Why Is Data Important for Your Business?

Successful business leaders have always relied on some form of data to help them make decisions. Data collection used to involve manual data collection such as talking with customers face-to-face or taking surveys via phone, mail, or in-person. Whatever the method, most data had to be collected manually for businesses to understand their customers and market better. Because of the financial cost, time, difficulty of execution, and more associated with data collection, many companies operated with limited data.

Data helps you make better decisions

Even one-person startups generate data. Any business with a website, a social media presence, that accepts electronic payments of some form, etc., has data about customers, user experience, web traffic, and more. All that data is filled with potential if you can learn to access it and use it to improve your company.

Global business process consulting company Merit Solutions believes any business that has been around for a year or more likely has “a ton of big data” ready to help them make better decisions. So if you’re thinking there’s not enough data to improve your decisions, that’s probably not the case. Often, we’ve seen that not understanding how data can help or not having access to the right data visualisation tools holds companies back from using data in their decision process.

Even SMBs can gain the same advantages as larger organisations when using data the right way. Businesses can harness data to:

Find new customers

Increase customer retention

Improve customer service

Better manage marketing efforts

Track social media interaction

Predict sales trends

Data helps leaders make smarter decisions about where to take their companies.

Data helps you solve problems

After experiencing a slow sales month or finishing up a poor-performing marketing campaign, how do you pinpoint what went wrong or was not as successful? Trying to find the reason for under performance without data.

Tracking and reviewing data from business processes helps you pinpoint performance breakdowns so you can better understand each part of the process and know which steps need to be optimised and which are performing well.

Sports teams are a great example of businesses that collect data to make their teams better. If coaches don’t collect data about players’ performances, how are they supposed to know what players do well and how they can effectively improve?

Data helps you see performance

Have you ever wondered how your team, department, company, marketing efforts, customer service, shipping, or other parts of your company are doing? Collecting and reviewing data can show you the performance of all this and more.

If you’re not sure about the performance of employees or your marketing, how will you know if your money is being put to good use? Or if it’s bringing in more money than you spend?

Data helps you improve processes

Data helps you understand and improve business processes so you can reduce wasted money and time. Every company feels the effects of waste. It uses up resources that could be better spent on other things, squanders people’s time, and ultimately impacts your bottom line.

Business Insider lists bad advertising decisions as one of the top ways companies waste money. With data showing how different marketing channels are performing, you can see which offer the greatest Return of Investment and focus on those. Or you could dig into why other channels are not performing as well and work to improve their performance. Then your money can generate more leads without having to increase your advertising spend.

Data helps you understand consumers and the market

Without data, how do you know who your actual customers are? Without data, how do you know if consumers like your products or if your marketing efforts are effective? Without data, how do you know how much money you are making or spending? Data is key to understanding your customers and market.

The clearer you see your consumers, the easier it is to reach them. PayPal Co-Founder Max Levchin pointed out,

“The world is now awash in data and we can see consumers in a lot clearer ways.”

The data you need to help you understand and reach your consumers is out there.

However, it can be easy to get lost in data if you don’t have the right tools to help you understand it. Of all the tools out there, a BI solution is the best way to access and interpret consumer data so you can leverage it for higher sales.

Data helps you know which of your products are currently hot items on the market. Knowing a product is in demand allows you to increase the inventory of that item to meet the demand. Not knowing that info could cause you to miss out on significant profits. Similarly, knowing you sell more items with Facebook than with Instagram helps you understand who your actual buyers are.

Today, running your business with the help of data is the new standard. If you’re not using data to guide your business into the future, you will become a business of the past. Fortunately, the advances in data processing and visualisation make growing your business with data easier to do. To simply visualise your data and get the insights you need to propel your company into the future, you need a modern BI tool.