Becoming more profitable

How to create a data-driven strategy

Big data is changing the way companies are doing business. No longer the sole domain of large corporates, small and medium businesses are also using data to harness previously untapped opportunities. 

 

The key to creating a winning data-driven strategy is to use analytics to turn collected data into real-time business insights you can use to make better, more informed business decisions. Here are five tips to get you started.

1. Understand the power of data

Technical jargon and buzzwords have complicated the world of data analytics. Fortunately, understanding how data can improve your business is quite simple. Think of it like this: every employee or customer action creates a corresponding data point.

On the employee side, that could encompass a number of operational processes – for example, the steps involved in converting a lead to a sale, how long it takes to close a customer support case, or the speed of your fulfilment process.

On the customer side, data can reveal a wide range of consumer behaviours. This can include how long they spent on your website and which products they viewed, what they bought when they bought it, and how often they buy. 

These data points, and many more, paint a detailed picture of your operational processes and customer journey. In other words, it shows you exactly how your business is performing at any moment and what any given customer experiences when they interact with your organisation. Once you understand your operational performance and the customer journey, it becomes easier to identify opportunities to improve.

2. Identify how you can use data

Data also encompasses your customers'' demographic information, such as their age, location, gender, income and interests. You can use this to create customer segments that similar group customers into categories. This enables you to craft marketing messages that are personalised to each customer segment for greater relevance. 

However, marketing is only one example of how you can use data in your business. You can use it for process improvement across your business. Whether that's optimising your website, improving your customer service or identify inefficiencies in your fulfilment chain, data can reveal a range of opportunities to improve your offering. 

3. Design a data road map

Every strategy is essentially about organising any activity into a unified process to achieve a specific business goal. The same is true for a data-driven strategy. Once you've identified how you're going to use data in your business, you can design a road map that will drive your strategy. 

Start with your business goal and work backwards. Do you want to lift customer satisfaction scores? Do you want to increase operational productivity? Do you want to expand your customer base? Do you want to identify cross- or up-sell opportunities? Identify the data points that will best reveal the picture that's relevant to your selected goal. 

4. Collect and store the data

You'll likely already have much of the data you need. You can often tap any CRM software you use for a range of customer data and connect Google Analytics or similar tracking software to your website to collect real-time web data. Any internal project management or production platforms you use could be a goldmine for operational data. You can also choose to purchase data from a third-party data provider.

In any case, remember that you are required to store customer data securely, and there are some important data regulations your business needs to comply with.

5. Analyse the data

Finally, your data-driven strategy should set out how you plan to analyse your collected data. There is a range of data analytics software available that uses your data to create a series of maps and graphics that transform raw data into a visual representation. This makes it much easier to discover real, actionable insights about your operational processes and customer journey.

Creating a data-driven strategy can help you understand your business's customer journey, spot inefficiencies and iron out potential bottlenecks, so your operations can continue to thrive.

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