312. Using Data to Make Smarter Decisions in Your Product-Based Business

If you’ve been following along with the podcast this year then you know we’re on part 3 of a 4-week series designed to help you set your intentions for the year ahead. 

In week one we focused on reflecting on our results from the previous year to get a sense of what did and didn’t work, what we do and don’t want to continue doing. We also set our profit goal for the year and based on our current profit margin we calculated our revenue goal.

In week 2 we covered my CASH Method framework for growing your eCommerce business and reflected back on our initial analysis with that new frame of reference in mind. Then, I asked you to gather some KPIs in anticipation of this week’s episode.

If you haven’t listened to those episodes and/or completed those exercises yet, pause this episode and do those first. Each week builds on the last and you’ll get the best value by listening to them in order. 

For today’s episode, we’re going to talk about leveraging your data for focus and growth. 

Breaking Down Your Revenue Goals in Your Product-Based Business

When it comes to your revenue goal for the year, the first thing you’ll want to do is break that goal down into quarterly, monthly, weekly, and potentially even daily goals.

Getting this granular allows you to account for seasonality in your business and see your momentum throughout the year. 

The easiest way to do this is to take the % increase you’re shooting for this year and add that to your actual sales numbers from last year. This is easily done with a formula in an Excel sheet. 

For example, if you’re looking at a 15% increase in sales and you did $10k in March and $12k in April, then your sales goals for this year would be $11.5k in March and $13.8k in April. 

You’ll also want to go through and make any necessary adjustments to account for product launches, holidays, or any marketing event that could skew your numbers. For example, sometimes Cyber Monday falls in November and sometimes it falls in December. Maybe one year you launch a new product, get a shoutout from a popular influencer, or participate in a collaboration that brings a huge spike in sales. It might not be realistic for you to hit that revenue level again, so you’ll want to adjust your numbers to accommodate that. 

But… be careful. You can easily go down a ridiculous rabbit hole at this stage and that’s not what I want for here. I just want you to set realistic goals based on your business patterns and seasonality. 

This can be especially important if you have a brick-and-mortar store and you’re holding your associates accountable for their sales performance. 

For example, if you’re going to break down into daily goals for your brick-and-mortar, then you don’t want your Monday goal this year to be based on a Sunday goal from last year because it’s likely your Sundays will have more foot traffic. 

If you have multiple associates in your store each day, for example, one who works the opening shift and a different associate for the closing shift, then you’ll want to break those goals down by the hour to be fair to your associates. It’s unlikely the morning associate will be able to generate as much revenue as the evening associate because you won’t have the same amount of foot traffic. 

If you’re online only, you don’t have to get any more granular than weekly or monthly, otherwise, you’ll drive yourself a little batty. As a general rule, the higher volume you are, the more granular you can get.

If this is your first time breaking out goals like this, don’t go too crazy with it. Just get some general numbers out. Don’t worry about making it perfect trying to accommodate for every single potential variation right now. You can always adjust these goals throughout the year as you have more sales data. 

Using Your Data to Drive Your Marketing Decisions

Once you’ve got a solid breakdown of your revenue goals and what that looks like over the next few months of your business, now it’s time to figure out how you’re going to get there… because wishing for more sales isn’t a strategy.  

When it comes down to it, retail and eCommerce are essentially just one big math problem. And at the end of the day, there are only a handful of levers you have to increase your sales. Your traffic, conversion, AOV, and your margins. Sure, there are plenty of individual tactics and strategies you can use to increase those, but they pretty much all fall into one of those buckets. 

And this is true whether you’re online only or if you have a brick & mortar store. 

So, if you know that you want to increase your revenue by 15% this year, you’ve got to figure out how you’re going to do that. 

Are you going to increase your traffic, increase your AOV, increase your conversion rate, increase your margins, or are you going to do a little bit of everything?

If you’re going to do a little bit of everything, how much does that increase need to be? Is it 1,000 more visitors per month or 5,000? Is it a $5 increase in AOV or $15? 

