How to Use the Right Data to Make Effective Business Decisions Leveraging the right data is crucial to making the most impactful decisions for your business and its growth.
By Henry Ma
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The days of entrepreneurs and business leaders being forced to make key decisions off little more than gut instinct are long-gone. This isn't to say that you won't be forced to make guesses and assumptions about the next right step for your company or brand, but in today's world, there's no reason why you shouldn't also be relying on data to help guide you in making those decisions.
When it comes time to make the next crucial decision for your business, the importance of what data you use — as well as how much — lies in both its consistency and continued growth throughout the history of your business's lifecycle. By using the right data to assist your decision-making process, you can create new opportunities for your business that can generate additional revenue. The data can even predict future trends for your company and its customers alike while also optimizing your current operations.
However, using the right sets of data is easier said than done. You need to utilize data that provides actionable insights and is collected through the best tools available.
Related: Best Ways to Use Data in Making Decisions
Identify what data you need to answer crucial questions
Being able to identify and analyze the right data in your decision-making process is paramount in understanding what actions — or types of actions — can lead to creating the greatest impact and amount of traction you want your business to have. For instance, sending surveys to each of your customers after a sale is made or lost can help generate valuable insight into the unique journey each customer experiences when interacting with your brand. These insights will help you improve to grow your sales volume or order numbers.
Whatever your reasoning may be for using data in your decision-making process, the first step is to focus on what data sets are most important to that process. Furthermore, the data or sets of data you identify at the start of this process should always be able to produce insights to help answer any questions you have regarding how your business can be changed or improved upon through specific actionable initiatives.
By deciding on your business objectives, along with keeping the key questions you want to answer in mind, you can then be better prepared to seek out the right kind of data you'll need to accomplish objectives. When you begin identifying those data sets, it's equally important to remember not to bog yourself down into analysis paralysis by collecting a larger amount of data that won't be as helpful in answering your questions or making decisions. For example, if you are looking to identify data that can boost the manufacturing quantities of a specific product your business creates, including and analyzing data pertaining to your company's marketing initiatives may not be as relevant or helpful in this process.
Related: Good Decision Making Requires Good Data
Ensure you have the right tools for data collection and analysis
For any form of data analysis to be beneficial to your business, you need to understand if the tools at your disposal are the best ones to use for the tasks you need them to perform. After all, no one wants to spend time collecting volumes of data, only to realize that they've used the wrong tools or technologies in analyzing them.
As such, you must use the right tool (or tools) for collecting the specific data points you need to help you make the best decisions for your business. Start by asking yourself if the tools and technologies currently available can help you meet or exceed your goals or objectives. Likewise, if you realize that you lack the right tools to help in collecting and analyzing your internal data, you will need to research which ones will be able to perform these actions.
For example, if you are looking to collect and analyze data around how to improve the quality of the products your business sells, you'll need to make sure that you have the proper tools, like Salesforce, Marketo or even social media websites like Facebook, Instagram and YouTube.
Again, don't waste time collecting supplementary data that either doesn't provide you with answers to any key questions you have or won't provide you with any actionable insights. Without a systematic approach to collecting and managing data strategically, you're bound to end up with data saturation that will only further impede your decision-making process.
Related: How to Use Real-Time Data to Fine-Tune Your Business Decisions
Use the right data to instigate growth for your business
The overarching goal of data collection and analysis in your decision-making process should be to provide answers you can use to bolster your business's growth. Whether that comes from converting a larger portion of your target market into paying customers for additional revenue or simply predicting certain trends your business can get in front of before its competitors, all the relevant data you collect and analyze should be able to translate into strategic initiatives for growth.
After gaining clarity over what data is needed and reaffirming that you have the best tools to collect and analyze that data, you should involve other key leaders or decision-makers within your organization to gain their perspectives and insights as to how that data can best be used to spur growth. Bringing these individuals together and asking them what data is most important to their departments and teams can spur additional discussion to help you make crucial decisions for your business. Additionally, some of these leaders may provide insights others within your organization may not have.
Having enough data to help you make effective decisions for your business is paramount, but having the right tools to collect the right data from the right sources is invaluable.
