A while ago, I came across this saying: “It’s okay to celebrate success, but it’s more important to pay attention to the lessons of failure.”
This made me reflect on failures that are recoverable and those that aren’t.
Taking it as a daily example, you might fail in a new recipe and learn from that mistake, or you might burn down the kitchen… Business is the same: there are scenarios that it’s better to avoid.
Here are four reasons to use data to avoid reaching extreme failure scenarios.
Reason 1: In a competitive industry, errors have an increasingly significant and expensive impact
When sales are good and indicators are green, controls become laxer. However, when the opposite is true, controls are suddenly tightened. This is when issues are revealed for which there is little capacity to correct.
We all fall into these situations, but that does not mean they cannot be avoided; even if indicators are green, periodic measurement is the thermometer to predict failure. You do not need to feel ill to go to the doctor; periodic checkups are always a good idea. The same applies to business.
But it is not enough to monitor your KPIs sporadically; this should be part of a routine. According to William James, a famous American philosopher, it takes the body 21 days to do adopt a new habit. How many days will it take you to develop the habit of measuring the key indicators for the dealership every day?
Reason 2: If you are generating data, why not use it?
In the daily operations of each department, multiple data is generated: small chunks of information that scale and become part of other data that are business outcomes. When a customer makes a purchase, they’re generating and updating a lot of data: vehicles owned, account status, purchases, contact details, purchase dates, etc.
The same happens when a vehicle comes into the workshop, when a sales lead is generated, when a new sale is made, and when a payment is processed.
If you have data to make more efficient marketing campaigns, to anticipate the next services for each customer, to call those customers who are buying less; if the data is used to see the performance of each store, the level of customer loyalty, your inventory status… why wouldn’t you be using it?
Time has always been a valuable asset, but data may be even more so.
Reason 3: Data are chronicles of situations that have not happened yet
It is obviously useful to capitalize on prior experiences to prevent negative situations from recurring. However, data within a daily routine can have a more interesting dimension: predicting situations.
Let us consider this case: every month, the unit sales target is achieved, and yet, the business is heading towards collapse.
Contextualized data show trends, which can have three states: an increase, decrease, or things remain the same.
In the case of sales, seeing contextualized information might reveale that, even though the sales target is being met, other indicators are either low (liquidity, solvency) or increasing (cost per sale).
Seeing this situation in time, before seeing the adverse effects, can help predict a situation: if we continue like this, we are heading towards bankruptcy.
Reason 4: Anyone can benefit from data
A concern that arises in every conversation about data analysis is the expertise required to use these tools. The reality is different: when information is clear, the complexity lies in deciding what decisions to make.
With tools like Autologia Analytics, information is straightforward and accurate, tabulated and presented for instant understanding. A manager starting to use these tools just needs to ask the right questions, because the answers are in the data.
Conclusion
In conclusion and revisiting the saying from the beginning of this article, every situation—whether a success or a failure—can be ‘predicted’, and to do this we need approach them with a more analytical and less emotional perspective.
By the way, the saying from the beginning is from Bill Gates.
