Wednesday, February 17, 2021 / 08:30AM / By FCMB Business Zone / Header Image Credit: Northeastern University
We are in a digital world where DATA is referred to as "the new oil" because of its economic power; just as OIL was in the industrial age. With data, business owners can now make more informed decisions regarding their customers, processes, platforms and people. The ability to collect, process and analyse data effectively is one of the reasons big tech companies like Google, Facebook, Amazon, Apple and Microsoft continue to thrive in today's world. Similarly, small and medium scale enterprises are beginning to understand and appreciate the use of data for product development, customer management, financial management and more, to improve their service delivery, reduce inefficiencies and attract new customers.
Data is simply any information that can be translated into a machine-readable form. As a small business owner, you should not assume that making decision using data is only applicable to large organisations, rather you should embrace and incorporate the collection, processing and application of data driven insights in your business process in order to ensure you develop strategies and activities that benefit the business while gaining an edge over your competition.
Some data types available to small businesses include customer data, employee data, transaction data, web, and social media data, etc. With data, it is easier to know what works and what does not as a business owner. Thus, it is important to collect data no matter how minute it seems.
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In this article, we discuss some data types and give tips regarding how they can be tracked and used in making decisions.
This includes all personal, behavioral and demographic information about the people and businesses you serve. Customer data is essential to understand your customers' expectations and how your business can meet them. This data can be collected through your website, email, SMS, social media platforms, surveys, sign up forms or one-on-one interaction on call or in person.
It is not enough to collect these data, it should be stored and processed using customer relationship management tools such as hubspot, Zoho or Salesforce which have features for lead tracking and management, sales forecasting, email marketing and integration with other tools. Analytical tools such as google analytics and social media analytics are also easy-to-use tools that can be adopted to improve and optimize online marketing initiatives.
Some of the insights you can gather from processing these data include how often purchases are made using a particular channel e.g. social media; the days and time you get more sales; the persona of customers that purchase from you the most; the products / brands they buy the most; their interests; the devices they use; their location, etc.
With these insights you can target your message appropriately to the channels that work, develop products that meets the needs of the demography type that purchase from you the most and introduce attractive offers on the days or time you have the most visits to your platform.
This include information related to monetary transactions within your business. This information is often seen in the financial statements of an organization, that is the balance sheet, profit and loss or cash flow statement. For every business owner, analysing this data helps to understand the revenue and cost drivers of your business. In addition, it helps to plan adequately and answer salient questions that can help gain insight into specific areas of the business.
For instance, you can ascertain the products or line of business that generate the highest sales, the impact of marketing expenses on sales, and budget / plan ahead for future expenses such as the purchase of new assets or expansion into other business ventures. In addition, information in the balance sheet helps to determine liquidity, solvency and the future viability of the business continuing operations.
This refers to all employee related information collected by any business. It includes but is not limited to personal information about employees as well as information about their work performance. Insights from employee data enable business owners effectively manage the hiring and talent management processes of the business.
Some other advantages of employee data include the measurement of training initiatives on productivity, the alignment of employee behaviour with the business' goals and objectives, and the assessment of factors that result in high turnover or retention with the business. Overall, it is important to understand the needs of your employees in order to ensure they are productive and work towards the achievement of the business objectives.
To effectively, track and make informed decisions using data you need to:
1. Have specific objectives you want to achieve and the questions you want answered.
2. Ascertain the type of data you need to collect.
3. Identify the sources of the data you need and the tools needed to collect them.
4. Adopt management tools that can enable you store and analyse the data collected.
5. Take action based on the insights gained from the data analysed.
6. Monitor actions taken and ensure continuity in the use of data by ensuring you and your employees get trained where necessary.
Like Andrew Chen, ex-Head of Rider Growth at Uber said "It's important to leverage data the same way, whether it's a strategic or tactical issue: Have a vision for what you are trying to do. Use data to validate and help you navigate that vision, and map it down into small enough pieces where you can begin to execute in a data-informed way. Don't let shallow analysis of data that happens to be cheap/easy/fast to collect nudge you off-course in your entrepreneurial pursuits."
While it is important to collect data and leverage on them to make informed decisions, it is also critical to ensure compliance with all data protection and governance regulations to avoid sanctions which can be detrimental for your business. You should also ensure to keep yourself and your team abreast of information and data security threats while ensuring to have in place measures to help mitigate these risks.
Credit: This post first appeared on FCMB Business Zone HERE
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