Opinions expressed by Entrepreneur contributors are their own.
Companies are looking to data analytics to help them make better decisions, and those that aren’t quickly falling behind.
You’ve seen the recent headlines of some of the biggest brands in the world losing steam: Peloton, Netflix and Zoom, to name a few. They were all consumer favorites last year, but are now seemingly out-of-touch with their same audiences.
Each failed to deliver on expectations set on consumer adoption, and their stock prices have been in tumble mode since. Data can be a preventative and prescriptive tool to keep up with consumer demands and help deliver their evolving expectations.
If you want to revolutionize your business, you need to become a data-driven business. That means incorporating data into every aspect of your operations, from marketing to product development to customer service.
To be successful in today’s business environment and tomorrow’s digital world, organizations must treat data with respect. Data is used by leading businesses to make informed decisions, and 91% of companies say that data-driven decision-making is essential to their business.
But what does it take to become a data-driven business? Here are some tips to get you started.
Design a data-driven culture
Businesses need to foster a data-driven culture. But what does that culture look like? A data-driven culture is one in which data is a part of decision-making, not an afterthought. Guessing where strengths and weaknesses are across the organization is replaced with factual information provided by data.
Data is at the center of strategy when companies have a data-driven culture, from streamlining operations to pricing.
How can companies design a data-driven culture? Here are a few ways to keep in mind:
- Educate teams (especially the C-Suite) on the importance of how data can be used and the insights it provides.
- Show how data solves critical problems across the organization.
- Use data to make teams more efficient and to track improvements.
Businesses will need to be patient. Creating a data-driven culture doesn’t happen overnight. There should be tools, processes and a genuine desire to learn (since data is just information) to support this cultural evolution.
It’ll take an investment in data collection and tools to gain information before a new culture can take root. Then there needs to be an equal investment of time to make sure teams are trained to use it.
Related: How to Use Real-Time Data to Fine-Tune Your Business Decisions
Develop a data-driven marketing strategy
Data-driven marketing is key to driving revenue growth. Implementing a data-driven marketing plan can help businesses turn customer insights into action and increase profits.
How can companies develop a data-driven marketing strategy? Here are a couple of steps used by leading teams:
- Identify where target audiences are – offline and online – and their preferences for browsing, engagement and conversion.
- Discover and segment audiences to differentiate customers, prospects and window-shoppers.
- Create content based on audience interests and clicks to build trust and increase sales.
Businesses that rely on data-driven marketing can make more informed decisions, which leads to better results.
Rather than relying on intuition, data-driven marketing relies on real-world evidence. Data can help businesses track what is and isn’t working, making it easier to optimize their campaigns and go-to-market strategies.
Related: 8 Ways Data Analytics Can Revolutionize Your Business
Create data-driven customer experiences
To create data-driven customer experiences, businesses must first understand what data they need to gather about their customers and how companies can use data to improve customer interactions.
A basic rule of thumb: Do not gather data you can not use.
How can companies create data-driven customer experiences? Here are some common ways where data is applied:
- Providing real-time product recommendations and advice to customers throughout their buying journey.
- Eliminating wasted ad spend by not showing ads for products that customers have already purchased or are not interested in.
- Personalizing engagement from the entry point to enhance their experience and increases the likeliness to convert.
Data is available to answer questions, so businesses should not overwhelm themselves with information that they do not need. For example, if a company wants to design better customer experiences at the individual level, identify what questions about individuals need to be answered to deliver those experiences instead of just learning everything about them.
By understanding data and using it to improve customer experiences, businesses can create a competitive advantage for themselves. Better customer experiences can result in higher customer satisfaction and loyalty and increased sales and profits.
Related: Here Are The Benefits of Data-Driven Decision Making
Build data-driven products
Businesses that listen to what data tells them can create products that the market wants.
Data will reveal what products customers are most interested in, and those insights can be used by businesses to package products and make recommendations that increase sales.
Here are a couple of keys to an effective strategy for building the right products powered by data:
- Listen to market interests, trends, patterns and behaviors to know what topics are of interest.
- Monitor what channels and devices that audiences are using to search, browse, and convert since they change often and will need optimizing.
- Democratize data across the organization so teams have the data they need access to and can make informed decisions.
Data can lead the product roadmap. Creating data-driven products requires businesses to have a strong understanding of their data as a prerequisite. In addition, they need the ability to collect, clean, connect and analyze data effectively.
Becoming a data-driven business requires a commitment to using data. It’s not enough to collect data – companies need to use it to improve experiences across the organization. This commitment can be difficult, but it’s necessary if businesses want to stay competitive.