Although it may seem that the concept of data collection is connected with the Information Age, effective business leaders have been collecting data long before the advent of technology. Business leaders have used that data to help them make decisions about their businesses. In the past, data collection was done manually.
A business might have questioned customers or clients in person or by taking surveys through the mail or over the phone. Businesses would use this data to create informed marketing strategies to reach more customers. However, because manual data collection was costly and time consuming, businesses had to rely on a small sample to make their decisions.
Now, with the technology available, it is easy to collect an ample amount of data to inform your marketing. In fact, you may find it challenging to sift through the data to understand what is relevant.
Bernard Marr, a data and analytics expert, said, “I firmly believe that Big Data and its implications will affect every single business – from Fortune 500 enterprises to mom and pop companies – and change how we do business, inside and out. Basically, no matter how small your business is, you do have a use for data.”
While data is important, you cannot rely solely on it to make your business successful. You must still work hard and make good decisions. Data is just one of the many resources you can use to grow your business.
Data and Decision Making
Even the smallest of businesses can create data. If your business has any sort of online presence like a website or social media account or if you accept online payments, then you have data that you can use.
When making decisions about your company, you likely have a lot of factors that influence your decisions. You may rely on intuition or things you witness within your company to help you make decisions. Data can be a powerful resource because it gives you facts and figures to drive your decisions.
For example, when ordering inventory, you may make purchases based on what you have noticed has been selling well. Or, by using data you could have exact numbers on which items are selling and how many your have in stock. Data can allow you to make the most accurate decision.
You may worry that your business has yet to generate enough data, but Merit Solutions states that any business that has been going for at least a year has “a ton of data” to use when making decisions. People just need to know how to use it.
Any size business can use data for a variety of purposes, including:
- gaining and keeping customers
- improving customer service
- marketing and social media
- making predictions about sales
Data and Problem-Solving
When your business is having issues, such as slow sales or an unsuccessful marketing campaign, you will want to use data to help you figure out exactly what went wrong.
Analyzing data can help you learn exactly what your business is doing right and what needs to be improved.
Data and Performance
If you want to know how your company or even certain aspects of your business is performing, collecting and analyzing data can show you.
For example, when marketing, it is important that your campaigns earns more money than you spend on the campaign. Data can help you see if your marketing is worth the money.
Or, you may have a salesperson who you think is the best in your business, so you give him or her the best leads. Reviewing data may show you that another salesperson has a higher performance, but gets fewer leads. Knowing what is happening allows you to make informed decisions.
Data and Processes
Data can make a difference in your processes and let you minimize waste and lost time. Marina Martin says in her book Business Efficiency for Dummies, “Inefficiencies cost many companies anywhere from 20-30% of their revenue each year.”
Business Insider states that businesses waste the most money on bad advertising decisions. Data can help you to focus your advertising and maximize your ROI.
Data and Consumers and the Market
Data allows you to better know your customers and what they want. PayPal co-founder Max Levchin said, “The world is now awash in data and we can see consumers in a lot clearer ways.”
Collecting data is essential to any business looking to gather and utilize real-world data to make smarter and more effective decisions. Collecting data is not a luxury but a requirement in the 20th century.