Data driven business intelligence in practice

Becoming a data driven business can be powerful. Our data & insight team has been part of that journey with many of Livingbridge’s investees, seeing the valuable results secured from developing their data capabilities. 

Helping Hands is a case in point. When we invested in the home care provider in 2018, its biggest challenge was customer acquisition, with direct marketing costs looking prohibitively high. Our growth and insights team worked with Helping Hands to develop a customer lifetime value model, establishing that the revenues it could expect to earn from each new customer were substantially higher than the acquisition cost. This gave the company the confidence to press ahead with its direct marketing campaign. Over time, Helping Hands used the model to ask more sophisticated questions – focusing marketing spend. 

The specialist cloud services business Giacom, where we invested in a management buy-out in 2017, is just one example. The company was growing rapidly but lacked a means for understanding its total addressable market or which customers to target as a priority. We worked with Giacom’s sales and marketing teams to build a database detailing the potential customer base and a priority list for targeting new clients based on the attributes of existing customers. Giacom is now able to make truly informed decisions about where to focus its marketing efforts. 

Livingbridge’s data & insight team works with businesses to build their own infrastructures and capabilities, empowering them to take a data driven approach for themselves. 

We believe such capabilities will be increasingly crucial to ensuring businesses can remain competitive, whatever sector they operate in. Growing quickly can be a journey into the unknown, but a data-driven approach can provide a clear sense of direction. 

What is best in class management information?

A management information system is the infrastructure that enables your business to gather and present the key data revealing how it is performing across the company. 

In practice, however, there is no one-size-fits-all management information system that is perfect for every business – because every business is different. The first step is to identify the key indicators of success relevant to each function and then to understand what data the key decision makers need to inform what good and bad looks like in those areas. 

That will mean best in class management information is carefully collated so that it aligns to the business’s commercial drivers and objectives. Many businesses fall into the trap of thinking that more information equals good information, monitoring an almost endless list of key performance indicators. In fact, every business function should be able to identify a small handful of KPIs that really matter, rather than missing the key data in a blizzard of information. 

For the sales team, for example, key management information might include conversion rates from new leads. For marketing, digital campaign results could be a key indicator. Finance might choose to focus on deferred income. Human resources may be especially interested in employee turnover. There is no single right answer and every business’s key management information will vary. 

Having identified what should be on your management information system, it’s just as important to be confident everyone in the business is able to use it. Unless decision makers are able to access this information quickly and to understand what they’re looking for, the system will fall short. 

Management information in practice

At Livingbridge, we’ve worked with many of our investee companies to develop best in class management information systems. Our growth acceleration team, an in-house team designed to equip our investees to fulfil their potential, includes a dedicated group of specialist data and insight experts who can guide businesses through the process of improving management information. 

The results can often be very powerful. At Stowe Family Law, for example, our data and insight team helped the business’s leaders to identify a key missing element in their management information. The ability of the firm’s lawyers to convert initial appointments into fee-generating cases was a key driver of revenues, but lawyers had no access to data on conversion rates or what they meant for sales. Simply by rectifying this gap, Stowe was able to build much greater engagement with sales and marketing from its lawyers, with a significant boost to revenues as a result. 

Elsewhere, at the online heating oil platform BoilerJuice, another Livingbridge investee, our data and insight team helped the company to build very simple dashboards that gave decision makers access to key management information with one click – including a colour-based system for highlighting good performance and areas in need of improvement. BoilerJuice’s customer acquisition rates increased 83% in the six months after our data and insight team worked with the company.