The right insights are essential for understanding what makes your business tick. To have true confidence in your business decisions, you must leverage the power of data analytics.
With quality data, you can better determine which types of content will deliver the greatest ROI for your brand. You can identify potential opportunities and challenges to your growth.
Of course, data is only as good as its ability to deliver meaningful insights. Here are a few key ways you can ensure that your data delivers.
1. Know what you actually need.
Today's technology gives business owners more potential data points than ever before. This can prove overwhelming for some founders, but it shouldn't. Instead, focus your data collection efforts on the areas that matter most to your company.
My fellow Inc.com columnist Howard Tullman gives an example of a small framing company that tracks and sorts product returns by cause. When a single issue contributes to six or more return tickets, the company marks that as a threshold for knowing that they have a legitimate problem that needs to be addressed -- and that solution doesn't even use an advanced computer program.
Don't get bogged down by data that you don't actually need. Start by focusing on key performance indicators like customer acquisition costs and retention rates. When starting your data analytics efforts, only worry about data that directly impacts your KPIs.
While you can certainly use additional data to improve efficiency in other areas, start by focusing on the data that will have the biggest impact on your bottom line.
2. Invest in tools that make it easy to understand data.
While knowing which data points you want to collect is a great start, many of us simply aren't equipped to analyze a large swath of numbers on our own. This is where the right data analytics dashboards come in.
Choose a data-analytics dashboard that allows you to focus on targeted KPIs, but also presents the data in an easy-to-understand manner. Combing through data to present information with easy-to-understand visualizations ensures that no insight falls through the cracks, allowing you to better recognize key trends. Adapting the dashboard to only focus on what matters most to the decision makers can eliminate the "quantity over quality" conundrum that keeps you from effectively using your data. When you can interact with the visualization in a way that helps you understand what to do next, you'll be able to unleash the data's true value.
Perhaps even more important, dashboards must have the ability to collect and analyze data in real time. The customer experience doesn't happen on a quarterly basis. A dashboard that provides real-time information will help your business become more agile and be better able to pivot to adapt to changing conditions.
3. Don't let confirmation bias get in the way.
Confirmation bias is one of the biggest risks business owners face when interpreting data. It can undermine your ability to take proper action using the data you receive. Remain objective when looking over data. Focus on what is actually happening, not what you think might be happening. Don't jump to conclusions about what the data means without investigating the root cause.
Take a deeper dive into your data to avoid confirmation bias. Collect data from multiple sources and audit it to confirm insights. For example, social media engagements might indicate that your customers love your latest product -- but actual website sales could paint a different picture.
Never assume you know the reasons behind a particular data trend. Analytics should serve as the jumping-off point for you to dig deeper and find the "why." This is how you will truly understand what is happening with your business so you can respond appropriately.
With the right data collection and analytics tools, you will be better equipped to see whether your business is on track for reaching its KPIs. You will understand where you need to make operational or strategic changes to become more efficient and profitable.
Data is ultimately the key to your brand's success -- use it wisely.