Data-Driven Decision Making: Using Data Analytics to underpin Business Decisions
Data is everywhere. It is collected at the point of purchase, travel, ad click, and social media post like—making it more available to organizations than ever before. Using this data, through data analytics, for decision making, can be crucial for the success of your organization.
However, simply having access to data is insufficient for a business’ success – it also need workers who understand and can exploit data. There is a growing demand for data-literate corporate personnel capable of handling, analyzing, and interpreting data to support decision-making.
In this age of big data, fundamental data literacy—the capacity to assess, understand, and even challenge data—is increasingly valuable to businesses.
Making the right decisions is a critical component of running a successful business. But how do you know if a particular decision is correct? When making the appropriate judgments for their enterprise, business owners may have relied more heavily on subjective data sources. However, this is widely recognized as the least trustworthy technique to employ when making a critical business decision.
Not leveraging data to make all business choices, can put your organization at risk.
Why does a Business need Data Analytics?
Marketing relied heavily on guessing in the past, and business owners were frequently forced to take a shot in the dark when developing a marketing plan and addressing leads.
Unless they questioned the buyer where they heard about them, business owners often have no idea if a lead originated from a radio ad or a sign on the high street. Questioning the buyer was frequently the only means to determine whether marketing strategies worked better than others. The information provided was frequently of poor quality.
Four Different Types of Analytics
Analytics is used to derive actionable insights from data, which may be utilized to inform decision-making and strategy creation. There are four distinct sorts of analytics that you might employ based on the data you have and the type of information you need.
- Descriptive analytics – examines, comprehends, and describes something that has already occurred.
- Diagnostic analytics – is more in-depth than descriptive analytics in that it seeks to determine the “why” of what occurred.
- Predictive analytics – makes use of previous data, historical trends, and assumptions to make predictions about the future.
- Prescriptive analytics – provides precise activities that an individual or organization should take to accomplish future objectives or aims.
Today, however, things are radically different, with even the smallest organizations collecting vast data. Businesses of all sizes and industries have incorporated digital marketing as part of their business strategy. The internet will be the first location for most of your customers and clients to find your firm.
Benefits of using Business Data Analytics for Decision Making
Aside from making better marketing, content, and online presence decisions, there are other advantages to using data analytics.
Data analytics, and particularly marketing analytics, can provide numerous significant benefits to your firm, including the following:
Although it is difficult to forecast what will happen in the future with certainty, data analytics can help you get as close as feasible.
Predictive analytics is a form of data analytics frequently used by astute business owners to understand consumer behavior better. Enabling them to accurately predict how their customer base or target audience will react to a particular strategy based on past trends and actions.
For instance, web analytics software can help you determine which portions of your website lead to the most conversions. You can make the necessary modifications to improve the results using this information.
Learn the ‘Why’
Data analytics for your business helps you make sense of the outcomes you’re getting and understand why things are happening. Today’s customer journey is frequently complex from start to finish. Numerous factors influence the user’s potential to convert to a client.
The capacity to assess and use data in this manner can be valuable in various business situations. For instance, a marketing campaign or content strategy did not go as planned. It gives you and your marketing team data to help you make better decisions based on what has gone well.
Track your Success
It can be tough to get the complete picture when looking at the overall results today. Specific campaigns or methods may appear to be more or less successful when the data surrounding them is not examined.
Data analysis allows you to determine how effective you have been and better understand what is going on with your current marketing efforts.
Having access to this data as quickly as possible provides your company with a distinct advantage by allowing you to make the necessary modifications and adjustments based on the information, rather than waiting for things to go badly wrong before doing anything.
Have a Bigger Impact
Data analytics allows you to make more significant decisions. Analyzing and making sense of the customer data that your company has collected allows you to understand better a variety of aspects and deliver the most significant return on investment.
Data Analytics can help you gain a much deeper insight into your clients, allowing you to make more educated and strategic relationship-building decisions.
Using Data Analytics to Gain Better Business Insights
Decisions that will significantly impact your company’s future performance should always be supported and driven by data.
Data can help you learn and act on consumer insights, forecast future financial and market trends. Data analytics allows you to assess and monitor your company’s progress. It further allows you to understand more about your target audience and make smarter decisions based on facts rather than feelings.
The internet has swiftly become the first port of call for anyone looking for information, products, or services. Hence, a strong online presence and effective digital marketing methods have grown increasingly crucial. So, how can data analysis assist you as a business owner in making better decisions in these critical areas of your organization?
Enhanced Marketing Campaigns
Data from previous marketing campaigns can better determine strategies and data-driven decisions for future marketing initiatives.
For example, you may use previous campaigns to learn more about the marketing materials that were more successful in driving sales and conversions. You can then delve deeper into landing page design to learn more about how it influences reaction.
