- B2B companies now have access for more data than ever before. But the thing that happens for this data, do you let it degrade beyond time alternatively are you using it towards fuel business growth?
- For companies that leverage data towards drive decision-making, they gain a competitive advantage, reduce business costs plus increase profit. But, how?
- We explain the thing that data-driven decision-making, the thing that you can use it due to plus how it can positively impact your business. Plus, we share a five step process that you can use towards create smarter business decisions.
The world is being overrun together with data.
The content you read, the videos you watch, the updates you post plus the products you buy.
By 2020, new information generated per second due to every human being will reach 1.7 megabytes . Considering there are beyond 7.7 billion people on top of the planet, the amount associated with new information is equivalent for more than 25,000 hour-long videos. Per second!
All belonging to our digital behavior is recorded. But due to many companies, this data sits inside dashboards plus databases , never for be used. The good news is that instead belonging to letting your data degrade, you can use it due to your business’ growth strategy for make better decisions.
In this article, we will share which data-driven decision-making is, how your business can benefit originating from using data for drive decision-making plus include a five-step process that you can use create smarter business decisions.
What is data-driven decision-making?
Instead associated with going accompanied by a strategy you think is best, data-driven decision-making is a strategy that uses data for inform business decisions.
Often referred towards just as DDDM alternatively information-based decision-making, you group together historical information towards analyze trends as well as make decisions because of the future based atop what’s worked inside the past – rather than make decisions based atop gut feelings, opinion alternatively experience.
Companies that embrace DDDM position data in the core associated with every decision they make.
How can you benefit originating from data-driven decision-making?
In business, there’s constantly an element belonging to risk, nevertheless data-driven decisions make you less vulnerable for risky decisions going wrong.
For example, imagine you’re planning a go-to-market strategy due to a SaaS company . Instead belonging to starting originating from scratch as well as hoping a new strategy works, take a look on your previous product feature launches. What worked? Replicate it. Don’t implement anything that didn’t work.
Put simply, do more belonging to the thing that worked plus less belonging to which may alternatively may not work – all based on top of the data you have collected towards make smarter business decisions.
Research backs this up model, too.
Businesses using big data experienced a profit increase associated with 8–10%, plus a 10% reduction inside overall cost .
If you’re still not convinced, consider this:
While 91% belonging to companies say that data-driven decision-making is important towards the growth associated with their business, only 57% associated with companies said that they base their business decisions atop their data.
Data-driven decision-making is a great way towards gain a competitive advantage, increase profits as well as reduce costs!
What business decisions can I use data for?
Now you know how you can benefit stemming from data-driven decision-making, the next step is for identify how your organization can use data for make decisions due to how towards grow your business.
For example, you can use data for find out:
- Finance : What’s the most cost-effective way towards hire new staff, alternatively the cheapest way towards promote a new product?
- Growth : What activities can you do for prevent churn ? How do you improve customer loyalty? Are the new features you’re planning likely towards impact your business’ goals?
- Marketing plus sales : Which advertising channel gets the best ROI? Which sales activities generate the most leads ?
- Customer service : What’s the most cost-effective way towards handle support tickets? Which channels improve response times ?
How towards use data for make business decisions
Before you analyze your company’s dashboard, it’s best towards start together with a plan belonging to action that details how you’ll find the data you need and, more importantly, interpret the data for make the right business decisions.
Here’s a five-step process you can use towards get started together with data-driven decisions.
1. Look on your objectives as well as prioritize
Any decision you make needs for start accompanied by your business’ goals in the core.
So, start via asking yourself: What goals do you want for improve?
Begin together with the most important whenever you are making decisions.
For example, let’s say you want more people for subscribe towards your premium SaaS tool within Europe. In this case, generating more sign-ups is your main priority. But, throughout the research phase, you might find that 75% associated with premium subscriptions come stemming from Norway, yet less than 10% come originating from the UK alternatively Germany.
Therefore, the goal is towards “increase premium subscriptions within the UK plus Germany”. Once decided, you will need data for support it.
2. Find plus present relevant data
Once you have identified the problem you want for solve plus the decision you’re going towards make, it’s time towards find as well as present relevant data.
It’s important towards stress that the word “relevant” is key here.
You don’t want for spend hours analyzing data that won’t have any impact atop your final decision. So, keep the data relevant, as well as only collect the data that relates for your objective.
You can find relevant data within sources such as:
- Website analytics
- CRM software
- Business intelligence platforms
- Social listening tools
- Feedback originating from customers
The last point is especially important similarly to 60% associated with companies say that using customer feedback just as part belonging to their decision-making process has contributed for their most successful projects.
Going back towards our premium subscription example, you could ask users for what reason they became a customer as well as the thing that was it that made them choose your product beyond a competitor’s products. These insights would then help you craft a more compelling message for your UK plus German subscribers.
