How Data Can Improve Your Business
Data gathering has been used to help aid in business decisions for hundreds of years. Along with consistency, hard work, and making good decisions, data in an invaluable tool for several areas when it comes to looking at trends within your business. From discovering areas where your business may be leaking money to finding what audience to cater to, you can stay on track when it comes to goals and decisions. Here are some ways that data can help improve your business decisions and strategies.
Data Helps You Make Logical Decisions
Whether you got your MS in business analytics online or you have built your business from the ground up without prior education, emotional decision-making can be detrimental to your business strategy. Collecting and analyzing data helps you to avoid making decisions based on emotion. For example, you may feel like you sold more inventory last month than you did. When it comes around to ordering more inventory for this month, you may over order based on that feeling. By looking at the data, however, you would be able to see that you don’t need to order as much inventory, and you can save on this month's expenses by using data-driven decision making.
Data is also often bigger than you can see. You can analyze data from different departments that you may not have a lot of direct contact with, for example. How would you ever know where you can cut costs in the Accounting department when you deal primarily in HR, for example, without some sort of data to show you what expenses are assigned to that department?
Data Helps You Advertise Efficiently
One of the most impressive things that data can help your business with is advertising and marketing. An enormous amount of data is collected today when it comes to consumer behavior patterns. As a matter of fact, there may be almost too much data in this area. Some of the ways this can help you, however, can include:
- Using data from ads on social media platforms to help you identify and advertise to your target audience. This allows you to spend money on ads that can be shown only to people who are interested in the products and services you are offering. Not only does this create very specific targeting to your audience, but it allows you to save money. This is by not spending advertising costs on audiences that are not your primary audience.
- Using data from advertising campaigns to understand if the message you are sending is effective. If you spend $10,000 on an advertising campaign and expect to gain 50,000 new customers but only gain 20,000 instead, you may need to tweak areas of the campaign.
- Split test your ads and messages to see which ones perform better. This is especially easy when it comes to Facebook or other social media ads.
- Discover which ads are turning into sales by tracking clicks, opt-ins, or other important factors.
Data Helps You Identify Performance Trends
Data can also be used to determine which departments or people in your business are performing well. Let's say that you are trying to determine if sending your employees to a continuing education class will help with their work performance. You can track their performance before and after and use that data to help make that decision. You can also use that kind of data to see which employee is getting the most sales. This may need more help and coaching.
Aside from employee performance, you can also identify sales performance in general. Maybe Tuesday is your slowest day, for example. Based on that data, you can create a promotion or special to bring people in on Tuesdays and drive sales up.
Data Helps You Understand Market Trends
Studying market trends is essential when it comes to your business. This is what helps you to advertise Christmas apparel in November instead of June. Or swimsuits in the summer instead of winter. One example of using seasonal market data might include looking at your sales from last year to determine when to ramp up for the holidays. This is often why you see Christmas pop up in stores right after October. Businesses are using data that shows that people are buying Christmas-themed goods during that time of the year.
Data can and should be used for most of your business-making decisions. We can collect data today in ways that are efficient and inexpensive compared to ways of the past. There is a plethora of information out there to help guide your business to success and data really is the best business partner you can have.