Using data to hit the bullseye

By:  Martin Mellor – Your FD       @YourFDCandK                www.your-fd.com/mgm

Lies, damned lies and statistics. There is definitely a lot of truth in that statement, for a reasonable portion of my career, my job was to identify and analyse performance data in order to present my business and therefore my boss in the best light possible when he was presenting up the management chain but at the same time isolate underlying performance data to help him manage the business to deliver better results.

Recently I stumbled across some local market insights produced by Barclays Bank, the numbers geek in me found it fascinating. It also got me thinking about how now, in the digital age, information and data are more and more prevalent and more readily available than ever before, indeed apps like Feedly make a business out of sharing information – but how can you use them effectively? What should you know about your market and what data should you look for to help run your business and just as important what might be dangerous if misinterpreted?

So take the insight report I stumbled across, what does it show? Among the callouts are:

• Small business turnover up 2% locally year on year, 3% for Retail businesses
• Consumer spending up 7% locally, 4% for the wider region and local spending 2% higher than the national average
• Spending has dipped for the 30-39 age range but increased amongst all others, the highest increase in the 60+ range
• Spending has increased amongst all income brackets but the greatest increase in the ￡50k-￡100k range
• 30% of the local population is 60+
• 20% increase in turnover for professional & administrative services businesses, who make up 18% of the local market
• 20% drop in the number of business start-ups locally compared to 10% dip nationally
• 53% of start-ups still trading after 3 years locally, 59% nationally
• 32% of start-up owners are female

And what does this tell the analyst in me?

Well clearly depending on what your business does, the take-aways may be different, but for me as a professional services provider I can group the output into 2 broad areas:

1. the stuff that could be useful to clients
2. the stuff useful to me as a business owner in my own right

For my clients I am most interested in the age and income bracket profiling – how can I help them to understand and potentially refine their target market in order to access those with most disposable income or in a B2B world, clients that service those customers. When business planning the age demographics would help to assess viability of market penetration and I would also want to understand more about the age 30-39 bracket as whilst the dip in spending is disappointing it also identifies the highest potential opportunity for growth (by %).

For me as a business owner the drop in business start-ups means there are less potential new clients out there than there would have been a year ago but on the flip side there may be less competing businesses. The moderate growth in business turnover also tells me that budget for growth will be hard fought to access and so I need to be smart about how I present benefits cases to potential clients and finally the above average growth in my sector makes me positive about prospects but equally interested to dig deeper and understand what is driving the growth and how I can be part of it.

In both cases, the information is at a high level and therefore we shouldn’t place too much emphasis on its significance but it can certainly act as a prompt to find out more.

How much do you know about your market, need some insight? – contact Your FD for more information