In a world more driven by technology than ever before, effective business operations must take into account the behaviors and dynamics that it produces. From vendors to customers, the effects of technology shape how people purchase products, how they discover brands, and how other businesses interact with supply chains.
While advancements may make it easier for businesses to reach larger audiences, it also creates new challenges and competitive environments. More businesses are embracing the use of data to garner an edge against their competitors and improve profitability; companies that fail to embrace data for these purposes will inevitably find themselves at a disadvantage.
But how exactly does access to and understanding of data better position businesses to make improved choices? Given its immense role in long-term business success, let’s examine some crucial ways that data can transform the decision-making process for companies of all sizes.
Provides an Understanding of Customer Behaviour
Businesses that can understand their customers’ intentions and motivations are simply better positioned than those who do not. In many respects, the biggest driving force between companies seeking to understand and utilize data stems from understanding how customers behave. Ultimately, understanding allows businesses to employ specific strategies that maximize the effectiveness of their actions.
Everything – from product design to marketing – can be impacted by the understanding of customer behavior. Those with access to top-of-the-line analytics suites and datasets may discover a wealth of information about their customers, from auxiliary interests to key demographic patterns. When combined and funneled into a systematic strategy that focuses on specific individuals, ROIs are increased substantially.
Data also allows businesses to more effectively identify individual customers through channels such as email marketing and social media. This data becomes immensely valuable (see below) as it provides a more specific and refined opportunity for businesses to mine individual customers for data. A company can then repeat the process, look for seemingly random but repetitive data points, and then use those elements to improve decision making.
Gives Insight into Target Demographics
Any company that harvests massive amounts of data can feel overwhelmed by its presence. While everybody understands that data has inherent value, it may not be immediately obvious to some exactly what can be done with the data. Furthermore, the data itself may possess value not only in deciding who and what are ideal targets, but who and what are simply bad decisions.
Analytics resources can determine a lot about who is interacting with your brand, as well as who isn’t. This information provides an inherent advantage to those who understand it; for example, you may discover that shoppers over the age of 60 have no interest in your offerings. Additional data may yield clues and information that’ll help the business decide whether this is due to simple demographic irrelevance or due to unoptimized marketing and strategy.
Ultimately, sorting through this complex data requires skilled professionals who understand the nuances. By hiring or enlisting the services of business analytics graduates, companies can make better sense of the data and ultimately determine who is worth targeting and who is not. Click here to learn which industries are the fastest-growing for business analytics graduates.
Creates the Opportunity for Personalisation
As briefly mentioned previously, business decisions are only as good as the results they deliver. Given that business decisions ultimately seek to improve profitability – usually through increased sales and customer growth – there is a need to further establish rapport with individual customers and clients alike. One such way that data makes this a possibility is through its use in personalizing the shopping and marketing experiences.
Customized digital and traditional marketing campaigns can be used to further generate appeal with audiences that are likely to shop or engage with your brand. Companies can use individual data to personalize everything from email marketing campaigns to direct mail campaigns. This data can also be used on a company’s website or through ad affiliates; for example, if a customer looks at one or more items, similar selections can be remarketed to them via ads that reduce elements such as cart abandonment.
Companies that collect vast amounts of data may be tempted to use it in its aggregate, finding ways to appeal to a broader type of shopper, customer or client. However, brands that utilize personalization in marketing and decision making processes can generate far more effective outcomes with respect to earning additional sales and customers.
Helps Businesses Streamline Internal Operations
Businesses with long-standing operations can become accustomed to certain workflow processes and methods of operating. While steadiness in a business setting is valuable and necessary, it is imperative that companies do not become stagnant in their operations. This is yet another area in which access to data can help fuel better decision making.
Analytics that highlight consumer patterns, industry trends, the true cost of new investments, and other critical factors can accurately project just how tenable or viable any change to internal operations will be for the business. In short, data can help the decision-making processes of whether to modernize an assembly line or cut out one or more middlemen for more efficiency and accuracy.
Mitigates Potentially Risky Decisions
Last but not least, it is imperative for any business to understand the inherent risks that face their day-to-day operations. From shifting those internal operations mentioned earlier to transforming a marketing approach, there is risk is any decision a business makes. Jumping blindly into the foray – or even making a decision based on limited, industry-level information – may be the last bad decision a company makes.
With access to comprehensive and proprietary data, businesses can more effectively assess the cost-benefit situation associated with any decision. Not only can this help evaluate which decisions are riskiest, but it can also provide insight into alternative approaches that further minimize those risks.
No company can realistically claim that risk is desirable: this is yet another major reason why access to data during the decision-making process is vital for businesses both large and small.
Paving the way for better business decisions is possible through the use of sophisticated data. By collecting, organizing, and interpreting the metrics and data-points collected, a company can successfully make sense of it all through business analytics professionals. Once refined, this data becomes invaluable in guiding companies toward optimal decision making that produces long-term benefits.