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Avoid Drowning in Information:
Ask the Right Questions

Information is available to us 24/7--too much information! In their 2011 book with the puzzling title, Drinking from the Fire Hose: Making Smarter Decisions without Drowning in Information, Christopher J Frank and Paul Magnone suggest that when you need to make business decisions, answer seven key questions to avoid drowning in the information pouring from "the fire hose."

"What is the essential business question?" When you have too much data, pose the essential business question for that situation and clarify what data you need. According to the authors, when the Eyjafjallajokul Volcano erupted in Iceland in 2010, experts unnecessarily urged grounding airplanes eight hundred miles away in the UK. The experts used "predictive data" without considering, "What concentration of ash will obstruct the view of pilots?" A transportation crisis ensued. Formulating and then asking the essential question will help you focus on the right data. This question should be prescriptive, not descriptive, and the response should be a "business action." This question helps you isolate what you need to know to act appropriately.

"Where is your customer's North Star?" Position new initiatives in terms of what they mean for your customer, not just your company's bottom line. How will decisions, such as dropping an old model, or changes, such as price increases, affect your customers? Look at facts, circumstances, and situations from the customer's point of view. What guides your customers?

Should you believe short-term data--"the squiggly line" on a graph? Just as a decline in earnings in one quarter doesn't necessarily mean you should sell stock, short-term sales results may not warrant a major change in your strategy. Take a long-term view. Are the changes in data real or "just noise"? Where can you find examples of meaningless short-term data? Baseball statistics, say the authors.

"What surprised you?" Look at the actual numbers, not the numbers you expected. Question what outliers mean. You are more likely to find opportunities in the irregularities in the data than in the numbers that "conform to expectations." In a study we completed for a networking company, about ten percent of the companies were not renewing contracts because they were migrating to another platform. These outliers were harbingers of an emerging trend. Our client also needed to migrate to the new platform.

What potential problems are apparent from the data? Lighthouses expose dangerous rocks. Ask key questions that will cast light on looming problems or threats to your business. Then, develop a response to the threats. Data out of context may not seem important. A small dip in sales may not seem meaningful, but is meaningful when compared with a significant increase in a competitor's sales.

"Who are your swing voters?" This term refers to "the silent majority," the customers who are somewhat satisfied but could easily become dissatisfied or vice versa. These customers in the middle represent the "biggest opportunity for low-cost growth" if properly segmented and approached with targeted messaging. Do not be overly attentive to those who will buy anyhow. Ignore those who will never buy. Focus on making members of the silent majority who are favorably disposed towards your company into loyal repeat customers.

The three W's: "What?" "So what?" "Now what?" Obtain data and then analyze the data to ascertain, "What does it all mean?" and "What actions should you take?"

  • "What?" encompasses asking the essential question, identifying the customer's North Star, and questioning the squiggly line.
  • "So what?" encompasses "What surprised you?" "What does the Lighthouse reveal?" and "Who are your swing voters." In other words, "What does the data mean?"
  • "Now what?" Having collected and analyzed data, what steps should you take?

Most of us "go looking for what we want to find, not what is really there," Frank and Magnone observe. The above seven questions will help you identify what you need to know (essential question) and also help you separate important from unimportant data. Most importantly, this approach will give you a customer perspective (customer's North Star) and expose hazards that are in your way. Finally, this process will help you decide what actions to take.

We provide customer intelligence for growing companies.

Copyright 2/13 Ruth Winett. All rights reserved.

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