“The thought without backed-up data is just an opinion.”
Data is the root of business processing. In the market race, where the contemporaries are waiting for one miss of its competitor, making well-informed decisions becomes a must.
Looking at the facts where 90% of the organization states the data-driven decisions to be the reason for their success, only 7% of them are fully-equipped with data processing and analytical tools.
As most of the brick and mortar organizations follow their gut for decision making and business operations, the need for a shift to data-driven decisions is what can help the contemporary business marketers to rule the industry.
So let’s first know what these data-driven organizations are?
Being a data-driven company is not just all about installing heavy analytical tools, but adopting these analytics into company culture and processes and implementing it in the business strategies.
A data-driven company is the one that has a mindset where each decision and business action are based on facts and reports. Here the data is collected from different business aspects like past results, market analysis, competitors’ failures. The employees at different levels are guided to make the right use of data when the right time prevails.
Moving further let’s look at the success ratio of adopting such data-driven approaches for the business
The success of some data-driven organization
Every business starts from small, but it’s their perception and actions which help them transform from an idea to the brand. Looking at some of these examples,
Amazon, the big brand that started as a bookseller in 1990, used the data-driven approach and is now the biggest retailer online.
Google and Facebook have based its foundation and are running successfully, as they make the right use of their collected data to result in some successful business strategies
Netflix, a media company with thousands of competitors, is now ruling the industry with the highest market value.
Dominos, a small pizza branch started with stock value 3$, has turned itself into an e-commerce powerhouse and the largest pizza brand around the globe.
These big names use a data-driven decision-making process for each of their business operations and are ensuring success and profitability.
Getting deep down inside the data-driven approach, below are some reasons why these companies are running successfully.
How a data-driven approach benefits businesses to generate revenue?
● Points loopholes in the business plans
Having a list of things that went well for your business and while also knowing what you are not good at gives you an idea where you are leading your organization.
To recognize the right path of business, a business owner needs to overview the journey to understand the right process. As there are various sources from where the data is generated, a well-structured analysis will help the business owner understand his past mistakes, work on the areas that need improvement, and use any of the business weaknesses that popped out after analyses to convert it into the business strength.
This data can also help the business to predict the crisis to prepare the business for the worst.
● Implies consistent improvement
Most successful businesses have a policy of getting feedback from the customer about their product and services. This data over time acts as a great source of information where a company could analyze this feedback to know what their customers like and don’t like.
This information helps to understand whether a company is achieving the goals of satisfying their customers or not. Understanding their pain points, it becomes easy to upgrade, redevelop a service in a way that can help their customer get exactly what they are looking for.
Like if we look at Amazon and Facebook’s algorithm, they have machine learning algorithms installed in their companies that help them recommend their customers exactly what they are looking for.
● Helps create a base for decision making
Decision making is a crucial process in a business. One wrong step and the tables get turned to a disastrous situation. The decisions made by gut might have fear of getting wrong, but when the same gut is backed by a data-driven decision can bring certain confidence in the organization leader and also increases the chances of success.
Along with improving the decision process, the study of facts and data increases the pace at which the decisions are made. Being well-aware of each aspect of business can help the business owner get prepared for the uncertain situation which has never arrived in the past, this data can help to analyze the pattern that could act as a solution to the problem that arose in front of the business owner.
● No space for uncertainty
To run a business successfully, having a one-sort clear mind is very important. A business owner, as well as his team, should be very clear about what they are doing and why. Once the purpose and the end results of the organization are clear, the chances that the generated product would turn out to be more efficient and smarter than expected.
Analyzing the past data will help the business planner gain this clarity with his team to make sure the past mistakes are not repeated and also highlight the areas of improvement in front of them. This also helps them acknowledge the investments in terms of money and time required by the team members and the number of resources that are used and can be required to take the business further.
This data gives clarity, why things are happening in the organization, and what each one needs to do to achieve the needed.
● Boost team morale
Yes, this is a very undervalued factor that the data-driven approach has a great effect on team bonds and has the ability to boost team morale. Creating a data-driven company culture means your team is well trained to analyze and study the deeper data before performing any business operation.
Here the team will be skilled enough to understand why certain decisions are made and how the collected data have derived a fruitful conclusion to work in a way that fills the missing gaps. Cultivating such work culture will reduce the pressure at every level, from the leaders to the lower level workers to know how the organization functions to improve team spirit.
There is no secret that data plays an immense role in improving the overall performance of a company. From developing reformed business strategies to increase business longevity and consistency, data plays a crucial role in molding business in the industry.
Data-driven organizations utilize this power of data into their decision-making process to help the leaders make some fact-based decisions.
This data analysis helps improve the business form customer feedback and helps gain clarity among the business workers about the direction they are heading towards.
Developing a data-driven culture in the company would help reduce the cost of operation as the business planners are well aware of their mistakes to avoid them in the future and lead the business towards a smooth success.
James Vargas is an experienced business expert, consultant, and manager at Get Everything Delivered, startup consulting and team building services. He has 1.5-decade corporate experience and is tailoring the best project delivery and team training practices to the businesses and startups to generate great revenue for their business.