Metrics Matter: How to Harness the Power of Analytics and Data
The following is a guest blog by CEO of Device Renew, Michael Oberdick.
How should your time be spent as an owner or operator of a wireless business? Should most of your time be wrapped up in trying to nail down which areas of your business are profitable? What about overseeing day-to-day operations? With so many areas of business needing your attention, let’s spend some time covering an important area in which a direct measurable impact can be made.
The repair and wireless retail industries are data-driven. What does this mean? Well, if you’re following the data correctly and measuring results, 99.8% of your business can be predicted. Assuming you’d like to make decisions that warrant the right results, this number is huge.
One of the biggest mistakes that has been made in the past, and is maybe being made by retailers today, is not using data to drive business decisions; often times a “gut” feeling has been followed. While this can yield a positive result from time to time, this is not a best practice — data doesn’t lie. Following metrics, analytics, and historical data is the best and most efficient practice in business for predicting the future.
Don’t believe me? Let’s dive into some metrics that prove how powerful data-driven decisions can be.
In the repair business, we have to understand profit per hour. Using basic reporting from your point-of-sale software can tell you this metric: net profit divided by the number of hours you’re open. This is calculated when team members are clocking in and recording minutes or hours logged on each repair and sale.
Getting more in depth, this measurement should be broken down by each day. Doing so allows you to receive data from your software that distinguishes what an overhead cost per hour is. Rent, utilities, payroll, marketing, and other variables are important when dividing by how many hours are worked in a day. Now, with this metric understood, we can cross-compare data to calculate net profit hour by hour which can be found for per hour, per day, per week, or per year — whichever is most helpful to your business.
The above calculation is also useful when you want to differentiate locations or employees to see if there are areas of improvement per location or per staff member. All of this data will help you decide which areas of your business are actually profitable and worth investing more time and resources into.
Moving on, how else can your data be useful? Is your business looking to create a great culture that will train and retain talent? Interested in how well your staff are at closing a sale? Want to measure the effectiveness of a promotion at increasing in-store traffic? KPI’s are the answer.
With brick-and-mortar businesses, such as cell phone repair shops or wireless retail stores, measuring the appropriate KPI’s is extremely important. But it helps if you know what a KPI is. Otherwise known as a key performance indicator, a KPS is a measurable value that demonstrates how effectively a company is at achieving their key business objectives. Organizations who use KPI’s well are able to evaluate their successfulness of reaching targets. KPI’s are goals set by the business that are applicable to their industry so that they can measure, adapt, and change based on the metric’s outcome.
Creating a culture that focuses on growing your business and tracking KPI’s is critical to scaling any organization. In repair, measuring things like daily gross profit (GP), tickets opened, devices sold, and trade-ins and repairs completed are just some examples of important KPI’s.
Involve and share your KPI’s with all team members so they understand the importance and value of them. Customer service representatives, repair technicians, and your leadership staff will also play a crucial role in KPI’s. While they may not always know which KPI’s are attainable, setting clear expectations and goals for all team members is a must for any business owner or operator so that staff has a target to work for. Not only do goals help to grow a business, but they also allow a team to know what is expected, strive to reach those expectations, and have a real sense of accomplishment when a goal has been hit. Involving employees on every level ensures they feel valued; a feeling that will help push them to work to achieve the collective goal.
And the usefulness of data doesn’t stop there! You can use data to drive all kinds of decisions in your retail and repair shop. In this day and age, data-driven decisions really are a must. Understanding and forecasting metrics, capital, inventory needs, profitability, and so much more, is how you set yourself apart from others.
Stay ahead of the curve and drive your business with analytical, data-driven decisions. Let the data make the smart move for planning out the next week, month, and year. I’ve said it once, but it deserves to be said again — data doesn’t lie.
Data is bigger than one blog can cover. That’s why you’ll be able to learn more about the importance of data in a five-piece series; “The Most Important Metrics for Repair” where I’ll cover the importance of metrics and analytics for the success of a repair business. Stay tuned!
In the meantime, want to learn more about how to see success in repair? Download the iQmetrix whitepaper and see how you can maximize this booming industry.
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