- Creating a relevant value proposition is tailoring a company’s basic concepts to appeal to various client categories.
- Knowing where to discover potential clients and how to grab their attention is essential for effective awareness building.
- Consumer happiness, retention, and loyalty may improve by knowing customer demands and delivering what they want while keeping them pleased.
Data can also assess the most effective advertising platforms, such as email marketing, social media marketing, and paid commercials.
Consequently, businesses are better positioned to make prudent investments in the future. This is because they have access to the knowledge they need to make the appropriate decisions based on what has worked.
- Increased share of wallet – by ensuring a business is providing all of the right products at the right prices, to drive incremental sales.
- Higher conversion – by understanding and optimizing the sales process through reducing friction and making the decision to purchase easier.
- Productivity gains (cost to serve) – matching operational resources to customer demand.
- Better customer experience – by understanding the purchase decision making cycle for each customer type and designing the experience to suit it.
- More repeat business – through understanding the repeat purchase cycle for the customer and proactively reaching out to them at the most relevant time.
Improving your Website
Nowadays, most business owners recognize the value of having a current, high-quality website that represents their brand. The primary reason is that your website is frequently the first impression that customers have of your brand.
Your website performance is critical to your online selling success. It has never been more critical to collect and use data that you can consider when making future website improvement decisions.
- The online experience is optimized from search to product research and selection
- Building frictionless sales and purchase procedures to make shopping as fun and easy as feasible.
- Improved multi-channel experience – recognizing the effect of offline and online information on decision making and integrating the experience across all channels.
You can learn how your website affects your customer’s journey by using various tools. These can be used to identify which portions of your site are most likely to produce leads or, on the other hand, which areas of your site users tend to bounce off the most frequently.
- Optimized inventory – predicting customer demand for each product and ensuring sufficient supply is in stock and on the shelves.
- Optimized delivery – matching delivery schedules with customer needs to avoid last minute basket abandonment.
- Customer centric value proposition innovation – using historic customer purchases and customer needs research to design new products and services that continuously meet your customer needs.
- Customer led business strategy – setting out the business strategy in line with the known behaviors and trends of the customer segments and untapped customer groups.
- The correct product range – ensuring that the most relevant items are available.
- Optimal pricing offers a diverse variety of items at the most competitive prices for each consumer.
- Effective promotions – creating and implementing promotions that result in targeted sales or product trial results.
- Rebate optimization must be used to increase the share of wallet and purchase weight while minimizing margin erosion.
- Solid supplier relations entail the development of coordinated marketing and promotional sales efforts with a company’s vendors and vendors’ vendors.
- Improved forecasting and understanding of value drivers – using known customer behaviors and metrics to drive accurate financial forecasts and build more effective scenario tools.
- Better investment returns – more accurately plan likely outcomes based on customer segments to target investment at the highest opportunity areas.
- Improved recruitment outcomes – recruit based on aligning with the customer demand and ensuring that front line staff mirror the customer base.
- Improved employee engagement and retention – use data to better measure and understand the drivers of engagement with the business to deliver greater employee performance.
Tips for using Data to Drive Business Decisions
Using data analytics to drive business and marketing decisions necessitates adopting a data-driven attitude and making data analysis a top priority before making any business decisions.
You’ll need to put your company in a position where you can collect the data you’ll need to make these decisions in the future and choose the finest tools to get the best results. Here are a few pointers to consider:
- Set Clear Goals – Understanding what you hope to accomplish with a data-driven decision-making process and marketing plan. Your goals will assist you in defining how the data is examined based on whether you want to increase leads, conversions, and sales or boost brand awareness.
- Use the Right Tools – The tools you use for data collection and analysis may make or break your performance. Spend some time exploring the essential data collection and analysis technologies available, such as customer relationship management (CRM) systems. These allow you to trace your customers’ movements from when they contact your company or make an order to fulfill.
- Learn from Your Competitors – One of the finest locations to discover more about your target audience is through your competition. Remember that if you are not evaluating data to make more strategic decisions and your competitors are, they will already have a significant advantage over you. Analyzing your competition might help you understand more about what they are doing successfully to attract the clients you are after.
- Present The Data Visually – The ability to graphically present data and information is another crucial step in making data-driven judgments. Creating data visualizations ensures that the data can be understood and that our analytical efforts are not wasted. Having accurate and current information also helps us get a better understanding of our overall company operations. Creating the correct data visualizations can help us uncover KPIs and speed up decision-making.
Today’s business decisions frequently jeopardize the company if they are not supported by data analysis. Data analytics is one area where you can look at and analyze data before deciding what to do.
Gathering and evaluating data to inform all marketing and other company decisions can help you make more strategic decisions with a higher likelihood of success.