Lesson 2
Why should every company become data driven?
And why you should apply it even to a hotel business
Recently I received the following email from my company’s founder:
“Hi Luca,
Please move every excel sheet we have to salesforce. We need to become an entirely data driven company.
…
”
Even if I heard the expression “Data driven company” many times before I realized that I had no idea of how to implement it in a start up.
After spending some more time in my current company, I think I understood what was a real data driven company. And I have to say it is way more than what companies use to think in general. In this article I will give some advice to apply that approach to your business. And in bonus I will apply this advice to a hotel business I am particularly attached to.
Being a Data-driven company is not only subscribing to Google Analytics
The first point of a data-driven company is that data has to be present everywhere in the start up. Everything that happens in your company should be measured. Being a data-driven company is not only about checking your website data on Google Analytics. It is way more than that.
As I said it in my previous article, I was surprised to see that everything was measured here. Data is present everywhere from the number of new pages on our website to the number of calls spent everyday by our sales team.
In the case of our sales team, data allows us to measure our everyday activity. To give more context we have different sales teams walking around European cities to look for merchants that would like to propose their service on our website. And we know almost everything this team is doing at all time.
If a sales representative is having difficulty to close contracts we can know very fast at which part of the process he is blocked. Maybe he is not calling enough people (we have the detail of calls per day), maybe he is calling but not getting enough meetings which means his pitch is not good (we have the number of meetings) or maybe he gets meeting but he is not signing any contracts.
As in regard to our clients, we also know exactly the number of client ranked by types and by neighborhood in every city we are in. Consequently we can define goals every week to find new potential partners.
And the same happens every time we launch a campaign for chasing new customers. If we create a Google Adwords, we know exactly the cost of one customer. In our case we saw that Adwords were as expensive to attract new customers, then offering promocode for free to our friends. You can guess what we chose.
After working here for some times it looks clear to me that we are able to identify problems very fast, and consequently take the right decision to solve them.
We are also able to replicate something when it works. We recently identify some clients that were driving more sales than others. Our goal right now is simply to find client that have the same potential in order to replicate it over and over.
The question “How many…” is asked everyday to everyone at the office. And if you answer a vague response like “a lot” or “many” be sure someone will answer you “Please talk to me in numbers”.
Being data-driven is using the right tools
Salesforce is definitely a great tool for measuring every action that concerns sales in the company. This company that defines itself as “the customer success platform” has become one of the biggest SAAS (Software as a service) companies in the world.
I discovered salesforce when I arrived in the start up and I am mainly in charge of configuring it for all the sales teams here. I was first surprised by the huge community using it. Salesforce is the ultimate tool for managing a sales team by saving there data. Every calls, meetings, customer complains, clients or contracts can be tracked easily and step by step on the tool.
And never forget the classical Excel file. For the anecdote we used for some time in early stage a lot of Excel files where we were just collecting our Key Performance Indicator. And even right now despite the use of salesforce some Excel files are still used for some purpose in the company.
Why my father’s company should become more data driven?
For more than 10 years my father has been running an hotel business. I spend all my holidays and week-ends working there and I have to say that he is doing a really great job. Indeed there is no way we could imagine 10 years ago the company would become what it is today. But still. I feel that being more data driven could help him expand his company.
We started debating about that topic recently because as of today data analysis is totally absent in the company. Even this morning he was telling me that March 2014 was an excellent month with a lot of selling. March 2015 is weaker right now. But he has no way to know what made 2014 a good year and for him it is impossible to replicate what worked last year…
The hotel is also present in different website to rent their rooms. (Booking.com, Inter-hotel, Expedia, Groupon…). But we have no idea of the cost/revenue of each of these channels. We have no precise data about how, from where and why our customers are coming. Maybe Booking.com and there high commission costs the hotel more than the revenue it brings. Again being more data-driven could help the hotel make the right decision for the future.
For ten years we have been collecting thousands of emails from people coming to our hotel but we are not using them right now. After talking to my father we decided to make a huge step forward in using data by starting implementing salesforce in the company. Maybe it is not at all the right tools for this but it worth testing it. This will help us collecting all the emails address we have and classing them by category. Thanks to this implementation we will access better data about the customers coming to the hotel and their origins. We are also looking for a tool that can help us download the reservations by country and by website to learn more about our customers every month and find the solutions to replicate what work.
The first day I arrived in my company I saw on the wall the following sentence: “In data we trust”. I did not really understand the meaning of it at this time but I think this article proves how important the start up culture is here!
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