Data. Metrics. Even if you’re not an analyst or a statistician, these are overused buzzwords. But if you have a business (and especially if you are the business), you may as well get comfortable with them. As with any concept, there’s an opportunity for myth and misunderstanding, as evidenced particularly by item 5 in this article. Without further ado, here are five reasons metrics should matter to you.
The tiniest home-based business could generate thousands of data points, but you have to know which ones are important enough to monitor, and why!
You know the old saying that you can get something done well, or fast, or cheap, but not all three. Knowing what’s most important helps you understand your core values, so you know what metrics to pay attention to. That data is often tied to the stakeholders with the real ability to make or break your business. (Investors want it cheap, customers want it fast and cheap; employees have reason to value their jobs and your company – they want it done well.)
Metrics give you a more accurate understanding of a situation, with more specific meaning than abstract concepts like “good” or “bad.”
This is the idea behind test scores and percentile rankings, performance reviews, even your FICO or Klout scores. Actual numbers are much more clear, as long as they’re measuring the right things. For example, you’ve sold more widgets this quarter, but you also added salespeople, so are sales really up and if so, by how much?
Because of the increased clarity of good data, you have more accurate predictive ability. You are able to ask “what if?” because you’re not considering answers based on random chance – you’re better able to see the advantages or consequences of making a change.
In fact, some statistical analytics include this kind of statistical predictive ability. If you know that most of your clients are not morning people, then you’ll probably warn your receptionist to answer the phone with a more subdued tone in the morning and save the more cheery greeting for afternoon.
This means you can make smarter decisions about whether to take action or make a change, which one, when, who should be involved, and so on, and how that decision will impact others.
For an example of who is NOT using this to make smart decisions this way, check out a local provider – see the problem? People need urgent or emergency treatment because it’s a time issue, not because they want a comfortable to wait. The only difference between waiting at home and waiting at the facility is just geography, not better time.
Contrary to the tech industry’s idea of how Big Data works for business, it actually improves your critical thinking and logic for a more strategic approach.
Remember in 2012 when Target made the news by allegedly sending baby product coupons to a teenager? Her father stormed in, outraged, then later called back to say his daughter was, in fact, pregnant. Clever story – you can look it up if you don’t remember – it even made TV news, even though there’s a great deal of question as to whether it happened. The point is, the concept is based on predictive analytics. Many grocery chains do the same thing. Is it invasive? No more than the old days, when a smart retailer would keep a little index card file on his best customers. I prefer coupons for things I might actually buy than just more junk mail, so I don’t see this as an issue.
In the end, what matters is that you’re making informed decisions that help you do what you do, better.
Questions or concerns about inferential statistics? Let me know in the comments! Not a fan of the topic? I understand, but if this little post did anything to help remove some of the mystique of metrics, please let me know with a like!
See you next time!