As we all know, data is very important for a business to run successfully. “Data” might sound a little overwhelming as a word, but at the end of the day that is everything any business is about.
Instead of getting intimidated by the concept of data handling and being data-driven, it is necessary to embrace it. If you are not making decisions and changes based on data, you are basing it on your presumptions and speculations, which is much worse.
Being data-driven very simply means that any progress that you make while doing a task or project is being pushed forward because of data and not because of your personal experiences or assumptions. You make crucial decisions and form strategies based on data interpretation and analysis.
It is true that most businesses obviously deal with data, but being data-driven connotes something a little different. It requires you to very methodically and systematically using the data to make powerful decisions.
You need to use the data in a way so that it helps with the revenue model, improves the process of decision making and enhances processes.
Benefits and importance of being data-driven:
As we have already established, there is no debating that it is very essential for a company to be data-driven. Data also acts as a good yardstick for employees to think of their actions and how those affect the results of the business.
It also provides a good way for employers to measure and decide on performance appraisals. This also gives a lot of clarity as to how the organization is doing as a whole and gauge strengths and weaknesses.
Let’s explore some benefits of a data-driven system for an organization:
- Increases effectiveness and efficiency – Data integration and analytics help in increasing a business or company’s core competencies and bring out a lot of undiscovered business opportunities. It can provide a lot of beneficial insights and plays a significant role in increasing efficiency and effectiveness.
- Helps generate more revenue – Data is key when it comes to revenue generation. There is a lot of scope to make improvements and make better predictions. A data-driven company or business can outsmart their competitors and come across a lot of innovative revenue generation techniques and therefore keep increasing revenue each year.
- Built-in feedback – When your business is data-driven you keep getting feedback all the time, whether directly or indirectly. It constantly shows you what is being liked and accepted and what is not. This helps you come up with new products and services, better initiatives etc.
- Quick decisions – When you know that your decision is based on hard facts and data then your decision-making process also gets faster. There is no need to spend a lot of time trying to make assumptions, thinking of hypothetical situations etc.
6 ways through which small businesses can become data-driven:
1. Create an inventory
Interactions and other activities with customers on a regular basis leads to generating a lot of data. But you need to know what to make use of. There are some obvious some that are not very obvious. Focus on the latter and try to grasp as much as you can. For instance, keep a track of who are your regular customers and create loyalty programs for them. Hence it is important to keep collecting data from each and every source, squeeze out every possibility and make an inventory.
2. Keep a goal in mind
It is very important to stay focused and keep a certain fixed goal when you into data collection. If you try to collect a lot of data in one go, it is easy to get overwhelmed by all the stats and metrics. Think of your business goals and figure out what is the part which actually needs to be monitored. Focus only on the important aspects or ones that are more prominent.
3. Reviewing is key
If there is no analysis or review post the numbers being collected, then the whole process goes in vain. Without proper review, data are just numbers and mean nothing. The numbers need to tell a story. Schedule at least one reviewing session each week to go through the metrics and figure out what are the recent changes. Also, keep in mind that different sets of data would require different kinds of tools to be analyzed.
4. Focus on the bigger picture
You cannot just stick to findings and revelations from one data set, you have to go through multiple of them to look at the bigger picture. It is necessary to figure out which variables are dependent and independent and accordingly weigh out the pros and cons.
5. Share with your team
No matter what, it is not possible to make all the decisions by yourself even if you are the boss. Always share with your team. There is no point in collecting data if you will not be sharing it with your employees. The staff needs to be trained in such a way that they are able to access the database, interpret the data and be able to formulate reports on the same. They need to understand the importance of being data-driven. Encourage and reward the team members for coming up with unique findings and new target markets.
6. Formulate a data-driven culture
Yes, it is definitely a challenge to inculcate this, but it is better for the long run if you are looking to become a data-driven business. The employees will gradually need to delve into this and make it a part of their work culture. A proper detailed plan needs to be in place regarding the kind of data to be collected, the quantity of data and the time-frame samples.
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