Life changes all the time. One day you’re planning your office expansion, the next you’re working from home waiting for government updates so you can make your next business decision. Getting up-to-date information from credible sources is essential for businesses trying to navigate through the pandemic. You wouldn’t decide to ask your employees to come back to the office based on three-month-old information from a tabloid newspaper.
The same principles apply to your data. You can’t make informed business decisions if you don’t have high-quality, up-to-date information.
Understanding business performance
Data, or rather the analysis of data, helps you to understand your business and customers. By tracking trends and patterns in your data, you can gain insight into how well your business is performing.
If you’re looking to grow your business, knowing how well (or not) you are doing is essential. The simplest way to measure performance is by using a management information tool. MI tools collect data from different sources, processes and organises it so you can use it to make informed decisions.
Your accounting software is an MI tool that gives insight into your financial performance. If, like many businesses, you need to reduce your outgoings, your MI will tell you where you are spending money. Once you know this, you can decide where you can cut costs. Speak to your accountant for ideas on what MI to look at to understand how your business is performing.
Decision-making
Businesses of all sizes generate data. Customer contact details, website traffic, how your customers pay you are all useful data sources that you can use to make business decisions. Take website traffic – if many of your website visitors come from one social media channel, you can direct your marketing efforts towards it and get more customers.
You can also use data to:
- Keep current customers
- Find new ones
- Improve your customer service
- Increase customer insight
Problem-solving
If your business isn’t performing as well as it should be, tracking and reviewing your data will help you identify where the issues are. Maybe your sales figures are down this month. Your data will tell you whether you’re getting fewer sales through your website or your sales team. You can then take action to resolve the issues.
Understanding customers
Data helps you understand who your customers are and how they behave. Information such as where your customers are coming from and the products or communication channels they prefer can be used to increase your sales and revenue.
For example, you can tailor your products and services to what your customers want so that they’ll buy more. If you know who is buying your products, you can adjust your target market and reach more customers with your marketing.
Improving business processes
Data can help you improve the overall efficiency of your business. It gives you oversight into your processes and procedures so you can:
- Identify where you are duplicating work
- Automate routine, manual activities
- Remove unnecessary tasks
- Move work between departments to improve efficiency
- Measure performance
Poor quality data can cost you money
If your data is out of date or inaccurate, it will affect your bottom line. The older the data you’re using is, the higher the chance it will be incorrect. People’s lives change; they move house, get married and change their email addresses. If you’re using five-year-old data, you’re probably not reaching the right people, and you also risk being fined under data protection regulations (GDPR). By keeping your data clean, you will save money by targeting the right people and ensure it’s reliable for decision-making purposes.
Use your data well and it will give you a competitive advantage. You’ll make informed decisions, create more value for your customers and generate higher profits.