It’s no secret that with every passing year we become more and more reliant on technology, both personally and professionally. Small businesses have come to rely greatly on data to drive the decisions they make to improve sales and grow their businesses. As a small business owner, it simply isn’t enough to just follow your gut instinct when it comes to big decisions.
In order to achieve the results you’re striving for, you need to implement data-driven decision-making, collecting and using data that is already available to inform your core business decisions.
Let’s take a look at why it’s so important to use your collected data, and a few ways to successfully incorporate a data mindset into the culture of your company.
A competitive edge
Analytics and the data it produces gives you a substantial competitive advantage over others within your industry, as long as you can use it effectively. There is so much valuable customer data that can be easily collected, processed, and turned into constructive insight for your business, so why not make full use of the cutting-edge analytics tools.
Don’t think that running a data-driven business is only important for larger companies. Even if you’re a one-man business, you can tailor a data-driven strategy tailored specific to your needs and goals.
One of the easiest ways to begin incorporating the use of data is to break it down into the following three categories:
- Descriptive: This is the most basic way to utilise data analytics. It offers a brief summary of a given data set.
- Predictive: This uses statistical modelling, data mining, and machine learning to look at your past and present data in order to help you strategise and optimise your future business decisions.
- Prescriptive: The most advanced way to work with data, this recommends an array of action plans and shows the outcome of each plan. This utilises actionable data in the form of a feedback system, helping to track the outcome produced by the chosen action.
A recent survey revealed that data-driven organisations, regardless of size, are 23 times more likely to acquire customers, 6 times as likely to retain customers, and 19 times more likely to experience a notable profit from incorporating data-driven analytics.
With such significant potential for growth, why wouldn’t you want to utilise data to help you plan for your business’s present and future performance? Results for a small business can be especially dramatic when the statistics are this high.
To fully embrace a culture of data-driven decision-making, you’ll need to give your employees comprehensive training and full access to your analytics tools and data. When you invite them into the analytic process, you are empowering employees across every department to access and analyse data concerning their specific needs, and you are giving them the ability to think for themselves and strategise using the data as their guide.
Businesses that enable employee access to internal and external data are expected to double the value of the data collected along with the analytics investment. If you nurture a working culture where everyone has access to your data, employees will work together to find solutions to the various challenges your business may be facing.
As an owner of a small business, there are probably a variety of areas that you would like to improve and optimise. But time and cash flow are always in limited supply. This is why you should be patient and start small as you begin to use data to help craft the decisions you make for your company moving forward. You want to optimise your productivity and maximise your business’ chances for success
Start by picking an area of your business that you would most like to improve. If you’re focused on increasing sales, you might want to gain a clearer understanding of your conversion rates, or the average time needed to close a deal, or maybe just have a look at the revenue you expect to close in future months. If you’re in marketing, maybe you could look at increasing website traffic, lead volume, or lead quality.
Remember, you can’t improve everything at once. The process will take time to fully implement across every facet of your business, so be strategic and be patient.
Consistently monitor your metrics
As you monitor more metrics over time, you’ll start to notice patterns that will help you identify and understand the activities that lead to better results. Does more frequent blogging increase traffic? What email content is providing the highest click-through rate? Are your Facebook ads giving you substantial ROII? With answers to these questions, you’ll know what you can do to improve specific metrics, whether that’s website traffic, personnel utilisation rates, cash flow, or something else.
Provide a better customer experience
Ultimately, your goal is to attract and retain customers who are happy and loyal. A recent survey by Forbes interviewed 311 executives and found that 88% of their organisations have used data to better understand their consumers. More than half of these businesses confirmed that utilising data has helped them become more customer-centric.
So where do you begin? Ask yourself questions like:
- What are your potential customers looking for?
- What is their demographic?
- What are their consumer habits?
- Do you have a clear customer journey?
- Is the customer journey personalised, fast, easy, and useful?
- What data is needed to help enhance the overall process?
At each stage of the customer journey, determine what information and data should be collected to help you make marketing decisions that are specifically tailored to that stage.
The future success of all businesses, small and large, will be greatly determined by their use of data to drive their decisions and strategies. Are you ready to take the dive into data-driven decision-making?
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