On Monday, we posted what has already become one of our most-read posts of the year, entitled “Who is Your Data Expert?” If you have not had a chance to read it, take a few minutes to do so now.
Enough readers have reached out with follow up questions about recruiting and hiring data analysts and scientists that we thought it a good idea to remind everyone of the critical step every company should take before employing your data expert.
You must know your key business questions (KBQs).
What is a Key Business Question
Key business questions are the questions that your data expert will be tasked with answering. They are the questions you have about business performance that are central to the overall strategy you are deploying, or considering deploying in the future.
The best way to define key business questions is to look at a few examples…
A key business question for Netflix (and most subscription-based businesses) is, “how long does each new customer stay with us?” The answer to that question will guide marketing and acquisition strategy. It will tell the marketing team how valuable each customer is, and what the return on investment is for each campaign.
Going a step deeper, another key business question could be, “what causes a customer to quit the service?” To become more profitable without raising prices, Netflix can lower the cost of acquiring new customers, or it could build strategies for keeping customers longer. It is only by knowing what causes a customer to quit the service that they might develop interventions that affectively keep people subscribed.
In this way, KBQs are the questions you ask to derive the key metrics you need to operate your business successfully. You may know the answers already, and you may not. But two things are supremely important:
Knowing the answers without knowing the question doesn’t help you. This is like looking at a business dashboard that is overly complex and does not drill down into the key performance indicators that truly matter.
Once you can agree on your KBQs, you need to ensure that you get accurate answers to those questions. Those answers are going to be what you use to drive strategy going forward.