Playing The Percentages 540X356


Playing the percentages

May 5th, 2017

I’ve always been a sucker for data. I love it.

Sadly, it’s the sort of fascination that will likely condemn me to a role as 'socially unskilled sod on his own in the pub'. I'll be the one nursing a pint for hours, reading the ingredients on bags of crisps and searching for hidden trends in the E-numbers and saturated fats.

Although to be honest, that's only a guess. I've got no actual statistics to back up that claim. Just circumstantial evidence. Which means I’ll need to head out to the pub to find more of that data I love so much (see first paragraph).

Because that's the problem with stats – they can be twisted to confirm or refute pretty much anything

Thanks to this healthy obsession though, I've delved into endless data analytics tools over the years. Pored over all their beautifully colourful charts, diagrams, and twirling infographics. Then got completely confused when half of them totally contradict the other half.

Because that's the problem with stats – they can be twisted to confirm or refute pretty much anything, creating hopeless complexity from things that are actually very simple.

But not always.

Take the 80/20 rule. Here's something that's beautifully simple, yet amazingly powerful. Also known as the Pareto Principle, it's an idea developed a century ago. And after a year of study, I've become fascinated by the way businesses are using it today, and the results it's giving them.

At its core is the idea that 20 per cent of your inputs creates 80 per cent of your outputs. Or in terms of business, you could say 20 per cent of your products bring in 80 per cent of your income. Or 20 per cent of your clients produce 80 per cent of billings, and so on.

It's such a compelling idea that here at LYD we've used the principle to build a data model you can use to analyse sales and product performance.

I won't go into the nitty-gritty right now, but basically 8020mybusiness can tell you where your most profitable products, services or clients are. In theory, it can tell you your most profitable anything, actually.

It's easy to use, and it's free, while paying subscribers can get more features including deeper analysis and more uploads. You can try the free version now at https://8020mybusiness.com/

It's still very much 'version one' so be gentle, but we're planning to develop it further as an API and add in additional factors like sales visits and email traffic.

We'd love to hear what you think of it so far, so give it a go when you get a spare five minutes.

It's been brought to you by a group of folks in Kingston-upon-Thames, who are really gagging for a beer and a bag of saturated fats right now.