Growth and traction are among the primary goals of any startup, along with raising brand awareness and loyalty. For any business to take a sustainable path to growth, entrepreneurs will need to make decisions that will affect various factors like product lifecycle, human resources, marketing, and others. To ensure positive impact, these decisions will need to be based on data.
Why Make Decisions Based on Data
Data driven decisions help your business by ensuring you’re working toward continuous improvement, meeting accountability requirements, focusing your efforts and monitoring progress, and developing a sense of community through your organization.
Every business has to start with a plan. And no matter how well thought out and executed that plan may be, it will likely deviate from what you expected. You’ll need to use the data you’ve collected from your operations or customers to make educated changes to the plan, to make sure your business stays on the right track to growth and success.
The data will help you see how well you’re meeting goals, keeping you accountable. You’ll be able to use it to set new goals once you’ve reached the first ones you established. And when everyone works together as a team to use the data to move the business forward, you’ll foster community with the staff.
How to Incorporate Data in Your Decision Making
First, determine what it is you want to know. Data can be used to determine a lot of information about a business, for instance:
- How are customers responding to our sales and marketing campaigns?
- Which employee is bringing in the most sales?
- Which customers are giving the most value?
Next, determine which data you’ll need to get the answers you’re looking for. This can be anything from web analytics to CRM data.
From there, collect the data. The more sources of data you have at your disposal, the better informed your decisions can be.
Gather insights. Look at the data to determine answers to your questions. Look at all the data you have available to discover what other information it provides, and keep it in mind for making other decisions as they arise. For example, your web analytics data can tell you how long people are spending on your website, where they spend most of the time, and the path they take through your site. If bounce rates are high, or if conversions are less than ideal, it could mean you need to further optimize your web copy, navigation, layout or other elements.
The final step is to use the data to make recommendations/decisions. Once you determine which employee brings in the most sales, for instance, you could decide to reward his or her efforts. Once you find out who your most valuable customers are, you could reward them with a special discount or promotion to encourage more sales, or to encourage word-of-mouth marketing from them.
Tools for Acquiring Data
Many tools for data acquisition are now available as Software-as-a-Service (SaaS) product, which means these are accessible enough for small businesses, but scalable enough to accommodate growth. Here are a few notable examples.
Cyfe is a social media analytics tool and business dashboard that allows you to examine your audience from a variety of channels, such as Facebook, Twitter, and YouTube, to see what’s going on with your outreach and engagement activities. With the available data, you can then determine whether or not changes need to be made to your strategy and campaigns.
NetBiscuits is an analytics platform designed to help marketers and web developers improve their channels for multi-screen devices. It detects the device, and then displays analytics data for each – so marketers can see how well their website is performing on a desktop/laptop compared to a smartphone or even a smart-TV. The platform also allows marketers to ensure the right content is delivered to the right device to improve the user experience.
Google Analytics is a free, robust web analytics tool that allows you to track a variety of metrics. Find out where people are coming to your website from (so you can spend your marketing budget wisely), what page they’re leaving your website from, how long they’re staying on each page, how many people are converting (you can set custom conversion goals), and how well your AdWords campaigns are working (analytics for that can be integrated), and more.
Cooladata is a data powerhouse. It allows you to see data for nearly any business question you want to ask, giving you the power to really harness the data. Keep a close eye on key performance indicators (KPIs), segment your audience, analyze your sales funnel, and more.
Where to Apply Data Driven Decisions
Social media can tell you a lot about how customers are responding to your business. You can gather data about who’s talking about your products and services, who’s interested in what you have for sale, who’s not interested, who’s had a positive experience with your company, who has had a negative experience with your company, and more.
Email marketing is a wonderful way to reach current and new customers. Data about how many subscribers you have, how many people unsubscribe, how many people open your messages and click through to the websites you link in them is critical to learning how to adjust your campaigns. With data, you can determine the best day of the week or time of the day to send your messages. Data can also help you optimize email subject lines to attract more opens or clicks. You can also optimize frequency and the types of messaging, in order to improve conversions.
Customer service is key to the success of your business. After all, 86% of customers will leave a business, based on bad customer service experience, and 54% will share a bad customer service experience, compared to 33% who share a good one. Data about the customer service experience will help you see what’s working, and what’s not, so you can find ways to improve your customer service.
In the end, data-driven decisions have the power to propel your business. Ignoring the data – or failing to collect it in the first place – has the potential to sink your business. Why not use data to your advantage? If the big corporations do it, small businesses can, too.
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