Marketing is like the heart pumping new customers through the business. The lungs are the sales processes. You get the picture.
In a living being, the brain performs the essential function of monitoring and measuring all of the bodies vital signs and adjusting the activity of the heart, the lungs, the liver, kidneys, stomach, etc., to keep it healthy. In business, too, it is essential to continuously monitor the vital signs of the business to stay healthy. Failure to do so is one of the biggest reasons for businesses failing to thrive and ending up on life-support.
However, it’s safe to say that when I talk to many business owners about the importance of gathering and analysing the vital signs in their business, their eyes glaze over. Some even yawn. Others can get quite upset, saying they haven’t got time to record measurements about their business, or they resist making measurements in case it upsets their staff members.
It’s clear that the effort and risk seems to outweigh the perceived benefits.
And yet, simple measurements and analysis can have a quick and dramatic effect on the sales and profitability of a business as well as improving staff morale and productivity. Let me give you an example.
I’ve been working with a business this month looking at improving their profitability. Among other things we’ve been looking at their product range and how profitable they are. Fortunately, this is the kind of data most businesses can generate even if they aren’t deliberately collecting and analysing it right now.
What we discovered will have a dramatic and immediate impact on their business. For example, we discovered that two of their products create far more profit for the business than the others. While two other products provide much less profit than the others.
As soon as we saw this there was an wonderful, light-bulb moment when the business owners realised that their window display was show-casing their least profitable product line. That will be immediately put right, with the potential to make the business far more profitable without having to work any harder.
But the benefits don’t stop there. The business will be looking at its marketing and start promoting the more profitable products more heavily. As the marketing campaigns for their more profitable products kick in they’ll be able to phase out the less profitable product lines (or charge more for them).
With just a few hours of data analysis, this business is now looking at turning their business from making a small loss last year, heading for life-support, to making a healthy profit this year.
Would taking an objective look at your vital signs benefit your business? It really can be a very profitable use of your time!
The only thing stopping you now might be knowing where to start. If you’re convinced you need to take an objective, data-driven look at your business, but don’t know where to start, drop me a line and I’ll be happy to point you in the right direction.