Data Analytics

How you use data and translate it into information can lead to higher profits.

By Ron Slee

We have experienced a true revolution over the past 60 years.

With the arrival of computers in the 1940s and 1950s and then the subsequent rollout of the technology into our business lives and personal lives, the computer revolution began. The Internet arrived in the 1970s and 1980s, and the information revolution began.

When the Walkman portable music device came on the scene shortly after that, the music business was dramatically altered and a music revolution started. Then cellular telephones and all the recurring advances that came after started a communications revolution.

We are now seeing artificial intelligence beginning to make headway. There is little in our lives that has not experienced a disruption. The world around us is changing dramatically.

So how about our work lives? Technology is everywhere in our jobs as well.

Productivity seems to be constantly challenged. We seemingly need to do more with less. We have voicemail, we have email, and we have texts. And our cellphone is with us 24/7.

What will be the next big thing? A common question. But in asking that, we have overlooked some simple things too.

The trouble with most of the data we have is it is not available in the form of information. We need to start correcting that.

We have data—oodles and oodles of data. The trouble with most of the data we have is it is not available in the form of information. We need to start correcting that.

Customer History

We know the guy, when he buys, and how often he buys. Yet we don’t look at buying patterns. Over the years of reading this column, you know I have said customer retention is the single most significant key to profitability of your business.

In the industrial distribution businesses, you can improve the profitability of your enterprise if you can increase customer retention by as little as 5%. But how do you increase customer retention that much? That’s a big question, but I want to focus first on things we can and should control.

Current Customers

I want to retain them. I don’t want any of our current customers to ever stop doing business with us. However, there is a problem with this. How do you know when your customer stops buying from you?

We have the data, but we don’t convert that into information we can act on. Let’s begin by looking at your customers’ buying habits.

Look at the customer purchases over a rolling 12-month basis this year and the previous year. Are they growing, shrinking, or staying about the same? What is the average time between purchases for each of your customers? What if they haven’t bought something within a normal time period? They are late by two weeks. What do you do? Do you even know this?

There is a lot of work to do here. But it is extremely worthwhile work.

Current Inventory Performance

The most important issue for a customer with your parts business is availability. Most of you have read about my number one rule in the parts business: “Find every part every customer orders the same day they order it and let them know where it is so they can make a decision on how they want it shipped.”

How well do you do at that? That is data for us as well, isn’t it? What part numbers are in short supply? How do you know that? Every stock order you receive from a supplier that has a part that was either short-shipped or not shipped at all tells you something, doesn’t it? That part is in short supply.

So what have you done about it? And what about the part that is not in the bin, yet the computer says it is? That is data, and what is being done about it?

Current Completion Dates

The top issue for a customer with your service business is completion date. They label that as responsiveness. How quickly can you be available and how long does it take you to do the work? That is data.

The standard times for repairs and maintenance, the skill set inventory of the technical workforce, and the degree of difficulty of the work to be done—all these are data elements in our business systems.

Yet what have we done with it? Have we converted it to information so we can provide a quotation we can stick to and a completion date we consistently meet? I submit to you we have work to do here.

Customer Relationship Management

We have customers who communicate with us. We have salespeople in the field. We have telephone and counter salespeople in the store. We have field service technicians doing repairs at the customer sites.

We have lots of interactions with the marketplace. But what do we do with that data? Does the salesperson who is making a call to the customer know it’s the birthday or anniversary of the person they will be calling? Do they know there is a part that was ordered on backorder? Wouldn’t this information be helpful?

And what about all those customers in the marketplace we used to do business with who are no longer buying from us? Do you know who they are and why they don’t buy from you anymore? Do you know why they choose to do business with one of your competitors?

This is but a short list of cases where we have data needing to be converted to information that can lead to action. There are many more.

DACUM Codes
To help meet your professional needs, this column covers skills and competencies found in DACUM charts for drillers and pump installers. DO refers to the drilling chart and PI represents the pumps chart. The letter and number immediately following is the skill on the chart covered by the column. This column covers: DOK-1, DOK-7, DOK-13, DOL-9, DOL-11, PIG-4, PIG-10 More information on DACUM and the charts are available at www.NGWA.org/Certification and click on “Exam Information.”

In our training business, I typically begin asking questions of the students. I begin with the same three questions.

What are the definitions of:

  • Ignorance?
  • Stupidity?
  • Insanity?

I get funny looks but few answers. So here are the answers:

  • Ignorance is not knowing what to do.
  • Stupidity is knowing what to do and not doing it.
  • Insanity is continuing to do what you have always done and expecting different results.

We have oodles and oodles of data, but what do we do with it? The fancy term of what we need is data analytics. We need to convert our data to information and use the analytics of the data to provoke constructive action.

It needs to be action that will make a difference in customer satisfaction and employee satisfaction, leading to higher levels of productivity and service value, and ultimately to higher levels of profit.

The choice is yours. The time is now.


Ron Slee is the founder of R.J. Slee & Associates in Rancho Mirage, California, a consulting firm that specializes in dealership operations. He also operates Quest, Learning Centers, which provides training services specializing in product support, and Insight (M&R) Institute, which operates “Dealer Twenty” Groups. He can be reached at ron@rjslee.com.

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