Act on Analytics Now! Grow your business in the next 20 days

Its been quite some time since I posted anything. As always I've been very busy with clients, which I am thankful for!

I wanted to share with you three very simple steps that you can use to grow your business profits by more than 10% starting right now and get results within 20 days ... There is no excuse to not implement advanced analytics (other than you don't know how to) because it works. It is smart business. I have been analyzing my clients businesses for close to 20 years and I have been able to deliver incredible returns when my clients have been willing to act.

Be willing to act and do something new... if you always do what you've always done you'll always get what you always got (I think I've said that before)

Your organization's willingness to do something literally right now is the most important step... It is possible in most industries to see the results of intelligent decision making and intelligent operations within 20 business days.

Step 1 ... Decide to improve your business within 20 days.

2. Analyze your business by segmenting it into a lower level of detail than you do today ... If one of your business segments at your lowest level of detail today has an annual performance metric of 10 it will always be true that at levels of detail lower than you measure some sub-segments will perform below 10 and some will perform above 10.

This is where advanced analytics comes in ... segment your business at a lower level of detail and find the under and over performing sub-segments. Look at how you spend operational dollars against the sub-segments. Do asset allocation!!! Spend more on the over-perfoming sub-segments and spend less on the under-performing segments. Re-Allocate your operational dollars without increasing overall spend. If you do this your segment performance will increase.  

Where you are currently over-allocating resources to an underperforming part of your business you are making bad decisions ...

Step 2 ... Look at your business in a lower level of detail and re-allocate your operational dollars to over-performing parts of your business and away from under-performing parts of your business.


3. Set a growth plan ... Build a resource re-allocation theory to achieve it... create a new operating plan which is the implementation of your theory... track the results of your new plan ... adjust your theory accordingly.

Choose your first cycle to be 20 business days long ... Several example theories could be ... the more direct marketing we do to our best customers and best prospects the more revenue we will generate ... or the more we increase our prices for products and services with low price elasticity and decrease our prices for related products with higher price elasticity the more revenue we will generate ... or the more fraud we detect and eliminate from claims that are more likely fraudulent the more profit we will generate .. or the better retail locations we open the more revenue we will generate ... or the better assortment of core products we stock the more revenue we will generate and the less overstock we will have ...

A theory identifies a sub-segment(s) and a re-allocation of resources and sets a quantitative target... The examples above were missing the quantitative elements. I'll repeat ... If we identify and investigate 100,000 claims that are suspected fraud (by using advanced analytics to identify) we will reduce the claims paid out against the 100,000 claims by 10%... If we identify our best customers using advanced analytics and we increase our marketing spend to promote offers to these customers by 500% (and accordingly reduce spend to our "not-best" customers) then we will increase best customer average transaction size by 10% and their transaction frequency by 10% resulting in the business growing by 20% ... etc. etc.

It is possible to identify 100,000 potentially fraudulent claims in 10 days ... it is possible to identify and understand your best customers  in 10 days ... it is possible to identify high and low price elastic products in 10 days ... etc. etc.

You can investigate 100 claims in the next 10 days ... send out emails to your best customers with attractive offers in the next 10 days ... it is possible to increase and decrease prices in the next 10 days ... notice I chose quick cycle time activities ... some activities like assortment plans or site location are longer cycle plans which take longer to execute and track although you can create the plan in 10 days ....


After 20 days maybe you reduced fraud by only 7% not 10% in the 100 claims you investigated ... great! ... adjust your operating plan to look at 10/7*100,000 claims instead if you want 10% reduction in fraud. After 10 days of price changes maybe revenue went up 3% instead of the 2% that you thought... great you don't have to make as many price changes to get your 2% growth. you get the idea. Adjust your plan.

Step 3 ... Set a target ... create a plan based on lower levels of  detail than you measure today in 10 days ... execute the new plan in the next 10 days... see what happened ... adjust your plan ... get your employees to do this all over your business again and again forever ....

Any naysayer is not thinking out of the box ... if you think you are leveraging advanced analytics today and your business is not dramatically improving then you're most likely not doing it or you are doing it wrong ...

COMPLETELY DO-ABLE IN ALL INDUSTRIES ... in the words of Nike ... "Just Do it"


I challenge you all ...

correct application of analytics = more understanding about your business = better business results

Let me know how it works out ..