Business intelligence is about collecting and using data to make decisions. The type of data that you collect should be useful to your organization, even if it isn’t useful to anyone else. If you are a retail food company, it may be the data that you collect is the shelf space dedicated to your products and that dedicated to your competitors.
Continuing this example, imagine that you have half the space of your competitor. Let’s also say that you know you make $1 profit on each item you sell. (Knowing the profit in the product you sell isn’t easy.) Suppose you also have historical sales data that tells you a particular store sells 100 of your product each month, but that they run out. All these data are hard to get, but each piece of data gives you power when making a decision.
What would it take to double your sales? Twice the shelf space? More frequent restocking? Prominent placement? Experiment. Tell the store manager that you will split the profit 50/50 for every item he sells over the 100 you sell today. Now, you need to sell 300 units to double your profit, but the manager also makes $100. The manager will work hard to help you sell. You build brand awareness for a few hundred dollars over a few months.
Then, stop splitting the profits. What happens to sales? Hopefully customers really want what *you* are selling and now you make $300 profit on sales of 300 units. You built demand that brings people to the store.
If they don’t, experiment. It is your data, useful to you. Maybe get on the Internet. $10 for a website and PayPal make it easy to do business. Or maybe find another store for what you sell.
Data makes decisions. Everything else is a guess.
1 Comment
February 28, 2010 at 1:14 am
Very good, very good. Still thinking about it. Will have better response later.