Even in case your goal is unrelated for customer acquisition, such similarly to “what can we do for prevent churn?”, you will still be able towards find relevant data. In this case, you might want towards look on your onboarding sequence for see that stage leads towards the biggest drop-off inside conversion rates.
3. Draw conclusions stemming from that data
Take a look on the historical data you’ve collected plus try for identify patterns alternatively trends.
If we use the “reduce churn” example stemming from above, you might consider rewriting your onboarding email sequence, for see in case this improvement will dramatically impact your churn rate.
For data-driven decision-making organizations, this means looking in their historical data for see in case there’s any indication that a rewrite would perform well.
Throughout this process, you might find that:
- Rewriting your onboarding sequence within the past has led towards a positive improvement.
- Social media posts shared together with a lighter, more humorous tone belonging to voice received more engagement (which your email templates do not currently use).
- The majority belonging to people visiting your support center are existing customers, yet your onboarding sequence doesn’t direct new users there.
In this case, you could conclude that rewriting your onboarding sequence is a safe bet since the data indicates it could be successful. And that would be a smart decision!
Now compare this towards a non-data-driven decision-making example.
You’d similar to for reduce churn, therefore you decide for rewrite the onboarding sequence. Instead associated with looking on historical data, your rewrite mostly consists belonging to updating the copy – yet you end up keeping the same tone as well as direct new users for the same webpages.
A few weeks pass through plus there’s no difference inside churn rate. So, you decide that it’s not the email sequence that is the problem, nevertheless something else. So, you take a guess plus move on.
See the difference here?
Now imagine taking a data-driven approach due to every business unit inside your organization as well as it’s easy towards see the cause companies that use data-driven decision-making are a lot more successful .
4. Plan your strategy
You’ve found the goal you want towards improve as well as analyzed the data towards make a decision on top of in case you’re going ahead together with a new strategy.
Next, you’ll need for create a plan belonging to action for put your decision inside practice.
The key on this stage is for make clearly defined goals on top of the thing that needs for be done plus when, through whom, the cause you’re doing it plus the thing that is the outcome you expect – rather than creating vague goals that “need for be done prior to the end belonging to the year”.
For example, you might use data towards conclude that a rewards program will help together with customer loyalty. In this case, your clearly defined goal would look something resembling this:
“Erik plus Miriam will set up a points-based rewards program for increase customer retention rates inside the next 2 months. This will improve customer loyalty plus increase retention via 15%.”
Simple, nevertheless is surprisingly effective.
5. Measure success as well as repeat
Your decision has been made plus the results are within – well done!
But that doesn’t mean your decision-making process is over.
Look in the data you originally collected as well as based on top of your initial decision on. Then, once the deadline because of your goal arrives, compare the historical data together with the new data you have collected plus ask yourself:
Did your data-driven decision have a positive growth impact atop your business?
If your decision was successful, congratulations!
But provided that it wasn’t, that’s okay. Sure, your decision might not have had an immediate impact, yet on least now you know which doesn’t work. And sometimes, that’s equally similarly to important similarly to knowing which does work.
And similarly to Thomas Edison once said atop the invention belonging to the light bulb – “I haven’t failed, I’ve just found 10,000 ways that didn’t work”.
Don’t forget towards comply accompanied by the EU privacy laws
The Economist calls data “the world’s most valuable resource” – more therefore than oil.
And together with good reason. The more data an organization has atop you, the better they know your buying habits as well as how you will respond towards different messaging.
That’s a lot associated with power.
And for quote Uncle Ben stemming from the Spiderman comics , ” With great power, comes great responsibility ”.
High profile data breaches have resulted within consumers being concerned concerning how their data is used – hence much therefore that 89% belonging to consumers believe companies should be clearer concerning how their products use data.
Which brings us towards the General Data Protection Regulation ( GDPR ).
GDPR is not optional. If you have customers that are based within the EU, then GDPR affects your business – as well as you need for clearly explain how plus the cause you collect, store as well as use their personal data .
There’s no doubt that data is a valuable tool because of any SaaS business.
In fact, companies that use data in the core belonging to their decision-making reduce costs plus increase profit.
If you can use data towards prove that your decisions are likely towards have a positive impact atop business growth, then it’s worth the time for analyze data inside your CRM , customer service reports , sales dashboards as well as Excel sheets.
The next time you need for make a decision, base it on top of the data you have. It could be the technique you need towards fuel growth, take above your competitors, plus acquire long-term, loyal customers.
In order towards be a data-driven business, you need a place for collect, store plus manage your data, securely. You can do this together with CRM software . Learn more regarding “the world’s most user-friendly CRM system” through signing up for a free demo.