Crunching numbers can seem like a chore. Sitting down to pore over thousands of data points and condensing information into a report that is not only readable but provides valuable insights can be a daunting task.
However, you must remember that data is extremely valuable. So valuable in fact that it is often the competitive edge you need to beat out your competition.
That’s why I ask if you have looked at your data lately. If you haven’t and want to start, here are a few suggestions that I hope will make your data-dive a fruitful endeavour.
What are your KPIs?
Before you begin collecting any data, you need to determine what your key performance indicators (KPIs) are. You can’t determine success if you don’t know what it looks like.
I caution against only using your total monthly sales, or your election win as your only measurement of success. What if the result isn’t what you wanted?
When everything is going well it’s easy to fall back on that one data point and say that the foundations are secure. Don’t let disastrous results catch you by surprise. That’s when the scrambling really begins.
How do you determine your KPIs?
Choose KPIs that influence your end goals. A simple example: you want to boost sales by 10%. A strong KPI to determine if you are on track to completing this goal might be total number of leads. This will provide you with a conversion or closing ratio. To increase sales, you can either increase leads or increase conversions. With this in mind, you can work on improving both those KPIs to meet your goal.
Your KPIs need to be measurable. If you can’t compare data points then you don’t have data, you have anecdotal evidence. While valuable at times, relying solely on anecdotal evidence can be incredibly dangerous. People’s perceptions are as unique as snowflakes. You should assume no one is telling you the truth. Let the data be the objective voice that tells you the truth. Data has no ego, and neither should you.
Lagging and Leading KPIs
There are two types of KPIs: lagging and leading.
A lagging KPI is a measurement of how you did. They are usually quite easy to measure, examples include total sales or the number of identified supporters for your campaign.
Lagging KPIs can be hard to improve quickly as it takes time for changes to make their way through your business cycle. For example, you might want to increase sales but your average time from product discovery to customer purchase is eight months. You might not be able to determine if you were successful with your new campaign until this life cycle is completed.
A leading KPI is a measurement of how you are doing right now. Leading KPIs can be much harder to measure. You might not know what data you should be collecting until you start testing new ideas and they may be muddied by qualitative data. They are also extremely fluid and require a well-built data collection system to monitor effectively.
A leading KPI can be easy to improve or influence quickly as they are mechanisms that drive your lagging indicators. For example, you can drive more traffic to your website today if you buy digital ads.
Don’t be afraid to change your KPIs
KPIs can change as you learn. Collecting data is about breaking your own biases. If the data is telling you something that goes against your original ideas, you must be willing to adapt.
The KPIs are only as good as your data collection system
A strong data collection system should be efficient and easy to interpret.
Ensure your system is tracking the appropriate leading and lagging KPIs. To identify your KPIs, study all the ways a customer might interact with you and how you are going to influence them. These will become your KPIs. From there, create a data collection system that not only collects this information but reports it to you as well.
Incomplete data sets can waste months, if not years of your time. Incorrectly interpreting data can also lead you to the wrong conclusions. Take time to develop your data collection system and improve it over time.
Data can only tell you what you ask from it. Make sure you are asking the right questions.
The best time to look at your data is now. The longer you collect data, the more valuable it becomes. Who knows what secret it might unlock for you in a year!