Kitchen & Bath Design News

FEB 2019

Kitchen & Bath Design News is the industry's leading business, design and product resource for the kitchen and bath trade.

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Page 25 of 103

ANALYTICS IS A term that has bounced around the business vernacular for years. We've been advised to mind the analytics of our websites, we read about analytics driving deci- sions in corporate America. Heck, our favorite baseball teams are now managed by analytics. And though you may not be sure what "analyt- ics" means, you have this queasy feeling that it is inharmonious with why you love the kitchen and bath industry. The very thought of focusing on data sends shivers down your spine. After all, you chose the kitchen business because you're creative, passionate and love to work with people. It's the artistry, the human contact and emotion that drive you. Now "analytics" are invading your world as your suppliers and competitors are imple- menting practices based solely (or soullessly) on cold, uncaring numbers and statistics. Data doesn't have the heart of a kitchen designer, yet data decision-making is assimilating everyone in its path and you imagine it may be a danger to your business. Well, you are right, it may be…unless you act first. In our industry, analytics is affording cer- tain companies an early advantage, so it's time for us to adapt and level the playing field so that our knowledge, creativity and passion can once again become our differentiators. Let's start right now with a short primer. ANALYZING ANALYTICS The dictionary defines analytics as "information resulting from the systematic analysis of data or statistics." But it is so much more than that. It is a system for collecting every piece of data possible that is relevant to your business. This data allows you to make better and more timely decisions. Will analytical decision-making dominate the kitchen and bath industry? Of course it will. It is the underlying philosophy driving busi- ness today. The value is in uncovering data that allows us to reduce cost by improving efficien- cies in our businesses. This improves results to clients and profitability to the company. Data allows smart business owners to quickly: • Identify an issue • Understand why it happened • Forecast what will happen in the future • Decide the best steps to take to realize desired results Pretty simple, right? It is, and we need to b e aware that, if we don't utilize analytics, we create vulnerability in our businesses and leave it open for others to expand into our space and weaponize analytics against us. IMPLEMENTING ANALYTICS What are the first steps to implementing analytics in your business? First, sit down and take a look at your organizational structure and the opportunity to build an analytical infra- structure. For smaller businesses, this is easy; the organizational structure may just be you or a few people wearing a lot of hats. For larger businesses, it gets to be more complicated as you identify the legacy parts of your business that are no longer valuable. Hard decisions need to be made as to how to reorganize your budget to find the dollars needed to support your changing structure. But, this is not unusual. Successful businesses adapt and evolve. Identify what capabilities you must have within your company to support your strategic plan and implement them. The goal is to identify results, discover what is caus- ing results and create a plan to maximize the results you desire. Here are three points to consider as you build an analytical infrastructure: • Should you hire someone to manage this? You may not be a numbers person; that's okay. Hire a specialist just like you would for accounting, or social media or other functions in your business where you may not be very strong, or do not have the time to manage. Hire for experience, too. An ex- perienced manager in analytics can help you implement more efficiently and effectively. • Identify the tools and applications you need to manage the data. There are lots of applications designed for this. Investigate, evaluate and find the right fit for you. • Establish dashboards that make it easy for you to consistently review and take action. Data can be complicated; dashboards must be simple. They need to provide you with the relevant information in a format that is easily understood and acted upon. Here are five excellent areas to start sys- tematically measuring in order to improve the efficiencies and effectiveness of your business. • Financial – You'll need metrics such as sales, cost of goods, expenses vs. budget and profit to measure to performance. • Employees – Employees must have mea- surable performance goals and must be measured on these. Don't forget about metrics concerning employee satisfaction, especially in a full employment environ- ment like today. • Customers – Many companies focus on customer satisfaction and success but over- look evaluating if they actually make money selling to that customer. Just because some- one buys a lot doesn't mean they're a good customer. Meeting margin goals is of the utmost importance to the success of your business. • Suppliers – Measure your suppliers, too, and only work with suppliers that are inter- ested in helping you meet your goals. Set metrics to evaluate them focusing on cost and reliability in delivery, completeness, service and product quality. Price doesn't matter if your supplier costs your company money in other ways. • Process – Measure and improve the effi- ciencies of your process constantly. Make it better every day. The business reality today is that there are firms just waiting to gobble up market share by identifying the ineffi- ciencies in your processes. GAINING THE ADVANTAGE Analytics is truly key to the future growth of your business. Build efficiencies today to over- whelm competitors that don't. Build efficiencies today to level the playing field with competitors that are leading and doing the same. And once you have done so, go one step beyond and deploy your unique knowledge, passion and creativity as the true differentiators that make your business best in class. ▪ " Build efficiencies today to overwhelm competitors that don't…and then go one step beyond and deploy your unique knowledge, passion and creativity to make your business best in class." Analytics and the Kitchen Dealer JOHN MORGAN 26 Kitchen & Bath Design News • February 2019 FUTURE FORWARD

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