Sales volume is increasing, and campaigns seem to be working. On paper, everything indicates that the business is moving in the right direction.
However, in management meetings, a difficult-to-explain contradiction emerges: while commercial indicators show positive results, the margin decreases, customer acquisition cost increases, and some channels show increasingly lower conversion rates.
All the data seems correct. So, what’s happening?
Each department sees a different part of the business.
The problem is not a lack of information. The company has metrics and dashboards, but each team interprets the situation from its own perspective:
- Marketing believes campaigns are working because sales are increasing.
- Finance warns of declining profitability.
- Operations cannot identify what is causing this behavior.
None of these interpretations are necessarily incorrect. The difficulty lies in the fact that indicators are analyzed in isolation and do not allow for understanding how decisions made in one area affect the business as a whole.
“No KPI is wrong; each one simply tells only part of the story,” notes Christian Santín, Business Analyst Programmer at MindDen.
The answer appears when indicators are cross-referenced.
To understand what is happening, we analyze several KPIs together that had previously been analyzed separately: sales volume, applied discounts, acquisition cost, and customer behavior.
By observing them together, the explanation emerges. The company is driving very aggressive promotional campaigns to increase sales volume. The strategy succeeds in attracting customers and selling more, but the applied discounts significantly reduce the margin of each operation: sales growth, therefore, is masking a loss of profitability.
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From measuring volume to understanding its profitability.
Cross-referencing commercial, financial, and operational information changes the question. It’s no longer just about knowing how much is sold, but about understanding what value those sales truly generate:
- Which campaigns generate volume but reduce margin?
- Which channels have an excessively high acquisition cost?
- Which promotions attract truly profitable sales?
- How do Marketing decisions affect Finance and Operations?
- How do customers acquired through discounts behave?
By relating these indicators, we build a more complete view of what is happening and analyze profitability beyond sales volume. Santín, drawing from his experience, reminds us that “when you bring all the indicators together and understand how they relate, that’s when you truly understand what’s happening in the business.”
A problem that appears in very different sectors.
This situation is not exclusive to one type of company. The disconnect between commercial, financial, and operational indicators can appear in very different sectors:
Retail and fashion
More sales do not always mean more margin.
A promotion can increase volume while reducing the profitability of certain products or channels.
Industry
More orders can also generate more costs.
Increased demand can lead to higher production, maintenance, or energy consumption needs.
Logistics
More shipments do not guarantee higher profitability.
Urgent deliveries, inefficient routes, and incidents can increase the cost of each operation.
Services
More clients may require more resources.
Revenue increases, but so can the cost of acquisition, customer service, or support.
The pattern repeats across all these sectors: the main indicator improves, but it does not, by itself, show the impact on the business as a whole. Increasing sales, orders, shipments, or the number of clients can seem like a positive sign and, at the same time, generate higher costs or reduce profitability.
Therefore, analyzing indicators in isolation can lead to incomplete conclusions. The interpretation changes when they are related to other variables, such as applied discounts, acquisition cost, conversion rate per channel, necessary resources, or the margin obtained.
This is one of the main objectives of Business Intelligence and data engineering: to integrate information from different areas to transform isolated metrics into a common business vision. Data informs. The relationship between data allows for understanding.
More dashboards do not always mean better decisions.
This case reflects a common situation: organizations may have a lot of data and still not have a complete view of their operations.
As Santín explains, an isolated KPI can be correct and, at the same time, lead to a wrong conclusion. Sales can increase while profitability decreases. A campaign can achieve its acquisition goal and not be economically sustainable:
“Sometimes you don’t need more data or more dashboards. What’s missing is connecting the KPIs and seeing the business as a whole, not indicator by indicator.”
The true value of Business Intelligence emerges when information is no longer analyzed solely by department and allows us to understand how commercial, financial, and operational decisions relate. Because data doesn’t start to make sense when it’s accumulated, but when it’s connected.
Do your indicators also offer different answers?
At MindDen, we develop Business Intelligence and data engineering projects to integrate dispersed information, relate indicators, and build a more actionable view of the business.
Learn about our capabilities in Data and Artificial Intelligence or contact our team to discuss your case.