We've all heard the phrase "time is money," but these days it seems like "data is money" might be more appropriate. According to The Harvard Business Review, high-performing companies that employ data-driven decision making are 5% more productive and 6% more profitable than their competitors. Cha-ching! But data is more than just a money-maker. Today's consumers have high expectations--and a whopping 72% expect companies to understand their needs and expectations. Good news: That same money-makin' data can help you build stronger relationships with customers, too.
Let's get down to the nitty-gritty. With growth on their minds and limited resources on hand, how do small businesses keep up in a data-driven market? Luckily, the task is not as daunting as it seems. You're probably already collecting a huge amount of data, whether it's orders in your POS system, inventory levels from your ecommerce shop, or traffic from the company website. Now, you just need to transform that data into intelligence--and voilà! You can see your existing data in entirely new ways. Here's an action plan to help you get more out of your data:
- Set goals that match your business objectives: Before digging into your data, define what's most important to your business. Perhaps it's growth, a new product launch, building a strong team, or surpassing a competitor. Once you nail that, you can recognize which data sources and metrics are key to isolate from all the noise out there. Spend time thinking about your company--what's your bottom line, what's influencing behaviors--and hone in on what information could help you make better decisions.
- Use the right tools: The decisions you make from data are only as good as the data itself. Bad data comes in many forms--duplicates, missing or inaccurate info, outdated sources--and can cost small businesses up to $100 per record. It's likely you'll have data coming from multiple sources and programs, which can make analysis costly. So invest in tools and technology that will help you focus on quality collection, aggregation, and analysis. Consolidating all your data into a system like a customer relationship management (CRM) platform will provide a single source of truth across all your lines of business. Services come and go, but your valuable company and customer data should remain with you until the end.
- Expand access: Once you consolidate and organize your data into a central view, make it actionable by sharing it with the broader team. Business growth is inhibited when departments operate in silos; when everyone has the same view of the business, you can truly start making data-driven decisions and keep everyone moving in the same direction. When you share data, like customer information, with the broader team, you communicate and coordinate with less friction and operate like a well-oiled machine. Your small business will run a lot smoother when your team is in sync.
- Make it a habit: When you need to make decisions, start asking, "what does the data tell us?" Create a culture where data becomes part of the discussion and decisions. The best way to start applying data analysis is to use your intuition to guide the process, then use data to tell you whether your gut is true or false. And that's where the power of data comes in: in the past people relied on their knowledge and experiences to make a decision, but now we the ability to say for sure what is working or not.
- Stay nimble: Small businesses have the advantage of agility. Look at your data and formulate tests and hypotheses. Then apply those actions as tests. These isolated tests can help drive more productive outcomes that you can rollout on a larger scale. And if you're applying AI technology to your business, then you're already one step ahead of the game. AI helps you automate manual tasks and proactively cull actionable insights to support your current business workflows.
Your existing data can help you make better decisions so you can strengthen your business performance, productivity, and relationships. Don't wait--because after all, you know what they say...Data is money.