As the old saying goes – with new levels come new devils. Just as you’re getting your head wrapped around running your new business, it starts growing!
Great, congratulations! You’re hiring employees and building teams and with that comes essential reporting to track your business’s development. Top line figures are easy to capture, but with this wave of new and different information there are many hazards to avoid, and strategies needed for you to gain the most insight.
Time Periods & Performance Metrics
Not all months are created equal. A known and irrefutable fact. However, you’ll often see monthly reports that say sales increased 2% or that the number of customers decreased 3%, without explanation. Dig a little deeper before jumping to conclusions and running the risk of making business decisions without an informed view.
Turn your attention to performance-related measures and ratios. Sales dropped over the month? Check your daily sale averages. Number of customers dropped? Check to see your appointment vacancies compared to last month.
In short, don’t simply look at what has occurred, but use relevant performance measures and ratios to confirm why or how this might have resulted. If you still find a variance in desired performance, then you are at least left with a more detailed insight into where your business needs to improve.
Standardise or Die
Yes, the standardisation of calculations is that extreme.
This issue can be straightforward to resolve. But as your business grows, things can become lost in translation easily, so it needs to be revisited often. With reporting streams and responsibilities being shared, place effort into not only agreeing on KPIs and business wide reports, but also ensure that involved parties understand why you are working towards those goals AND how they are calculated.
If you are looking at CAC (Customer Acquisition Cost), make sure you agree on the expenses included in the calculation.
When looking at sales for the month, decide if existing client upsell is included in the total.
If you are looking at client churn, clarify if this includes involuntary churn or not.
Simple decisions, clear lines of communication, and constant reflection will help to ensure the report you read is interpreted the same way throughout your business.
Not every business will be able to A|B test. Such testing lends itself to mature tracking and data environments, which not all industries or business models have access to. However, those that do utilise this capability need to be wary of reading too deeply into their results and drawing conclusions to fit their hypothesis rather than challenge it.
Say you have a website to convert customers, and you test a landing page variation. You split traffic evenly and track how many customers add an item to cart or leave their details for your sales team. After a few weeks, you check the results to find that your new page variation outperformed your original page. Eureka, your business has improved, sales will go through the roof, and you’ll guarantee retirement by 45.
All this test proved is that you had more people adding an item to cart or leaving you their contact details. Did those carts lead to purchases? Were those carts above your average cart size? What was the average mark-up on items in those carts? Did the contact details you captured result in a meeting? Did any result in a sale?
These are tough questions to answer, and not always necessary to conclude testing. Although if you aren’t reporting the full journey of your user, make sure you don’t overreach with your interpretations. Every unanswered question leaves an assumption, and you should make note of this when reporting results or making strategic decisions. For assistance in comparing your test results, use this A|B test calculator to ensure you are following best practice.
As your business grows you will encounter these and many more issues for the first time, which can be challenging to tackle along with the day-to-day running of your business. Whether it is validating the information you are seeing or ensuring your performance measures are accurately calculated, it takes time, experience, and investment to get right. Visory provides real-time customised reporting to suit your specific needs, and a complete back-office team to validate all your information, giving you the confidence to continue growing your business, your way