It is doubtful anyone believes they do not need numbers to run their business. Unfortunately, most financial numbers are lagging indicators – meaning that a transaction has already occurred, and you’re just looking at the results of that transaction.
Leading indicators are great because you can use them to adjust course before you have a bad quarter. You should have a broad portfolio of leading indicators, including some of the interesting financial indicators. The more you have, the better the picture you can get of where your business is going.
A new indicator that retailers, in particular, must consider is customer sentiment. This is different than the official indicators of “consumer confidence” published by the government. Customer sentiment is a measure of how your current and potential customer base feels about your company, products, services and interactions.
Customer sentiment has both leading and lagging components. How much are potential customers looking forward to getting your product? That’s buzz, and that’s an excellent leading indicator. Initial customer reaction is very much a leading indicator, even though it is lagging for the small percentage of customers who just bought your product.
Customer sentiment data is directly accessible through social media, surveys, your own website, call centers, sales people, forums and other data sources. There are many services that you can get to help you follow trends in each of these areas. Each of these points of contact with your customers needs to be watched so that you can adjust as necessary.
If you already monitor some customer sentiment areas, you have positioned your firm well. What you need to look at doing next is converging your systems. In this way, instead of three siloed systems, you have one central repository for customer sentiment information.
A converged system lets you adjust social media strategy to account for customer confusion noted by your call center, or manage inventory and staffing on a social media trend, or understand the impact of a manufacturing defect on both customer support and your reputation in the marketplace.
It’s a big undertaking to bring those systems together, but the advantages multiply with the more data sources you combine.
Seth Redmore is VP of product development at Boston-based Lexalytics, a software and technology company.
