Maintaining growth is a perennial challenge for any business, but for early-stage firms it’s a matter of survival. Gone are the days of the C-suite fueling growth on intuition, experience and vision alone. As tools and technologies have advanced—and eWEEK charts this progress daily—fueling enterprise growth has become a science driven by the analysis of data.
The good news is that this is a science that can be learned and mastered, and not just by data scientists.
It’s important for any organization trying to maximize growth to find its strategic sweet spot—a set of optimal decisions and investments offering the highest expected return for a particular level of risk. This is what Shawn Cadeau, CEO of Vena Solutions, calls the “efficiency frontier.”
So how can astute executives determine their own “efficiency frontiers” to keep their organizations successful? In this eWEEK Data Point article, we offer five recommendations from Cadeau based on industry information compiled from his career driving growth for high-tech firms that include Adobe, FreshBooks and Vena.
Data Point 1: Get Your Data in Order
First things first: Results from any analysis will only be as good as your data. Take steps to ensure your data is clean, comprehensive and accurate. This may be easier said than done, but the alternative—using bad data—leads to bad decisions and must be avoided at all costs.
Consider, for example, your company’s data in Salesforce.com. It’s important to ensure that teams aren’t cutting corners on their Salesforce entries. Incentivize sales and other departments to enter every customer call and interaction and follow clear rules to maintain consistency. Cutting corners on areas like Salesforce administration, continuous improvement and analytics can mean everything from sales forecasting to customer success suffers from bad data.
Data Point 2: Identify and Track Your Growth Drivers
There are countless data points available in any business to help determine its growth drivers. They can be found anywhere along the buyer’s journey, across your organization or even across your industry; for example, attributing first and last touches as well as the influencing content in the prospective customer relationship. Setting up the reporting and automation to track the true effectiveness of activities that drive revenue is a critical step to getting the baseline understanding of what is contributing to your growth.
Use data points to understand what is and what isn’t really driving growth. Once you do, you’ll have a solid, holistic sense—backed up by data—of where to invest more money and where to pull back. Natural starting points include:
- channels and processes that most effectively drive leads (acquisition of leads);
- how to turn leads to wins with maximum efficiency (conversion);
- what drives customer success and creates advocates (advocacy); and
- how to increase Customer Lifetime Value (retention).
Data Point 3: Discover Ways to Find New Lead Sources, Expansions or Untapped Markets
Tracking growth drivers is critical to supporting the change so essential for business competitiveness. To stay ahead of the curve, businesses must not only continually adapt and evolve but must constantly be on the lookout for new lead sources, markets, opportunities to upsell and cross-sell, and more. Given how quickly markets and competition are always changing, constant testing is critical.
Finding untapped opportunities may involve seeking new channels (partners and distributors), testing marketing campaigns and other new sources for leads and listening for new product uses cases from customers. In any case, businesses and their teams should always be looking to experiment, test, learn and repeat.
Data Point 4: Act on Your Data and Make the Tough Decisions
With so many data points and perspectives available, it’s easy to feel overwhelmed. Combat this tendency by focusing on the right KPIs (key performance indicators), picking a finite number to analyze and act on and making sure that most, if not all, are within your control. But like the need to pick a finite number of KPIs, start acting on them with manageable-sized projects for maximum success and quick wins.
You may find your data is revealing something you don’t want to hear – for example, a customer that is costing you money and needs to be let go, or a product that has nostalgic value but no growth value and needs to be retired. Achieving success means making hard calls. Be sure to check your gut, but don’t be afraid to listen to – and act on – what your data is telling you.
Data Point 5: Let Finance Drive the Charge
CEOs are responsible for looking at the big picture, understanding high-level drivers, strengths and opportunities and having a vision for where the company will be in the near and long-term future. Thankfully they have the C-suite there to help.
When it comes to deep-dive analysis and data discovery, CFOs and their finance teams are invaluable. More than any other department, finance has the ability to tie every corporate activity and decision back to revenue and unit economics. When using the right software, finance also has access to company-wide data, helping to reveal deep business insights that would otherwise never see light.