The business intelligence revolution that continues to take Fortune 500 companies by storm has changed the way big business views customers. Viewing their customers differently has helped them increase revenues dramatically. Many small to medium-sized businesses see business intelligence efforts as too costly.  However, these powerful tactics are within reach of every business, small or large. This article explains how any business can begin to use their customer data to achieve their goals.

What is Business intelligence?

Business intelligence is the process of discovering patterns in business data that support business action. You will find other, more wordy definitions, but the core purpose of business intelligence is to give you facts to base business decisions on.

Always have a Purpose

Intelligence gathering is not an exercise in statistical analysis; it is a tool to help make your business better.  The distinction is important. Large corporations employ teams of specialists to mine their data. Many experts are more interested in techniques and theory, than they are in running a business.  That is fine. Large businesses have large budgets and can benefit from having their experts explore the new frontiers of business intelligence. Your small business gets the greatest benefit from business intelligence by staying focused on your business goals.

The most important task is knowing what to measure. Determining the key metrics for your organisation is critical. Otherwise, all the data gathering, mining and analysis you do are worthless. Your key metrics are the numbers that you track regularly to keep improving your business. The specific metrics varies from business to business.  They could include financial numbers like revenue, costs, cash, and profit.  But they should include other numbers as well.

The specific metrics are often related to your business cycle, and where you are in it. If you are a property developer in the early stages of planning a new development, the metrics you focus on will be different from when your project is into the building phase.

Know Your Customer

The key to good analysis is connecting your customers’ preferences, behaviours and characteristics to your business decisions. To increase the benefits of your efforts you need to know your customers well. Every business has customer data available to use for decision making. Some of it is anonymous, but much of it is associated with specific customers. Customer loyalty programmes are an example of turning general customer data into specific customer data. Combined with the demographic information provided by customers, a business can make better decisions.

Data You Should Collect and Analyse

As stated above, you should collect information that is relevant to your business goals. There are a number of schools of thought about effective business improvement. Methodologies like Six Sigma, Kaizen, Total Quality Management and Statistical Process Control help you focus on improving your business. As a small or medium-sized business owner you do not need to use these tactics to see improvement. Your business can benefit from focusing on two of the core ideas of these strategies; customer satisfaction and cost control. In other words, consider metrics that relate to your customers and the costs of servicing your customers.

Be Selective

The truth is you should focus on all of your most significant customers.  One of the general rules is that you should focus on the 20% of your business or customers that produce 80% of your revenue. You need to identify your largest customers (from a sales point of view) and collect the data related to them.

In a similar fashion, when you look at your costs, try to focus on the processes that contribute the greatest amount of cost to servicing your customers.

Metrics to Avoid

While metrics can give you insights and facts to support your decisions, measuring some things may have a negative impact on your business. Avoid using metrics that:

  • Have inaccurate or incomplete data
  • Are complex and difficult to explain to other team members
  • Add complexity to your business processes
  • Add excessive overhead to your business processes
  • Encourage employees to work against the best interests of your business or customers

These types of metrics will provide no value to your business. Sometimes, they will have a negative impact on your decision making and your overall business performance.


Improving your business requires good information to support your decisions. Even if you are a small or medium-sized business, gathering and analysing key business data can help you succeed.