It’s really hard to know what you need to do or work on if you don’t have a clear goal in mind. 

We’re not going to get into the full calculation on this episode, I walk you through it on episode 93 of the podcast. Take a listen to that episode if you’re not familiar with the calculation yet. Lounge members, use the KPI calculator in your Yearly Ops & Marketing Playbook to calculate this for you. 

Once you go through that exercise, you’ll know what increases you need to hit for each of those KPIs. Now that you have a specific goal, you can decide what you’re going to do to reach it. 

For example, if you decide you need to increase your AOV then you can look at increasing your free shipping threshold, adding cross-sells, and/or creating bundles. 

You can use this same strategy in your brick-and-mortar store. This is also a great way to keep your associates engaged and to help them hit their sales goals. 

Back in my retail days, when an associate missed a sales goal, or we missed our store sales goal I would break that down for my team so they could wrap their heads around what that actually means and how they can achieve it the next time around. 

For example, let’s say we had a sales goal of $4k for the day. With a $35 AOV and 100 transactions, that means we only made $3500. Missing our goal by $500 feels like A LOT, especially when you’re talking about an average transaction of $35. 

But… if you divide that $500 by the 100 transactions we had, that’s only an additional $5 per transaction. Feels a lot easier to reach, right?

When you’re thinking about generating more revenue in your business, whether it’s online or in-person, whether it’s setting your sales goals, or coaching an employee… I want you to get in the habit of breaking those numbers down into the smallest possible increments. 

Doing this will make it easier for you to implement specific tactics and strategies to reach those goals and to track your progress along the way. 

Doubling Down on What Works

The other thing I want you to consider when you’re deciding what tactics and strategies you’re going to use is to look at what is already working in your business and how you can capitalize on that. There’s no need to reinvent the wheel if it’s not necessary. Sometimes you just need to double down on what is already working. 

For example, let’s say you want to increase your traffic. The first thing I would do is look at what your biggest traffic drivers are today. Maybe you have ads that are performing well, it might be time to increase your ad spend so you can reach more people. Or maybe you need some SEO optimization last year and although it was a slow burn because SEO takes time to work, you see that it started to pop off in month 6. Well then, maybe you want to do a bit more SEO work. Or, maybe you see that the majority of your traffic and sales in coming from your email campaigns but you’re only sending one email per week. In that case, you might want to up that cadence to two per week to see if that brings in the additional traffic and revenue you’re looking for. 

While I am always a fan of trying something new and will advocate for that, I also want to make sure you’ve tapped your existing initiatives before you try an unproven method. 

It can be a delicate balance. You don’t want to get stuck trying something for too long that just isn’t working… but in most cases, I find the opposite is true. We jump from strategy to strategy hoping something is gonna skyrocket our business when really we just need to keep improving what we’re already doing. I always struggle to articulate this concept in a podcast episode because there are so many nuances and every business is different… but in most cases, if you’ve given something a solid 90 days and seen no movement whatsoever, then it might be a sign to try something new. Except of course for SEO since that takes a minimum of 3-6 months to show any results. 

Your Next Steps

While this type of planning isn’t exactly the sexy part of running a business, it is one of the most important. Having a solid understanding of how all these KPIs work together, and the power you have to leverage them, it becomes so much easier to grow your business. It also allows you to stay laser-focused on the task at hand. We’re going to talk more about setting your quarterly focuses, etc. in next week’s episode, but essentially, when you know exactly what you’re trying to achieve at any given moment, it’s way easier to say no to the things that don’t serve that goal, at least for the time being. 

For now, I want you to start doing the math. Last week I asked you to collect your KPIs. Now, use the formula outlined in episode 93 or in your Yearly Ops & Marketing Playbook to identify where your KPIs need to be in order to hit your revenue and profit goals. Then start thinking about what strategies and tactics you’re going to use to improve those KPIs. 

Other Episodes in This Series

310. Kickstart 2025: Setting Your Strategic Vision for the Year Ahead

311. The CASH Method: Your Framework for eCommerce Growth