Data analytics has become an indispensable tool for business success. From product development to sales and marketing, data drives decisions at every level regardless of a company’s size.
To make the most of this data in your business, however, it’s critical to ensure you have a robust customer data platform that’s set up to collect information. You also need to have the people and processes in place to ensure data quality and integrity remain high throughout the company.
That means understanding the good that comes with data-driven decision-making while also working to find the best sources, technologies, and methods for organizing and analyzing your findings. When you get these right, you can transform raw numbers into powerful insights.
Examples of Data-Driven Decision-Making in Businesses
Many companies use business analytics for data-driven decision-making. This can occur in virtually any area of an organization, but it is particularly effective in the following:
Tapping the Right Data
More than simply knowing how to use data, data-driven decision-making in business requires that you know where to get the data in the first place. There are plenty of routes to take, but some are particularly effective:
Your marketing techniques should be as multifaceted as your customers are. It’s relatively straightforward to build incredibly detailed customer profiles. With the right tools, you can go well beyond basic demographics and segment your target audience by looking at social behavior, financial data, lifestyles, shopping habits, and much more. Each customer profile can include hundreds of attributes, allowing for highly targeted marketing efforts.
While successfully executing your email campaign is satisfying, that’s only the beginning. Perhaps the most crucial part of your campaign is what you learn from it. You should carefully monitor your email newsletters, advertisements, and other efforts to collect important data about what does (or doesn’t) work. This insight will help you refine and reach your audience each time you execute an email marketing campaign.
The times and ways in which your customers are best primed to connect with your brand will depend on the products or services you’re selling. It’s important to know when they might shop online or in a store — and when they might be just looking instead of looking to buy. Understanding buyer behavior patterns allows you to put your brand in the right place at the right time to meet buyers where they are.
Social media is a rich source of data for your business — and this goes well beyond the likes on your pages and posts. The best social media campaigns have specific and measurable engagement goals. Whether you want to raise your total engagement rate, increase or decrease mentions, boost retweets, or increase click-throughs, know what you’re aiming for and how to track it.
This simple metric — the average amount customers spend per order with your business — is one of the most important data points you can track. When you increase average order value, you raise revenue without increasing your per-transaction costs. You don’t have to be an accountant to know that this will boost profits.
Do you know how visitors are finding your website? Whether they come directly, through a web search, or via referral will significantly shape what they’re seeking and how they engage with your site. Tools such as Google Analytics can help you analyze these traffic patterns, see which ones produce the highest conversion rates, and improve your website for each type of visitor.
With fully enriched data profiles for your customers, you’re better equipped to reach audiences that look like they fit these profiles. This allows you to build focused campaigns to reach new prospects.
Perhaps no company has better captured and harnessed these different data sources than Amazon. The online retail giant is continuously gathering data on millions of customers to build highly specific customer profiles. It uses this data to segment customers, recommend similar products, and distill its massive online storefront to show each customer products selected just for them.
A deep set of data — and the power to analyze all of it — unlocks significant possibilities for your business. But the question remains: How do you access the data and harness its potential?
Ensure Data Quality and Integrity
Before you can put data to use in your business, you have to know that it’s complete, accurate, and organized. Without that confidence, it will create uncertainty about the information you’re using to build your campaigns and reach your audience.
Your first task is to take all the disparate data, much of which has been anonymized, and use it to build comprehensive customer profiles. This happens through identity resolution and data enrichment.
The second step in this process of ensuring data integrity is the intimidating task of organizing your data. After cleansing your data to ensure it’s accurate, you then must break down any data silos to guarantee everything is easily accessible in one place. It’s difficult to make strategic decisions when you’re dealing with incomplete information.
When these processes are prioritized, the result will create effective analytics leading to powerful insights. Companies that do this feel confident that they can trust the accuracy and completeness of their data. They have a comprehensive picture of their audience based on facts.
These qualities are the hallmarks of data-driven decision-making in business, but you can’t attain them without the right technology.
Use Technology to Build Your Customer Data Platform
In today’s economy, it’s impossible to tap into this data without up-to-date technology. There’s far too much data to gather and analyze to use outdated tools and methods. With more than 40% of organizations planning to increase their data-driven marketing budgets, a significant portion of that investment should go toward technology.
You need business tools and technologies that gather customer data across all touchpoints in their journey — your website, social media pages, in-person, digital, analog, and more. Strategically placed tools can funnel data into a central platform. At that centralized point, software like a customer data platform allows you to create the kind of unified, robust database that you need.
What should you expect of this technology? It should be easy to implement and use while also having the data and tools necessary to make strategic decisions for business growth.
Some key questions to ask technology vendors include:
Your choice of tools for data collection and analysis is one of your most important business decisions. The wrong technology will cut off your access to critical insights. Take the time to examine your options thoroughly and speak with a vendor that understands your business.
How to Turn Your Data Into Insights
At this point, you know where to find the data, how to ensure it’s accurate and organized, and the right business tools and technologies necessary to collect and analyze it. Now, it’s time to translate everything into actionable insights for your business.
When you face a mountain of data, it can feel overwhelming. Just remember that your goal is to harness those business analytics for data-driven decision-making.
That may sound complicated, but it can be summarized in four steps:
We mentioned this step earlier, but it’s worth revisiting. Again, this process involves merging third-party data with your own to create a complete picture or profile of your customers.
This can be any kind of data — household information, income levels, marital status, phone numbers, and more. These findings enable you improve the segmentation of your target audience, personalize your outreach, and amplify your lead targeting methods.
When you’re analyzing customer data, remember that people fall into three distinct categories: There are prospects, current customers, and lapsed customers. Each one demands a different sales and marketing approach. Proper audience segmentation and targeting will take this into account.
Organize your customer data into these three categories to ensure you develop the best outreach approach for each type. A customer data platform greatly simplifies this task and helps you keep your data in order.
Effective marketing accounts for the full customer lifecycle. You must understand the different emotional states of your prospects, new customers, and loyal customers to best speak to them.
Your ultimate goal is to move everyone along the customer journey toward a final destination of long-term loyalty. That involves creating a map of the customer journey, evaluating their experiences along that path, and figuring out how to improve and enhance those experiences.
Buyer behavior patterns are complex and influenced by many factors. These can be psychological, personal, and social — and they may differ significantly based on the situation and context.
Beyond merely collecting data, your marketing development should also involve growing your understanding of various factors as well as any current trends influencing customer behavior. This will help you better relate to your customers and speak to their needs.
Unleashing the True Potential of Data
As you work to implement these strategies, it’s essential to keep a few things in mind. First, be sure to avoid duplicate systems (and duplicate data). Be very careful when merging systems to ensure the data integrates correctly and that everything stays reliable and accurate.
Second, make every effort to understand new technology — and the needs your business is addressing with that technology — before implementing anything. If you don’t have a clear view of these things, you’re bound to take a few wrong turns or fumble the rollout of any new technology.
Finally, ensure the technology is easy to implement and use. Plan to roll it out in close connection with your internal teams, taking a gradual approach so you can deal with issues and communicate clearly with your staff. If your team members don’t feel comfortable with the technology, nobody will adapt to it — and you’ll never be able to make the most of your data.
Data-driven decision-making is critical in business today. Without the right tools and techniques, you’re left guessing who your customers are and how to reach them. When you can capture and analyze your customer data, it will shape everything you do.
Contact us to learn more about how Pearl can help you decode your data, get better acquainted with your buyers, and grow your business revenue.