Why do some well funded/big companies miss business targets? Companies tend to focus 80% of their analytics effort on analysing “Historic Indicators” versus identifying “Leading Indicators” to grow business. This is biggest mistake I see with respect to how some companies leverage analytics.
3 examples of how Analytics Numbers should be used:
1. Spot Contrarian Points
Usually, consumer businesses experience low sales in January after Christmas in December. But I experienced a scenario where January revenue was more than that in December. February sales were even better than January. This defied all historic trends. Analytics diligence gave us some surprising leading indicators that helped grow business.
2. Customer Buying Trend
To help increase sales, instead of focusing on just why last quarter revenue growth is below expectations, identify leading trends on what customers are likely to buy and how industry cyclicals may impact buying behaviour in future quarters.
3. Product Innovation
Extrapolate and derive key leading indicators that dictate how your product or service should evolve for sustenance and growth. Kodak missed the digital indicator, Blackberry misread smartphone/Android leading signs and Google missed the Social indicator.
Bottomline: 80% focus on leading analytical indicators and 20% on historic one…instead of the other way round…will substantially increase your chances of meeting business targets.