Great Business Intelligence
  July 31, 2017

You know about our focus on the numbers, and we don’t apologise for that.
But let’s be clear, we need to be looking forward at the numbers in your business and looking at them in real time to understand what’s going on day-to-day.
Don’t get caught up in the past.

Sure, use your historical numbers to gain a picture of what got you to this point, but then move on.
As every financial planner would say – “past performance is no indicator of future results”.
So use your previous financial data to create a baseline to move forward, but then set targets which will challenge you and help you achieve your new profit goals.
What you really need to achieve this is Business Intelligence (BI).

Having great Business Intelligence (BI) will help your business be more successful.
Because every business is slightly different, it will be different things to different people.
But a couple of the key concepts to learn:

  1. Return on investment – as a business owner it’s very important that you allocate your resources wisely to get the best possible return on investment.
    A great example is advertising. To properly gauge your Return on Investment (ROI) you need to know where every lead comes from.
    Only then can you work out how much each lead cost you.
    When you understand the cost of a lead, it’s much easier to know how much money you need to allocate to your advertising budget.

    Tip – use the Cube Marketing ROI Tracker to gauge the ROI for each marketing campaign you execute. This way you can understand which marketing delivers the best value to your business.

  1. Keeping work in front of the team – if your business involves quoting a lot of project work, it’s very important to understand your win ratio.
    As in how many quotes you need to do to win one job. If you’re winning 1 job out of every 10 quotes, you’d need to do a lot of quoting to reach the number you need to keep the work up to your team.
    If your team needed 10 jobs per month, you’d need to be quoting 100 jobs at that rate! Ouch!

    However, when you measure your quoting win ratio, and fine tune the sales process and improve it over time, you can improve your results.
    You might find your winning 1 job out of every 2 you quote. Wow, suddenly you only need to quote 20 jobs per month instead of 100 to reach your goals.

    Think how much time you’d save.

    Tip – use the Cube Sales Pipeline to track your quoting and make sure you have enough work in front of your team.

    You should be working at least a quarter in advance to make up for the lag in can take to actually start a project.

    This is why you need to build Business Development Activities into the regular routine of running your business.

  1. If your business involves numerous customers and smaller jobs, there are a couple of key BI numbers for you.
    1. Average spend per client – if you’re running a maintenance trade business, consider ways you can increase your average spend per customer.
      Ideally, it’s an inexpensive thing for you to deliver, but the customer perceives it as having high value they’d be prepared to pay for.
      In a mechanical workshop, it could be a bottle of Injector Cleaner. Think about it in terms of McDonalds asking – “would you like fries with that?
      The upsell works, which is why BWS try to persuade you to spend another $10 if you’ve already spent over $30.
      How many of us have taken advantage of that offer? It works!
    2. Number of sales per client per year – if you have a business with multiple client touches over the year, what would it take to persuade your customer to make one more visit?
      It might take an SMS reminder or a special offer.
      It could be a loyalty program which gives them more value with more visits.
      Just think about your client base, and consider a way you could get another sale per year out of each of them.
      With honesty, and integrity, it’s all about adding value from the customer perspective.

These are examples of ways to grow your revenue without growing your customer base, which brings us to an interesting point.

Imagine in your business, if you never, ever lost a customer? Imagine your business now if you’d kept every customer you ever had?
Which is another great piece of BI. The measurement is called “Customer churn”. How many customers do you lose every year?
With the cost of acquiring new customers, it’s obviously more cost effective to keep the customers you have, and just keep on providing them with great value.
Remember, a satisfied customer is the best business strategy of all.