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In a recent interview, I have been asked how can small businesses get started and benefit being more analytical. Below is my answer, and I believe it applies to any business.
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Here are my tips:
- Rather than spending a lot of money in hiring a data scientist or purchasing expensive software, get help from an advisor, use open source tools, and get some people in your team (maybe a software engineer) trained to take over some of the more advanced analytical tasks. Some training from data camps or Coursera is cheap and does not eat too much time.
- Master Excel. It is amazing what you can do with this tool, when you discover all its capabilities..
- Think of all the data that you can collect. Use tools that will give you access to un-tapped, powerful data, without a steep learning curve, via a dashboard interface. For instance Google Analytics is free and can help you track conversions and find the most efficient channels to generate sales. Use similar tools to monitor social network activity and its performance broken down by category.
- Customer profiling (segmentation), analyzing churn and retention, revenue trending factoring in seasonality and finding sources of fluctuations, are critical to most businesses. Make sure you collect the right data, and have access to monthly summarized reports, as well as email alerts when numbers are unusual.
- Use a dashboard to monitor and summarize all critical metrics associated with your business. First step: identify these metrics. Second step: identify (or create) data sources, internal or external. Third step: use data storage, like a database; data could be stored on the cloud (AWS, etc.) Fourth step: customize your dashboard (Tableau, etc.) so that is is simple and efficient for the users who access it.
- Metrics and data change over time, making it sometimes difficult to compare numbers from two different time periods. Be aware of potential changes in the way data is collected, or statistics are computed.
- Get data from your competitors and your industry in general (trends), using market research services, or website collecting data about companies and industry markets.
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