Get to Know Your Consumers and Position Your Business

The market is becoming increasingly competitive and dynamic. Businesses strive to be more relevant and profitable. Therefore, small and medium-sized businesses that wish to succeed must make evidence and data-based decisions.

Positioning a business or product in the market is not just a matter of having a good offering, but of thoroughly understanding consumer behavior and using that data to make better decisions.

Internal reports and Key Performance Indicators (KPIs) are essential tools that allow entrepreneurs to design effective strategies.

"The language of your business is numbers and data. Data provides information. Often, business owners act on intuition. Taking data and paying attention to it allows you to make more informed decisions," stated Nerma Albertorio Barnés, a business consultant.

The importance of internal reports

Internal reports are documents that compile and simplify key data about operations. They are tools that allow you to know how the business is functioning.

For example, a weekly sales report that shows which products are selling the most would allow you to adjust the marketing strategy, avoid overstock, and ensure that the best-selling items are available.

"Businesses that are not measured cannot grow. If you do not look at the internal information of your business, you cannot know where you stand," pointed out the expert.

KPIs as a roadmap

KPIs are quantifiable metrics about the progress a business is making towards its strategic goals. These parameters help you know if you are on the right track or if you need to make adjustments to achieve your goals.

As an example, if one of the business's objectives is to optimize operational efficiency, a measurable KPI could be the automation of repetitive tasks by a specific percentage, such as 50%.  Alternatively, if your vision as a business owner focuses on sales and growth, a relevant KPI would be increasing the customer base by 20% to expand market presence. These types of indicators provide a clear and specific direction according to the company's needs.

"If you are a business owner and do not have your indicators, you do not know where you are going; these are what give you direction," explained Albertorio Barnés.

Additionally, KPIs allow work teams to focus their efforts on what will truly benefit the business.

"If you do not know what you want, you cannot tell your team where they are headed. These performance indicators make life easier for everyone," she added.

"There are basic KPIs like, for example, your sales. It all depends on the nature of your business. You can measure how you want to increase sales—whether monthly, quarterly, or annually—but there must be a metric that allows you to analyze how those sales change and fluctuate every month. You can have a metric on how much exposure you want to have monthly. Or, for example, how many proposals you want to send or how many times you want to be seen on social media," she exemplified.

You can also analyze inventory turnover, the number of calls or information requests you receive about your product or service, people's response when you post about a particular topic, your employee retention level, or how long it takes for your customers to pay you.

Strategy based on information

Albertorio Barnés offered an excellent example of how data collected from customers helped transform a restaurant's operation.

During a consultancy, restaurant reservations were analyzed and revealed that, on average, bookings were for couples. This data led the business owners to rethink the table layout in the establishment to accommodate more people.

"Now, instead of 16 tables for four people, we have 32 tables for two. It is about developing a strategy based on the information you have in your business about how people behave there. If we do not pay attention to these details, we lose the opportunity to maximize our sales and be more efficient," she explained.

What data to collect and analyze?

Internal reports and KPIs are interconnected. For example, if a service business owner analyzes their internal reports and discovers that only 4 out of 10 proposals turn into sales, they can establish strategic KPIs to raise that rate to 6, thereby driving a 25% growth.

Although the data to be collected varies depending on the nature of the business, there are some that will help anticipate consumer needs, adjust operations, and meet those demands:

1. Customers: It is essential to know the characteristics of your buyers: age, gender, preferences, or purchasing behaviors (what items they buy and in what quantity). This will allow you, among other things, to create personalized marketing strategies.
2. Sales: Obtain information on transactions by product, service, or category. Analyzing these trends would help identify patterns or fluctuations.
3. Conversion rate: Identify what percentage of visitors make a purchase.
4. Inventory turnover: Analyze the speed at which products or services are sold.
5. Social media response: Identify what types of posts generate the most interactions to understand what motivates consumers. Additionally, you can evaluate the performance of your advertising campaigns or promotions.

Create a Data Culture

For the expert, who has over 20 years of experience, it is crucial that owners implement a data culture in their businesses.

"Large companies have a habit of making reports because they measure performance. That data culture is important for decisions. Then, in our businesses, we think that these things are not important, or we do not dedicate the time for them. Nonetheless, it is our responsibility to have that structure that allows us to measure our performance," highlighted Albertorio Barnés.

Knowing your consumer, having internal reports with clear data about your operation, and well-defined KPIs to meet your goals are vital needs for business owners not to operate blindly.

"Many times, the business owner has multiple roles; they do everything, but we have to understand that our role is to be strategic. For that, we need information. That infrastructure of how we are going to obtain the information we need is our responsibility to create. It can be a notebook, whatever you want, but there must be something that allows you to know where you are and where you are going," she argued.

 

 

This content was written and/or produced by the GFR Media BrandStudio team for Popular.

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