The business world is tough right now. Most businesses are negatively impacted by COVID-19 in one way, shape or form. But data can help. Data can help you to make smarter, quicker decisions when it comes to cutting costs. Data can ensure that you save money, in the right places, at the right time, in the right way. Data is your money-saving friend.
Do you need to know how you can cut costs in a positive way that doesn’t restrict your business?
- Do you know where you are wasting money?
- Do you know where you’re duplicating spend?
- Do you know if you’re spending more on data that you are deriving value from it?
If you did know the answers to these questions, cost cutting would be easy, wouldn’t it? It would be obvious. You wouldn’t hesitate – you’d cut cost, save money and focus on your business surviving and thriving despite the crazy world we’re in right now.
Data is the answer – use data to power your cost reduction strategy
Now’s the time to stop making assumptions, using gut decisions or following whoever shouts the loudest. Now’s the time to use data to inform your cost reduction strategy, so you can make quicker, smarter and more confident decisions. We recommend you approach your data challenge like this…
- Get all your financial data into one place – even if it’s in Excel, even it’s a manual process, even if you only get 80% of the data to start with, just get started. Don’t let perfection get in the way of the good. Start simple and evolve as you go.
- Slice and dice data by region, product, sector or department – even if you’re making assumptions, even if you’re missing some data, see what you can do in a day and we guarantee you’ll derive valuable insight quickly.
- Understand the impact of COVID on spending – review data before COVID-19 started (remember those days?) and start your data review in January 2020 or earlier. Look at the impact on your business performance and see what’s changed and what hasn’t.
- Identify opportunities for process automation – see if you can spot cost areas that are high because you have manual processes, lots of people involved and a heavy personnel cost. Think about whether any of this work can be automated or outsourced to save money.
- Understand the impact of cost reductions on future performance – don’t cut costs without understanding how the cost cuts could impact revenue, and, therefore, profit. It might be better to double down on spending if it brings you in a lot more revenue… Cost cutting might be counterproductive.
- Report to your leadership team – use your data analysis to share, communicate, explore and engage your business stakeholders. Ask for input, feedback, ideas and recommendations. Turn assumptions into numbers. Turns guesses into facts.
Data is the answer – use data to improve your business performance
Using data, businesses are making & saving money right now – even SMEs are saving thousands, tens of thousands or hundreds of thousands of pounds per year. They are doing this by:
- Removing unnecessary spend
- Improving financial transparency within their business
- Leading their business strategy with data
Yet most businesses are not using data today. We ran a recent poll with attendees at our Virtual Breakfast – COVID-19 is the problem…data is the answer. We asked attendees – “How are you using data to inform your business recovery plans now?”
Most businesses, more than 75% of them, are not using data to inform their business plans, sales & marketing activity or customer targeting. 85% of businesses are not communicating business KPIs to their staff or using data for forecasting purposes. More than 90% are not using data to cut costs. And 5% of businesses are not using data at all!
Thus, by embracing data in your business, you have the opportunity to create a competitive advantage in your markets, to ensure you’re better prepared for business recovery that any of your counterparts and to get ahead of the game.
Here are 3 quick and easy tips to get you started…
Whilst we all see articles on data monetisation, very few businesses are actually monetising their data. So most businesses are spending more on data storage, processing or analysis than they are deriving monetary value from it.
- Streamline your data architecture: Are you maximising all the tools you’re using? Is there duplication?
- Reduce your data storage or processing costs: Is there a cheaper alternative? Is there a newer and better solution available now?
- Take advantage of free tools: Are there open source opportunities you could be taking advantage of?
- Make your data work harder for you: Are you getting your bang for your buck?
It’s tempting to just cut all discretionary spend, isn’t it? Marketing, contractors, agencies… But what if, by cutting these areas, you’re actually significantly reducing leads, sales, revenue and profit for your business? That’s counterproductive, so, instead, use data to:
- Track what’s working and not working in your business: Where’s your highest spend? What does it deliver for you in terms of profit?
- Understand the potential impact of cost reductions on your business performance: If you switched off ABC, what would happen to leads, sales, revenue and profit?
- Run scenarios based on different future events: What if you doubled down on costs instead? Would you gain more in profit that you’d benefit from reduced cost?
- Cut cost in the right place at the right time: Is there a timing impact that means some costs need to be in place for a certain time period?
We get it. You want to drive leads and sales volumes up, so you issue communications, campaigns, special offers and more across all your sales and marketing channels to ensure you’ve covered everything. But sales and marketing are expensive. Instead, analyse your sales and marketing channels and use data to ensure you focus on the areas where you can make a difference and see an ROI.
- Review your sales and marketing conversion rates: What’s working and not working for your business?
- Identify problem areas: Where are conversion rates low? What areas have seen a sudden drop?
- Implement and test solutions: What would happen if we did XYZ…? What would happen to conversion rates?
- Track changes over time and adapt quickly: test, learn, iterate, test, learn, iterate.
DO NOT WAIT – Ignore data at your peril. Use data to save money today.