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Why Monitoring Analytics Means More Money to Your Bottom Line

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TIPS & TRICKS

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MONITORING ANALYTICS

Why monitoring analytics means more money to your bottom line

At first blush, monitoring analytics seems like the kind of thing that a big business uses to maintain its growth. However, creative and informative analytical tools can deliver powerful insights to small businesses as well, and it is increasingly easy to afford and to use these tools. In this post, we will focus specifically on the value of monitoring the results from your analyses and putting those results to work.

Centralizing Monitoring

One of the most important steps to take early in the process is to ensure that all of your results and your data are easy to access and stored in a central area. It is always more useful to have data that synergizes with itself and/or other sources of data, and the same goes for monitoring.

In the long view, your analytics do not merely inform you of the performance of each link in your business model and process flow. The overall story, the big picture, is just as important as the results from each process. That is what permits you to derive insight that can make profit-generating changes to different parts of your business.

For example, you might be struggling to see why you are not getting as many conversions as you thought you would after a website redesign. The individual analytics seem fine: you are getting plenty of site visits from ads, search and email marketing. However, on closer inspection you might note that there is a gap: you are seeing plenty of mobile site visits, but your bounce rate for those mobile visitors increased significantly after the redesign. Then you take a look at some heatmaps and sales data and realize that not only has your bounce rate increased, but mobile users are making fewer purchases than desktop users, and mobile users have a harder time reaching your product pages. By evaluating your analytics, you’ve found that the redesign probably has one or more flaws that cause the site to function incorrectly for mobile users.

That kind of reasoning is a lot harder when your analytical tools are disorganized and spread across multiple platforms that don't talk to each other. It is far better to centralize your tools so that it is easier to see the big picture.

Centralizing your analytics also reduces the burden on your staff and your resources as a small business. Time and attention are at a premium when you need to devote everything to growth and maintaining sustainable levels of quality in customer experience. If everything is in one place, then there is much less need to invest time into finding out what the data is actually trying to say. Less analytics busywork means you can arrive at your insights faster and you don't need as much training to do it. That kind of efficiency is a huge boon because it lets you do more with less.

Adding Analytics To Your Workflow

Once your monitoring is centralized and accessible, the next step is to actually use it. Here, the key is integrating the results of the monitoring into different parts of your workflow. Each different area of your business can benefit from analytics in different ways, but only if it fits smoothly into the way you carry out tasks and processes.

Normally, we associate web analytics of customer behavior with marketing. Indeed, this is a powerful way to understand what makes some people buy and others move on. However, there is even more to be learned from these analytics if you broaden your thinking. Your marketing skills might teach you that you are failing to make a connection with certain demographics or groups, but the problem might not be something that marketing can solve directly. By analyzing who decides not to buy and exposing that information to, for example, the development team, you might realize that those people are failing to buy because the product is missing a key feature that they need. You can dive into this further with social media monitoring. You can see what the positives and negatives of your product are in the eyes of consumers. Then, the finance team can decide if it is feasible to try to add that in-demand feature and the development team can implement it. Next, the marketing staff will begin to advertise that feature among the demographic that wanted it.

In this example, data flowed in from a couple of different sources and informed the work of several different departments. If any one of them had failed to include analytical results in their workflow, they would not be aware of the problem and would not have been in a position to solve it. Good integration, however, made it all possible. Applying monitoring results to solutions and outcomes boils down to focusing on specific questions and actionable conclusions. In this case, the initial question was not something broad like "How can I increase sales?" but something specific: "Why are these customers not buying as much as I expect?" The answer to that question informed a new course of action for much of the company.

Think about monitoring analytics in the context of specific questions that have answers you can translate into specific actions for your team. That should tell you where this monitoring enters your workflow. It will be a little different for each company, but in general it pays to use analytics as a planning tool and as a corrective tool to make changes or updates to the process based on feedback from consumers. It's key to be open to all sources of information, because any one stream of data can affect the work of any particular part of the team.

Goal-Setting and ROI

When companies, including small businesses, first get started with analytics, it becomes tempting to use them to inform everything. The key to taking monitoring to the bottom line is to know how to set goals and stay focused on those goals.

The amount of data available to a small business can be striking, and it is easy to spend a lot of time examining it from every angle. Instead, think about learning how to set concrete goals that will lead to profitable improvements and a positive ROI.

First of all, your goals should be tied to specific performance indicators. These can come from any area of your analytics, but they have to make sense. For example, if you want to increase your brand awareness, then it is reasonable to focus on KPIs based on marketing metrics. If you want to stabilize your revenue generation, then finance and accounting might be the place to start. Perhaps your accounts receivable linger too long because customers are not paying you on time. In this case, you should set goals based on the goal of reducing how long it takes for a customer to pay an invoice. Of course, you may need to look beyond the finance department to meet this goal. For example, you might need to tap into automated marketing tools to send payment reminders via email. Regardless of the steps you implement, every action should contribute directly to the goal. Don't pick a vague goal that you can't measure: you should know exactly how to achieve it and it should be tied to your performance as indicated by your analytics.

Next, know when to stop. Keep monitoring so that you can check your progress towards the goal. It's a good idea to set deadlines that you think you can achieve to give some structure and focus to the venture. It's also a way to ensure that you aren't over-committing. It is very possible that you set a goal, but you keep delaying the deadline to see if you can make the target with just a few more weeks of effort. This is a great way to expend a lot of resources on something that might not be possible. A good rule to thumb is to only extend a deadline when you hit a target early and want to ramp up and shoot for a higher goal, not because you failed to reach it in time.

It’s incredibly important for every business to remain focused on overall profitability. Even revenue can be deceiving because anyone can spend a ton on marketing and make a lot of sales. In that scenario, however, your cost of customer acquisition will be sky-high and you'll be in the red due to high costs, but you sure will increase revenue. Make sure each and every goal has a clear linkage to profitability. Not just revenue or site visits or some other secondary measure: the goal should clearly connect to your bottom line profit.

It's an exciting time to be running a small business because so much is now available to you. If you take this advice to heart, you'll be able to create a central interface for your monitoring, use that to integrate it into your workflow, and guide everything with concrete and realistic goals that are profit-oriented.

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