As a business owner you are always looking for ways to grow your business and have it operating as efficiently as possible, but how do you get to that point? A great place to start is by looking more deeply at the numbers you might already be collecting and translating that information into actionable items for your business. Here are two simple sources of great data to learn more about your customers that you might already have at your fingertips.
Financial Data – You keep track of your books for your taxes and through your bookkeeper, but it can also tell you a lot about your customers. Strategically utilizing your financial data will allow your company to achieve sustained growth, keep your competitive advantage, and most importantly maintain profitability. When you have a good handle on your financial data, you can track metrics that are critical to the success of your company. You can spot trends in these numbers that will allow you to evaluate and fine tune your business model – or make adjustments to the parts of your business that are not operating efficiently.
More deeply understanding your financial data will give you data points that can be tied back to individual customers, and give you insights into your current customers. Here are a couple ways that you can use your financial data.
- Learn which customers have stopped spending: Through your customer management tool, you can compile a list of customers that have slowed or completely stopped their spending with a report on monthly spending by customer. You will also see what payments have been deposited, are currently overdue, and the amount of payments you are still excepting to receive to be able to determine if they stopped spending or if they just ‘owe’ you more.
- See which customers could spend more: On the flip side, you can also see where you can have revenue opportunities. Identify customers that might only utilize one of your services, but could be good candidates for other services. Compile this list and send these folks an email with a coupon so they can try out another offer at a discount.
Once you dig into the value of your current customers, you will have a better understanding of your cash flow.
Customer Data – Do you know how satisfied your customers are? By just asking your customer’s one simple question, you can start to understand them on a deeper level and get actionable information about how to improve your business or what you continue to do to serve your clients.
Use Net Promoter Score (NPS) to grade customer satisfaction: NPS is a customer loyalty metric based off the question “How likely are you to recommend my company to a friend?” on a 0 to 10 scale.
Once you collect the answers (via an online survey, over the phone, or in person), you separate them into 3 different categories:
1) Promoters (score 9-10): loyal customers who will likely keep using your service and will refer other.
2) Passives (score 7-8): satisfied customers, but not your most enthusiastic supporters
3) Detractors (score 0-6): unsatisfied customers that can damage your brand and kill growth.
Then calculate your NPS score by taking the percentage of customers who are promoters and subtract the percentage who are detractors.
Customer satisfaction should always be high on your priority list because the loss of even a few customers can affect your bottom line. By asking for comments after you get your NPS score, you can garner additional to-dos or better understand why your promoters stick with you and what your Detractors need to be more satisfied.
These ready-at-your-fingertips sources can help you prioritize your business and take better actions in the future to increase profit and revenue.
Learn more about key performance metrics that can make a difference and other financial tips, check out the Ultimate Guide to Small Business Financial Management.
Image Credit: customers data by cat1813