From Data to Insights: How to Leverage Data to Foster Your Competitive Advantages
How does having more data around us translate into value for a company? Originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.
Data and analytics can help a business predict consumer behavior, improve decision-making, market trends and determine the ROI of its marketing efforts. When analyzing data for your business to understand your users, your market reach and the competition, it is essentially important to be relevant.
Data helps you understand and improve business processes so you can reduce wasted money and time. Every company feels the effects of waste. It depletes resources, squanders time, and ultimately impacts the bottom line. For example, bad advertising decisions can be one of the greatest wastes of resources in a company.
Today, gathering data to help you better understand your customers and business is relatively easy. In fact, it’s become so easy there’s the danger of having too much data to deal with.
In a recent article, data and analytics guru Bernard Marr said: “While the average small business has less self-generated data than big players. . .this doesn’t mean big data is off limits. In fact, in many ways, big data is more suited to small businesses, because they’re generally more agile and able to act more quickly on data-driven insights.”
A Forbes article discussing a survey from Deloitte, notes that “49 percent of respondents said analytics helps them make better decisions, 16 percent say that it better enables key strategic initiatives, and 10 percent say it helps them improve relationships with both customers and business partners.” But to take full advantage of data and analytics, you need to know how to get the most value from your data.
So what, exactly, does that mean? Here’s a look at five ways data can help companies of all sizes, and especially SMBs.
Data Helps You Make Better Decisions
As the Deloitte survey respondents made clear, even small startups generate data. Any business with a website, a social media presence, and accepts electronic payments of any kind is collecting data about customers, user habits, web traffic, demographics, and more. All that data is filled with potential if you can learn to get at it.
While there are many influences when making a decision–what’s happening in the company, global news, your gut–there is nothing as persuasive as having hard data to back you up. That’s profit-increasing power you can’t afford to pass up.
SMBs can gain the same advantages as larger organizations when using data, the right way. Businesses can harness data to make decisions about:
- Finding new customers
- Increasing customer retention
- Improving customer service
- Better managing marketing efforts
- Tracking social media interaction
- Predicting sales trends
In sum, data helps leaders make smarter decisions about where to take their companies.
Data Helps You Solve Problems
After experiencing a slow sales month or watching a poor-performing marketing campaign, how do you pinpoint what went wrong? Tracking and reviewing data from business processes helps you uncover performance breakdowns so you can better understand each part of the process and know which steps need to be fixed and which are performing well.
“The best-run companies are data-driven, and this skill sets businesses apart from their competition.” – Tomasz Tunguz
Data Helps You Understand Performance
Simply put, data helps you see performance. Sports teams are a great example of businesses that collect performance data to make their teams better. There isn’t a professional team, today, that does not employ a team of data collectors and analysts to help support and improve play on the field. They are always updating data about who’s doing what well and how that can help the team excel, overall.
Have you ever wondered how your team, department, company, marketing efforts, customer service, shipping, or other parts of your company are doing? Collecting and reviewing data can show you how all of this is performing, and more.
If you’re not sure about the performance of employees or your marketing, how will you know if your money is being put to good use? Or if it’s bringing in more money than you spend?
One example: Say you have a top-performing sales rep who you send most leads to. However, when you delve into the data it shows that she closes deals at a lower rate than one of your other sales reps who receives fewer leads but closes deals at a higher percentage. (In fact, here’s how you can easily track sales rep performance.) Certainly some performance data that can affect how you portion out leads–which can lead to revenue increase. Performance data provides the clarity needed for better results.
Data Helps You Improve Processes
Data helps you understand and improve business processes so you can reduce wasted money and time. Every company feels the effects of waste. It depletes resources, squanders time, and ultimately impacts the bottom line.
For example, bad advertising decisions can be one of the greatest wastes of resources in a company. With data showing how different marketing channels are performing, however, you can see which ones offer the greatest ROI and focus on those. Or you could dig into why other channels are not performing as well and work to improve their performance. This would allow you budget to generate more leads without having to increase the advertising spend.
Data Helps You Understand Consumers
Without data, how do you know who your customers are? Without data, how do you know if consumers like your products or if your marketing efforts are effective? Without data, how do you know how much money you are making or spending? Data is key to understanding your customers and market.
However, it can be easy to get lost in all the data you have if you don’t have the right tools to help you understand it. Especially for SMBs, a BI solution designed for them is the best way to access and interpret consumer data so you can leverage it for higher sales.
Today, running your business with the help of data is table stakes. If you’re not using data to uncover insights that will guide your business into the future, you will become a business of the past. Fortunately, the advances in data processing and visualization make growing your business with data easier than ever. And there are tools available to do it