Have you been driving business decisions with your intuition for a while now? Does your business decision come at the ripe moment when the competition did a similar act? Acting on the spur of the moment or relying on others for your crucial decisions can impact business growth.
What works for someone else may or may not work for your business. While following the lead may help you on some days, it is not the ideal decision-making habit. Your business data may offer different insights and provide personalized recommendations that cater to your customer’s requirements.
There is an explosion of data, in different formats, coming from various sources. It indicates multiple details about the industry, the customers, and your competition. You can mine the data available to understand the consumption patterns with the help of business data analytics. Along with this, you get to know the dynamic shift in your business, and how to make decisions without inviting risks.
You enhance the overall products and service offering using the data to understand what your customers need.
Data-driven Decision Making
Businesses need to make strategic and defining decisions to scale their business, add more prospects and gain more value. When backed by data from the past, every decision can help you follow the right path.
For example, when you are a marketer, you may need to decide on an ongoing campaign. You may need to determine if you want to add more budget to the campaign or not. If the data proves that the campaign may not be working, you should either change the campaign or abandon it.
Similarly, if you believe that a particular department is adding to your overall costs, you may want to look at how you can reduce these costs. You need to decide what is causing the rise in overheads and see if you can optimize them.
Benefits of Data Analytics for Business Decisions
As we have seen in the earlier part of this article, there are obvious benefits associated with data analytics for better decision-making. Here, we will take you through all these benefits and address why you opt for analytics.
1. Makes Way for Innovation
It is not enough for businesses to stay ahead to create a better product; you need to innovate. You need to create a need for a product and make people believe in purchasing the same.
The first-ever iPod was a need creator; there was a need for a small device that could play songs anytime, anywhere. This data-backed insight led to the creation of the Apple device that innovated the entertainment space.
The data-backed decisions are more futuristic and have a predictive viewpoint surrounding them. Data allows you to understand the future and know how things might change.
2. Better Consumer Understanding
When you read through the data, you get a complete understanding of your customers. You know what they like, how they consume your products, and which services they use the most.
Suppose most customers come to you for hair services. It is an excellent time to introduce hair products that might complement the benefits and get you more revenue.
You will again check the records to see which products people prefer at your salon. It will help you know which products you should stock at your store.
3. Avoid Biases
When you make decisions backed by data, you study everything from the user’s consumption to their demographics. Eventually, you will have a cluster of the same demographics, consumption and behavior patterns, and other details. It will help you know your target persona better.
Without the data, if you were to build your persona, you might have biases. You might think people who are young purchase your music systems. On the contrary, after studying the data, you would realize that people within the age groups 35 and 50 are more likely to purchase them.
When your buyer persona goes wrong, your campaigns are ineffective, resulting in poor sales.
4. Better Sales
Imagine you are heading the sales department at a retail store. You have noticed a slight slump in the sales figures for a while. This has become a cause of concern for your team and management.
Instead of going ahead with a sales campaign that you believe will fetch you good conversions, you decide to study the data. One of the biggest reasons for the drop is attributed to the rearrangement of your store. As a result, people are unable to find things. Secondly, the store next door seems to be offering mindless discounts.
If you had just offered discounts based on what your competition was doing, it would put you in a sore spot. Instead, when you decide to study the data and check if a campaign can work, you put more effort into your decision.
The data-backed insights will recommend how to engage those people who have stopped shopping and make those loyal to you feel good.
Eventually, you will enjoy better conversions, and people might start revisiting your store.
5. Mitigates Risk
The biggest issue with decision-making that businesses face is the risk of making bad decisions. As we discussed in the earlier part, your judgment that is supported by gut can be pretty risky. Your audience may not favor the decision, and it can cost you a lot of money.
You have more control over your operations, profits, and business growth when the decisions are made using data. You can assure your decision-makers of the whole strategic viewpoint behind the decision.
Let’s take a marketer planning an entire IMC campaign for an upcoming product. They would need to manage the TV spots and radio spots and even identify the channels that will work best in their case.
If they did what others competitors were doing, it might not end well. The campaign results would not be too promising. However, if they chose channels that mattered to the target audience and promised growth potential, it would help them garner the results and achieve the goals.
Businesses should use data-backed insights to make empowering decisions to help business growth. You have hidden recommendations and a lot of growth prospects when you work with raw data.
It is essential to choose the right tools and partners to mine the data and analyze them to grab the best insights for your business.
Search for the best data research companies and analysts who can help you access the best insights and convert them into recommendations. It will help you foster innovation and mitigate risks while scaling your business effortlessly.