Why you must Dashboard your data to Grow & Scale a Business
In 2010 I founded and started a software business. Based in an area of expertise of mine, I created a piece of software to visualise charts and graphs so developers could include high performance, real-time charts in their mobile, windows and web applications.
I’ve learned many lessons along the way about avoiding the pitfalls that cause many startups to fail, but one of the biggest lessons I’ve learned is this:
It’s easy to start a business, almost anyone can do this. Growing or Scaling a business is the hard part.
Why Scaling a Business is Hard
Imagine that you create a digital product, for simplicity sake let’s say you write an e-book or a course.
You take to the internet to sell your course. Initially, sales do really well, you make $5,000 in the first month, and with a little promotion, you end up with $10,000 then $20,000.
You start to pour money into ads but for some reason sales start to fall, before you know it you’re not making as much money and eventually, hardly any at all. You pull the ads and quit working on the course. Oh well …
What happened? Well you don’t know because you have no idea where your sales came from, what caused people to buy them, or even the reasons that stopped people from buying them. Usually the drop in sales or profitability is only noticed when its too late like at the end of the month, or at accounting or tax-return time. You need to know earlier, and have a clearer view into what’s happening in your business to make decisions faster to grow your sales.
Enter Sales Dashboards
What if you could know in real-time what the sales are of your product so you could identify issues? Imagine a graph of your digital product sales, perhaps it’s recurring revenue, or a 30-day moving average of sales/day. This would give you an instant view into how healthy your sales are.
With a sales dashboard like the one above, it’s easy to see here a growing trend in daily sales, then suddenly, sales dropped below the trend-line. You’d know within a short time that something was wrong. This allows you to ask yourself ‘What Changed’
What Changed?
- Did you just change your advertising strategy?
- Has a competitor released a similar product?
- Has your website dropped off the first page of google?
- Is something wrong in your sign-up page or download instructions?
- Is there a negative review or trending piece of FUD about your product?
This example above is a real-life case from my business, SciChart, and what changed was in 2013 I had changed the pricing model, increasing the price per unit by 15%. Big mistake. I was not quite established enough to do this and it caused a drop in sales volume. To get through it I had to discount and eventually sales recovered…
More Complex Dashboards
Most e-commerce providers will show you a dashboard of your sales as in dollar value, but it’s actually worth while to spend some time configuring or building a system to show more complex data if you’re serious about scaling a business.
Here’s one we made in-house below. We actually made this with our own product — SciChart — High Performance Realtime Graphs using Windows Presentation Foundation or WPF. You can see a case-study on our project to create it here.
Here we have a complex dashboard with many views to the data. We’ve graphed and made this available to all sales staff with the following metrics:
Sales (Revenue) Charts
- Sales broken down by product, or broken down by new vs. recurring revenue with trend lines and 1-year moving averages to see if we’re above or below trend.
- We’ve chosen average daily recurring revenue so we can see quickly if revenue rises or falls and ask ourselves ‘what changed’.
- We plot the raw data (spikes in the graph below) and the 30-day moving average of sales (mountain/area charts in the graph below) which is our daily recurring revenue. This lets us see days with large sales, days with no sales and a running total of recurring revenue.
- Trend-lines are added (Green) and 1-year average (Yellow).
- Sales often mean-revert so if we’re above trend we know we’re doing something right (and to do more of it!) and below trend, we know something’s wrong and to find out what and change it.
- We can also see if sales are in an uptrend or downtrend over multiple years or quarters.
Sales Funnel / Pipeline Charts
- We have graphs with trend-lines showing registrations on the website (number of new users signing up to our product or service).
- Trial users and licenses issued. We need to know the conversion rates at each stage of the funnel.
- From this we know immediately if there’s a problem with our advertising, the registration pages, if users find moving to trial confusing or if we’re failing to convert trials to paid customers.
Conversion Rates and Revenue Distributions
Other useful metrics are conversion rates and revenue distributions. We can see at a glance what the conversion rate is from website registration to trial, and trial to purchase, and purchase to becoming a long-term customer. Changes in conversion rates can lead into the ‘whats wrong’ and also ‘whats right’ narrative, which help us to shape and grow the business.
All this is created in-house with our own product — SciChart, in WPF. Dashboarding our sales data & pipeline data has been an invaluable tool to grow and scale our business.
Conclusion: Dashboarding and Data-Driven Business growth
Having a top-down view of the major metrics is invaluable in your business.
You can see immediately if something is going wrong, or something is going right. All sales staff have access to this data in our business and the level of agility it offers really can’t be replaced.
Shaping the data and allowing different views such as breakdown by product, recurring vs. new revenue, even location, company size and order size gives invaluable data for decision makers to help grow a business.
Follow me as I continue to document my journey about wealth creation, investment, software development and business growth. You can find me over on Twitter as DrAndrewBT.
