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Archive for the ‘Data-driven Marketing’ Category

The advantage of a dashboard is that it’s easy to use, provides timely data and, most importantly, gives an idea as to how to go about implementing potential improvements and solutions. It helps explain your marketing metrics visually, making it a lot easier for people to understand the information… without geeking out on them.

Marketing DashboardFor example, you can use a dashboard to compare marketing expenditures to revenue earned. Unlike reading bar graphs and spreadsheets, a dashboard makes it easy for you to quickly see where the marketing money is going, and, more specifically, which activities are leading to sales. Many people love this because it allows you to measure marketing ROI. Even better than that, is it allows you to make changes to your tactics and rapidly notice the impact.

Now that you realize how great it would be to have a dashboard, let’s talk about a few best practices for creating one.

1. Use Clear Labels
Depending on who’ll be looking at your reports, be sure they’ll know what each graph means. Consider, Jersey, Jamaica Red, Caucasin and Florida.  These words all come from the same category, but if you didn’t know I was listing breeds of cattle you might think I was having a problem with Geography.

2. Avoid Acronyms
While an acronym might be convenient and easy to read, it could lead to confusion, especially if your data is shared with people outside of your field. In a recent meeting I was in, people were throwing around the term, “QSR.” This could mean Quick Service Restaurants, Quasi-Stellar Radio or Quality System Regulation. I thought they meant Quality Satisfaction Rate. Imagine my confusion until I realized they were meaning Quick Service Restaurants. (Click here to see what else QSR means).

3. Use Legends or Keys
Don’t just make sure your reports show your information well, but that they define and describe it well, too. A legend will allow you to use colors and abbreviations to your advantage, while making sure your audience knows what they’re looking at.

4. Use Color Wisely
I’m colorblind, so the use of colors on graphs sometimes is a problem for me. When making graphs with colors use the options that have a marker with the display.  It also helps when you print the graph with a black and white printer.

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Butter ChurnThe cows are anxious! Its ‘Churning’ Day at the dairy farm. No, not the day they make butter but the day they calculate the churn rate for their customers.

Churn is the essential customer loyalty metric. In a nutshell, it’s the number of customers that don’t want to do business with you anymore. It’s calculated by taking the number of customers you have at the beginning of the year and using that number to divide into the number of those customers you have at the end of the year.

Formula for calculating churn rate

Churn Rate Formula

If you have heard the expression, “It is easier to keep a customer, than to get a new one,” you’ve already had your first lesson in churn. So, let’s continue with the example from above. If you began with 65 customers at the beginning of the year, and only retained 15 by the end of the year, your churn rate would be 23%. This means that 77% of your customers no longer use your products or services. Ouch.

If your current client base provides $1,000,000 in revenue annually, you’ll lose $230,000 from churn this year. By keeping one customer, your churn rate will go to 22%, and you’ll only lose $220,000. Which really means the new customer you just added will add to the $1 million – not just reduce the $230,000. Keeping customers means making more money for your business. And we all want that, don’t we?

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Baby chick and eggHow many chickens are hiding inside those eggs? Without tracking performance data, we’d have no way of knowing. Getting good information is about knowing what data to track. If you don’t have the right data, you won’t get the right information. Without that, are you well-equipped to make sound business decisions?

As with anything what you get out of something is only as good as what you put into it.  Data is the number one ingredient for information.  It’s the building blocks of good reporting.  For instance, if you only track weekly data, you won’t be able to have a daily report.  If you only track category-level data, you won’t get item-level reporting.

Before collecting your data, it’s critical that you ask yourself two questions:
1. What information do I really need?
(This is so you look at the right data)
2. What do I plan on doing with the info once I get it?
(This helps you take action, rather than collect information for no real purpose)

These and other considerations go into data management to provide reporting intelligence. To run your business most effectively, you should regularly review sales, departmental revenue, costs, operational efficiencies and more. You’d be amazed at how closely this information ties to sales and marketing.

For one of our food & beverage clients, Holy Cow did an analysis of their labor and cost of goods sold. They were able to make decisions about which high-margin items made the most sense to promote in their specials, as well as when to ramp up their staff. Fully trained staff at the onset of the busy season meant that customers were happier, ensuring repeat business, and operations went smoothly. But that’s not the big winner. The client increased their profitability by tens of thousands of dollars. Now that’s smart business!

Written By Reuben Gradsky, Data Specialist

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