Right now, small and medium business owners have access to massive amounts of data. Information from online storefronts, site analytics, sales data, customer surveys, email marketing reports and more can all provide you with more information about your customers and how they shop.
Not all of this data is going to be valuable, however, or relevant to your business goals. It’s easy to get lost in the sheer amount of information available, and lose track of why you were analyzing data in the first place.
These are some of the most important data points for SMBs — and how to know which data to track.
Collecting Data and Strategies for Data Analytics
The “how” of data analytics varies significantly from company to company. For some, a simple approach that relies on a few KPIs may work. For others, a more intense data collection and analysis strategy may be best.
If you already invest in analytics tech, you’re not alone — 67% of all small businesses spend more than $10,000 every year on analytics, according to a 2020 survey from OnePath. These tools are increasingly essential for small businesses that want to get the most out of the data they collect.
Many small business tools and platforms also collect and analyze data by default. For example, most ecommerce solutions have tools that will allow you to gather and understand information about how your customers are browsing your storefront and spending money.
Many website analytics tools, like Google Analytics, are free or offer free versions, and integrate with other web tools — like Google’s ad platform.
Some small businesses also use big data analytics platforms. These platforms pull together and analyze massive amounts of data to uncover subtle relationships and insights. In many cases, big data analysis may be able to find new information that you couldn’t uncover with standard analytics methods alone.
For example, a big data platform combined with annual sales data, customer preference info and site analytics can help you build a more effective sales forecasting model. This can help you better predict changing customer demand, and avoid over- or understocking.
How you choose to visualize data can also have a major impact on how easily you can uncover insights in your data. For example, some businesses use sales mapping to identify geographic patterns in sales data, or to optimize sales routes and territory management.
In any case, however, there is some data that you’ll always want to start with a few basics. These can help you identify major problems that you can follow up on with more targeted data collection and analytics strategies.
Key Data Points for Small Businesses
Certain information will always be important, no matter which industry you’re in. These key metrics are the most essential for small businesses:
1) Sales Data Points
These data points include revenue, or the total value of all sales across your company, as well as information related to how much cash your business has on hand, and how you typically spend money.
For example, you may also track cash flow, or the amount of money moving in and out of a business over a certain timeframe. Even businesses with high profits may be sunk by poor cash flow if major expenses come before profits are available.
2) Budget Data Points
Many businesses also keep track of their budget variance — how much your actual spending differs from your budget. A large budget variance can tell you that there may be room for you to optimize spending and save significant amounts of money with different budgeting strategies.
Customer acquisition cost can tell you how much you spend to bring customers on board. This cost typically includes spending on marketing and customer on-boarding programs.
3) Ecommerce Data Points
For online businesses, certain ecommerce and website metrics will also be important:
- Conversion rate: the number of visitors who make a purchase.
- Customer lifetime value: how much a customer spends, on average, over the course of their time shopping with your business
- Average order value: how much customers spend at a time.
4) Site Data Points
It’s also important to track information related to your website, which is typically the center of a business’s online marketing operations.
Many businesses, for example, track information like revenue by traffic source, or the average bounce rate of their pages — how frequently users click through to a site page, then navigate away without clicking anything else.
5) Customer Data Points
In addition to these metrics, there’s also some additional customer and sales data you’ll want to collect.
These aren’t always metrics — instead, they’re often categories of data that can help you make more informed decisions about your business’s direction.
The most important customer data points may vary from business to business, but these are some of the most important, regardless of what industry you may be in:
- Customer demographics: who they are, where they live and which market segments they may fall under
- Customer activity: which of your customers are active, and which haven’t made a purchase in a significant amount of time.
- Customer pain points: the main problems customers have right now that don’t have solutions.
- Customer sentiment: how customers feel right now, about your products, your business and the pain points you’re trying to solve.
- Contact information: essential for following up with customers
- Exit surveys and customer experience (CX) data: when a customer ends a subscription or stops shopping with your business, exits surveys, CX data and customer service logs can help you figure out why
Tracking this customer information will give you a good sense of how your customers feel about your business, and where you may have room for improvement.
Small Businesses Should Focus on These Data Points First
For businesses wanting to get the most out of the data they collect, starting with a few key data points will be important.
Certain KPIs are more important than others, and information like revenue, budget variance and customer lifetime value can tell you a lot about how your business is performing. Additional data on your customers — including what pain points they may have — can help you round out these KPIs.
For businesses that want to go even further, strategies like big data analytics may be helpful.
Eleanor Hecks is editor-in-chief at Designerly Magazine. She was the creative director at a digital marketing agency before becoming a full-time freelance designer. Eleanor lives in Philly with her husband and pup, Bear.