It’s safe to say that every business strives for success. But in an ever-changing commercial landscape, the parameters of success may look different with each passing year as the goalposts keep shifting.
As businesses race to engage customers and outpace their competitors, it can become increasingly challenging to achieve success on your own terms. Setting clear, specific and achievable goals is of paramount importance, as is knowing the performance metrics by which you’ll chart your progress on the path to success.
However, in looking to the future, businesses need to learn from the past. The field of data analytics can provide insight that drives progress and positive change. Here are some ways in which businesses can leverage data analysis to inform their strategy and chart a path to success…
Know the difference between data and insight
Businesses can mistakenly equate data with insights and use the two terms interchangeably. Yet, while insights are made from data, data on its own doesn’t necessarily result in actionable insight. Indeed, one of the potential problems with a data-driven strategy is that companies can invest a great deal of resources into gathering data but are ultimately unable to make sense of that data because they can’t translate it into measurable business outcomes.
Think of data as the raw material from which insights are sculpted. However, data must first be processed into information from which insight can be gleaned. A big part of that is making sure that you’re looking in all the right places. Not all of the data you’ve collected may be relevant to your goals or even reliable. And in the age of big data, the sheer abundance of data available can be both daunting and distracting.
Another key factor is having the analytics tools to help you analyse that data and draw meaningful conclusions from it (more on that later). Yet, even when your data has been converted into insights, that doesn’t necessarily mean that your insights are actionable. For insights to inform your strategy, they need to be:
Relevant
All data is useful. But not all data is useful right now. In the age of big data, it’s easy to feel overwhelmed by the amount of data available and not know what to do with it. As such, you’ll need to approach your data with a clear focus on what’s relevant. That said, you also need to be wary of coming at your data with such a specific focus that you see patterns that are conducive to confirmation bias rather than providing real actionable insight.
Specific
Even encouraging data may not be useful to you if it isn’t specific in nature. For example, you may notice that your net profits were up last quarter… and that’s great. But while encouraging, this data is far too vague to offer actionable insights. On the other hand, scrutinising click-through rates of digital marketing campaigns and tracking referrals from a particular social media influencer can paint a much clearer picture of what is and isn’t resonating with your target market.
In context
How do you know if a statistic is an anomaly or the start of a trend? How can you tell if a sudden drop in sales is based on something you’re doing or part of a broader market trend? Acting on data without putting it in its proper context can lead to strategic mistakes which can create more problems than taking no action at all.
Aligned
Of course, for data to be actionable, it also needs to be aligned with your specific goals, which is why it’s important to always collect as much data as possible — after all, what’s useless in terms of this quarter’s goals may be invaluable for the next quarter’s.
Identify which KPIs matter the most to you
We’ve discussed ensuring that data is relevant… but how will you determine what’s relevant to you? Knowing which Key Performance Indicators (KPIs) are the most meaningful to your long and short term goals can provide you with the focus you need to make sense of your data without inadvertently using the data to conveniently fit your foregone conclusions.
The clearer and more specific your goals, the easier it is to identify the KPIs that will help you to track your progress. However, if you’re unsure where to start, some useful ones might be:
- Sales revenue — How much revenue does a new product line or marketing campaign generate?
- Customer Lifetime Value — This can help you to determine which customers generate the most revenue for you and must be retained at all costs.
- Cost Per Lead — This helps you to identify waste spending in lead generation strategies.
- Lead to Customer Ratio/Conversion rates — How many people who come into contact with your brand become customers?
- Organic traffic — How many new leads are coming to you through online searches? This can help you to identify whether your SEO strategy is paying off and giving you the edge over your competitors.
Whatever KPIs you choose to track, make sure that they’re aligned with your goals and there’s much more chance that your data will be actionable.
Harness your customer data to see what they really think of you
Your customers are an invaluable source of data and the feedback they provide you can paint a telling picture of how you’re living up to their expectations as well as how you’re letting them down. While one is more palatable than the other, both are equally useful.
Think beyond CSAT
Your Customer Satisfaction Score or CSAT can provide a great overview of what your customers think about you. However, unless they are bolstered by other data sources, they can lead you to draw over-simplified or even misleading conclusions. Moreover, CSAT on their own aren’t always particularly actionable, especially if a customer has rushed through it without leaving useful qualitative data.
Other useful repositories of customer data include:
- Net Promoter Scores
- Customer Retention Rates
- First Response Times
All of which can give you more context as to the kind of customer experience you’re delivering.
Stop being antisocial
Your social media presence isn’t just a means by which you can communicate with prospects and customers… it’s also a useful repository of data that tells you what people are saying about you… either to your face or behind your back!
Some of the most meaningful insights are those you glean from your social platforms, identifying when people have positive interactions with your brand as well as when people are being less than complimentary. Data mined from social channels can also help you to get an idea of how many people are talking about your brand. Whether you’re focused on customer growth strategies or delivering customer satisfaction, your social channels can provide useful and actionable insights.
Invest in the tools to help you make sense of your data
One of the most common frustrations when it comes to making data actionable is that the sheer wealth and diversity of collected data can be hard to gather into a single silo where it can be mined for valuable insights.
For example, Google Analytics might be a useful tool for tracking the efficacy of your marketing efforts but it is by no means the only repository of useful data. And when companies are run across multiple locations without a centralised repository, it can be difficult and frustrating to glean actionable insights from diverse data across numerous silos.
Fortunately, there are platforms which allow you to collect data from numerous sources and present it on a single accessible and shareable dashboard. What’s more, they can make it easier to measure KPIs across specific performance metrics and track outcomes in line with your goals.
As important as it is to gather data comprehensively unless you know how to make it actionable, you’re just a raft floating on a sea of numbers!
