to gold and you don’t need to know why. For the rest of us, making sure we are informed on our industry, competitors, business and customers will help us perform better every time. Understanding why something happens and how you can influence it means more clients, sales, press and desirable talent.
Now it’s your turn! How does data analytics make you feel? What, if any, tracking do you do in your business now? How do you plan on using it in the future? Share your opinions and thoughts in the comments below!
Thanks for reading and be well!
Hi, I'm Tiffany! I'm a business coach and consultant who believes businesses with soul is the way to go. That's why I've made it my mission to help entrepreneurs live out their business purpose and grow their ideas into profits. Meet other like-minded entrepreneurs now in the Dreamer & Creator online community.