When something goes wrong in a business, we naturally want to understand why. A customer says the price is too high. Sales have slowed. A team member says customers seem confused. A prospect chooses a competitor. Each piece of information tells us something, but it doesn’t necessarily tell us what’s causing the problem.

That’s where assumptions can slip into business decisions without us realizing it.

Suppose sales have been disappointing and several prospects have mentioned price. It would be reasonable to conclude that the business has a pricing problem. Lowering the price, introducing a less expensive offer, or running a promotion might seem like the obvious next move.

But what do we actually know?

Trending

What Your Communication Patterns Reveal About Your Business

We know sales aren’t where we want them to be. We know some prospects have commented on price. Everything beyond that still needs context. Customers may not understand the value of the offer. The business may be attracting people who were never a good fit. A competitor may be easier to understand or easier to buy from. The sales conversation may not be addressing the questions customers need answered before they’re ready to make a decision.

Price might be the problem. It just isn’t the only reasonable explanation.

That distinction is important because once we decide we know why something is happening, we tend to start looking for information that supports the conclusion we’ve already reached. We also stop asking some of the questions that might lead us somewhere else.

Start With What You Actually Know

Business owners make decisions with incomplete information all the time. We have to. The goal isn’t to investigate every problem until there’s no uncertainty left. It’s to recognize the difference between the information we have and the explanation we’ve attached to it.

Take the pricing example. These might be things we actually know:

• Sales declined during the last quarter.
• Three prospects specifically mentioned price.
• A competitor recently introduced a lower-priced option.
• Fewer proposals are converting than they did six months ago.

Those are useful pieces of information. But “our prices are too high” is a conclusion drawn from them.

It may be the right conclusion. Before changing the price, though, I’d want to understand more about what’s happening. Are prospects objecting to the actual dollar amount, or are they struggling to see enough value to justify it? Are the same types of customers buying as before? Did anything else change around the time conversion began to fall? Are customers choosing a lower-priced competitor, or are they choosing an offer that seems easier to understand?

Those questions aren’t meant to delay the decision. They help determine whether changing the price is likely to improve the result.

Customer Feedback Matters, but Context Matters Too

Customer feedback can be incredibly useful because it gives us access to something we can’t see from inside the business: how customers experience what we sell.

The mistake is treating every comment as a diagnosis.

If a customer says, “This is too expensive,” that’s important information. But there’s a difference between hearing the comment and knowing what it means.

One customer may genuinely be unable or unwilling to spend that amount. Another may not understand what’s included. Someone else may be comparing your offer with something that looks similar but is actually quite different. A prospect who was never a strong fit may have objected to the price regardless of what you charged.

That doesn’t mean we dismiss feedback we don’t like. It means we look for enough context to understand what the feedback is telling us.

A single comment can alert you to something worth examining. A pattern across several customers carries more weight. If the same concern repeatedly appears at the same point in the buying process and is supported by what you’re seeing in sales, you have much more to work with.

The Numbers Don’t Make the Decision for Us

Data can help us see what’s happening without relying entirely on instinct or individual comments, but numbers still need interpretation.

Imagine website traffic increased 30 percent while sales remained flat. That tells us more people visited the website without producing a corresponding increase in sales. It doesn’t automatically tell us why.

Maybe the additional traffic came from people who weren’t a good fit. Maybe visitors reached the website but didn’t understand the offer. Maybe they were interested but weren’t ready to buy. Maybe the problem happened after they contacted the company.

The number gives us evidence. We still have to understand what’s behind it.

This is one reason I’m cautious about making business decisions from a single metric. Revenue, website traffic, leads, conversion rates, customer retention, project delays, and other numbers become much more useful when we look at them in context rather than expecting one number to explain the business.

Your Instinct Is Information Too

There’s another source of information that business owners sometimes either trust completely or dismiss too quickly: their own instinct.

When you’ve spent years running a business, you notice things. A customer conversation feels different. The team seems to be struggling in a way the reports don’t fully capture. An offer that used to generate interest isn’t getting the same response. You may recognize a change before you have enough data to explain it.

That instinct shouldn’t automatically become the answer, but it shouldn’t be ignored either.

If you find yourself thinking, “Something has changed,” use that as a reason to look closer.

• What are you noticing
• When did it start?
• Where is it showing up?
• Is there anything else that supports what you’re sensing?

Experience can point you toward the right questions. It becomes more useful when you’re willing to test what you think you’re seeing instead of treating the first explanation as settled.

Ask What Your Conclusion Is Based On

Before making a meaningful change in the business, it helps to examine how you reached the conclusion behind it.

You don’t need a complicated process. 

Start with a few straightforward questions:

• What do I know happened?
• What am I assuming about why it happened?
• What information supports that explanation?
• What else could reasonably explain what I’m seeing?
• What would I want to know before committing significant time, money, or resources to a response?

These questions won’t remove uncertainty from business decisions, and they aren’t supposed to. They create enough separation between what happened and what we believe caused it to keep a reasonable assumption from becoming an unquestioned fact.

That matters most when the decision is difficult or expensive to reverse. Changing a headline is one thing. Changing pricing, hiring someone, replacing a system, discontinuing an offer, restructuring a team, or making a significant marketing investment deserves more scrutiny.

The size of the decision should influence how much confidence you need in the reasoning behind it.

Diagnosis Before Tactics™ Requires Curiosity

Last week, I wrote about understanding what a solution is supposed to change before choosing the tactic. This week takes that idea one step further: we also need to understand what our explanation of the problem is based on.

That’s an important part of Diagnosis Before Tactics™.

The purpose isn’t to make business decisions more complicated. It’s to avoid becoming so attached to the first reasonable explanation that we stop considering what the business is actually telling us.

Sometimes the first conclusion will be right. The pricing problem really will be price. The overwhelmed team really will need another person. The marketing really will need more investment.

When the evidence supports that conclusion, move forward.

But if the evidence doesn’t support it yet, spending money on the corresponding solution won’t make the conclusion more accurate.

You Don’t Need Perfect Information

There’s no point at which a business owner knows everything before making a decision. Customers aren’t always able to explain why they behave the way they do. Data is incomplete. Markets change. Teams are complicated. Sometimes we have to make the best decision available with the information we have.

Good diagnosis isn’t about eliminating that uncertainty. It’s about knowing where the uncertainty exists.

If you can distinguish between what you know, what you believe, and what you still need to understand, you’re in a much stronger position to decide whether you have enough information to act.

That’s very different from waiting for certainty.

It’s also different from allowing an assumption to become the basis for a major business decision simply because it sounds reasonable.

Before You Decide What the Problem Is

The next time something in your business isn’t producing the result you expected, notice how quickly an explanation comes to mind. It may be based on years of experience, customer feedback, data, or something you’ve seen before, and it may turn out to be exactly right.

Before building a solution around it, ask yourself what supports that conclusion.

If you can point to the evidence, explain the reasoning, and account for other realistic possibilities, you probably understand the situation well enough to make a more informed decision. If you can’t, there may be another question worth asking before you commit resources to the answer.

Next week, we’ll take this thinking into another part of business growth: what happens when individually reasonable decisions leave the business carrying more tools, processes, meetings, systems, and tactics than it actually needs.

Continue the Conversation

One of the benefits of talking with other business owners is hearing how someone else looks at a situation you may have been viewing from only one angle. A different question or perspective can help you recognize an assumption you didn’t realize was influencing your decision.

That’s the kind of conversation The Business360 Method® Community was created to support. It’s a free space for founders, business owners, and leaders to exchange perspectives, learn from one another, and think more strategically about the decisions they’re making as they build and grow their businesses.