In the previous several posts here , here and here we have discussed how looking at performance metrics helps understand how your business is performing. We also mentioned that you should be looking at the reports on a daily, weekly and monthly basis to stay on top of your business.
The reason you want to look at the metrics is simple – numbers don’t lie; people do. However, from our experience as past business owners we have noticed that numbers tell only part of the story when trying to assess business performance. The metrics tell you what is happening to the business. They don’t tell you why. You have to dig deeper to understand why the numbers are what they are. For example, let’s say you are looking at sales going down for the last several weeks. You want know why this is happening. Further investigation shows that the customer count has been declining in that same period. But this still doesn’t tell you why customers are not coming to your business leading to declining sales. It may be because they are not being served well; maybe there is another competitor in town and so on.
So how do you go about collecting the anecdotal stories to understand the reasons behind the numbers? There are several ways you can do this.
- Talk to each and every customer who walks in your door. Ask them brief, casual questions to understand how you are doing, how other businesses are doing, etc. (In the next post we will tell you what questions you can ask.)
- You can also launch a formal customer survey; although they take more time and effort. We showed what questions you should ask in the formal customer surveys earlier.
- Talk to your employees to find out what’s going on in the community. For small businesses, the employees are integral part of the community and the young ones, in particular, are in the know about the happenings in the area. They can be a good source of information about new competitors coming to town, customers complaining and so on.
- Talk to other business owners in the area to find out how their business is doing and if they are noticing any changes in the economy, community and customers.
Don’t get us wrong. Looking at reports and key performance metrics are still important. However, by hearing stories from your customers, employees and others helps you understand the reasons behind numbers; which is what you need to make improvements to your business.
