If Small Business Data = Food, How Would You Prepare It?
When it Comes to Data, Are Our Eyes Bigger Than Our Stomach?
We are living in the all-you-can-eat buffet of data. While we are jumping from one warming tray of stats to another, we fill our plates with information and most of it is filler, indigestible, and unhealthy for your business to be gorging.
Knowledge is no longer as simple as writing down or reading something. Knowledge is the ability to take the information presented, decipher it, and apply it to a problem that currently exists.
When you are running a small eCommerce business you don’t have the capacity to be reviewing data all day. The business information you have must be relevant immediately. When you are hungry you eat. If you cook too much ahead of time, the food spoils — and so does data.
“More die in the United States of too much food than of too little.”
John Kenneth Galbraith — Economist
Beware of Stale Data — Rotate Stock
Storing data is like storing food. If you keep too much too long, it’ll go stale and contaminate the fresh. Open the fridge regularly and toss out what you don’t need and consolidate. In data terms, segmentations, time frame adjustments, and setting limitations are useful when you are accumulating large sets of data.
Let’s say you are measuring the average lifetime value of your customers. You collect all the data, measure it out, and see that your average customer lifetime value is $300.
You think that’s great, since your average transaction is $10.
According to the data, a customer will be around long enough to buy from your brand 30 more times. So you are left to believe that a customer is worth approximately $300 to acquire and retain.
However, if you break the data apart and take a closer look, you realized that within the cluster are a few outliers skewing up the result. While most individual purchases are $10, there are also three purchases that are $1,000.
Error? Bulk purchase? What’s the deal?
Discrepancies of this nature are common. To stay ahead of these deviations, you want to inspect the highest and lowest value within the data source.
Finding outliers isn’t exactly a bad thing; this can help you find new opportunities. What’s important is spotting bad data that can lead you to believe that what’s there is flawless.
How does bad data affect your small business? Well, it can consume your resources, reduce customer satisfaction, lead to poor plans and initiatives — thus resulting in unsubscriptions or negative publicity — and of course, cause misinformed decisions.
Strive to find causation and not merely correlations. Don’t just eat it, look at the nutrition chart and make sure it’s fresh.
“You learn to cook so that you don’t have to be a slave to recipes. You get what’s in season and you know what to do with it.”
Julia Child — Chef
Simplify the Data Menu
Data are the raw ingredients: text files. Consuming it raw takes much more effort than having it cooked.
That’s why we need data analysis, the cooks, analyzing the data and using it effectively. They peel the skin, marinate the meat, and cut the fat. They stir the software pots and create graphs and charts to serve.
The hungry mouths are the business problems, or more correctly, those who have to solve the business problems — sales teams, marketers, engineers, designers, and yourself — and everyone is on a diet. Only give them what they need, otherwise you might leave them sluggish with little energy to actually perform the task at hand.
There is nothing more satisfying than a home-cooked meal. Same goes with small business data. It can be processed, but it should also be personalized.
“If you can’t feed a hundred people, then feed just one.”
Mother Teresa — Religious sister
Using Data to Put Out Fire
When the smoke alarm goes off, what do you do? You check for a fire.
For small businesses, chargebacks are the fire. Left unaddressed, they can burn bad. It’s urgent. There is no time to collect data and address it at the end of the month. It doesn’t matter what you are doing, the alarm is beeping, you need to grab the extinguisher and deal with it now!
In business, the smoke is a suspicious charge. When you receive an order that just doesn’t look right — maybe it’s larger than usual, maybe the shipping and billing address aren’t matching, or maybe the payment details are questionable — you need to deal with it.
Don’t let the pertinent data sit on the back burner for too long, you need to use it. Gather the evidence and prevent the chargeback from happening. Put out the smoke before it becomes a fire. With every charge, you are collecting data. Use it.
“The kitchen oven is reliable, but it’s made us lazy.”
Jamie Oliver — Celebrity chef
You Can’t Un-Cook: Use Data To See Forward, Not Backward
Most of how businesses examine data is through a rear-view mirror, evaluating what customers had done previously.
One popular way of using data has been through marketing. After a customer has made a specific search — say “ice cream” for example — suddenly they are bombarded with advertisements from businesses selling ice cream. This type of data analysis is limiting, however effective it may be. There’s more to summer than eating ice creams, after all — well, sort of.
The data that influences business decisions shouldn’t merely be addressed as what had happen, but whether these trends will continue. It’s not always as obvious as the passing of the seasons. By using the data to see two steps ahead, the business, as a whole, can be guided more effectively toward positive results.
Use data to be predictive and link metrics to behavior.
“You can’t make a souffle rise twice.”
Alice Roosevelt Longworth — Writer
Now, I know not all small business managers can be data cooks. That is why you should check out our app — we are a lunchbox of payment data and customer intelligence wherever you go! See what Control packed for your company.