Business intelligence is the collection and analysis of data to support decisions at all levels of the organization. This can include information about the company internally, customer information, market information, sales velocity, competitive information and numerous other metrics. When used correctly this data can allow companies to reasonably predict the outcome and validate their decisions while still moving quickly and innovating.
Business Intelligence turns your data into actionable information allowing you to make decisions that increase the likelihood of successful new products, sales programs and marketing efforts. It’s particularly beneificial to Operations where it can help anticipate demand and bring down unnecessary costs. Here’s a survey involving 2,600 companies that shows where they have found Business Intelligence most helpful:
In order to have business intelligence one must first have knowledge and it must be accessible. This is not possible without investing in the collection and making available metrics that can be used for internal analysis. Responsible parties and programs must be put in place to actively seek out the information and bring it into a central location to be available to everyone. This may involve the use of Business Intellignce (BI) software. This market has grown incredibly sophisticated with advanced features available on platforms that are simple enough for all the decision makers in the company to use.
Know your company:
The first step is that all decision makers should have access to internal metrics that help inform decisions. This includes cost model analysis, company P/L, historical forecasts and revenue trends. If you’re creating a new product historical data can provide a good measure as to what costs and revenue can be expected. This should include operational data, marketing information and sales revenue. Anything that can help illustrate what the impact of a new course or product may be. Knowing your company can also involve getting a wider view of opinions when charting a new course and how much support certain decision have. Most decisions are made at the very top with little input from those at the bottom but it’s those people who commonly have the closest relationship to the customer. They typically know best the problems, opportunities and solutions.
Know your customer:
There is little more important in business than knowing your customer. The first level of customer information comes from your internal sales data as this shows you which products are popular and where they are popular. The second level comes from those who are interacting directly with the customers which is usually the sales and customer service folks. They know best the needs of the customer and what matters to them. They also know the problems that the customer is facing and can usually identify changing trends. This can be backed up further with quantitative data from a CRM system in which customer issues and requests are organized so they can be useful in identifying problems and opportunities. Focus groups are also an important avenue to have an open conversation about new products, brand perception and advertising. They don’t have to be completely formal, just an opportunity to get a feel from real customers as to their perception.
Knowing your customer means also knowing how they really feel about the company. One way to gauge this is to use a Net Promoter Score survey. This helps to identify just how well you are doing and to focus on those who are your brand ambassadors. B2B companies adopting the Net Promoter Score have seen on average a 23% increase in revenue growth. You can also use this data to find those who are dissatisfied and address those problems. With just a 10% reduction of churn rate a business can realize significant growth. You can also use web data like Google Analytics to further understand your customers, where they come from, what pages they are visiting and the inter-relationship between other products. You can also draw out geographical, demographics and important search behavior which can help greatly in building a full profile. A customer journey map is also key to identifying the entire process a customer goes through and the thoughts during each step. How many exit in each part of the process and which steps produce the most pain and can be improved?
An engaged social media is an incredible tool to learn about customers needs and problems. Any social media manager should keep data on requests and problems or be involved in the decision making process. They are in a great deal the voice of the customer as they spend all day listening to the conversations. It also serves as a good place to see trends that are taking place. If your business involves working with dealers or distributors they can also provide a very unique vantage point as to the customers needs. They have the added advantage of knowing real trends among your competitors and within the larger market. It’s important to talk with them and survey them on a regular basis when trying to identify opportunities for new products or sales strategies.
Surveys are a mainstay for knowing your customer and should involve both qualitative and quantitative measurement. This will help you get a full view of the customer types and the percentages that make up your business. What exactly drew them to purchase your product over others? This is key in identifying your differentiation from others and where to focus more on. Is it unique features, a better price or higher quality? Surveys are an excellent way to quantify this over a large enough sample. SurveyGizmo and SurveyMonkey are both very popular and easy to use options.
Know your market:
There are always many more people in your market than your current customers. It’s just as important to know the potential of those who could be your current customer. These are commonly referred to as NCC (not current customers) but they could be. For many companies the potential market is huge and with smart business intelligence you can identify new opportunities for several types of innovation:
Application Innovation: This is when you find a new use for an existing product, tapping into a new base of customers and potential.
Product Innovation: Creates a difference with an existing product line and existing market, usually through features.
Enhancement: This is usually a small change to create a difference between other offerings. (For example, offering in a different color or size).
Line Extension: Takes an existing line and makes a change to set it apart and create differentiation. Line extensions is one of the most common types for companies in a mature market.
Knowing the market involves putting all the data together of your own sales, your customers, your competition and those people who aren’t currently your customers. When all these data sources are available to a group they’ll be able to form a big picture of the landscape and identify new opportunities.
Know your competition:
This is one that most companies typically spend a lot of time focusing on. Nothing will spur even a large bureaucratic organization into action quicker than feeling threatened by one of their competitors. While knowing your market will show you trends and opportunities first, keeping an eye on your competitors will allow you to react quickly and avoid them setting a positive differentiation against you. Your competitors may move to go after an existing market or may tap into a new enhancement, extension or application innovation that is lucrative enough for you to join in.
There are many tools for competitor research but here are some of our favorites. There is usually a wealth of trade magazines and if you work with dealers or distributors they are a fantastic resource for giving insight into what is doing well.
Having a large amount of metrics available isn’t very helpful if people don’t know how to understand them. Either group training or designated experts should be appointed to be the voice of particular data sets. Marketing & Sales may represent knowing your customer & competition while the companies operations or financial officer would be best to educate and explain cost analysis and forecasts. This data should not be put in a silo but rather shared freely so all can have the ability to access it. Use of a Business Intelligence (BI) platform can help bring all these metrics together for quick decision making. Many tools feature Predictive Analysis which allows you to see the future based on all your data and outside indicators. It combines: data mining, statistics, modeling, machine learning, and artificial intelligence to give you the clearest view of the future.
Intelligent Business Decisions
Having the data is not enough if no one uses it. The culture of making business decisions based on metrics must come from the very top. It should be reinforced at every proposal, every meeting and every decision. Every arguement should be followed by supporting facts that everyone has access to. Executives must drill-down into what each decision means for the company, the customer and the market to get a true picture as to what the likely outcome will be. By taking this bigger picture and backing it up with detailed data you can make faster decisions with a greater likelihood of success.