Data analytics at its core is using data to solve problems and make decisions. Some notable business improvements from data analytics include higher revenues, greater profits, lower costs, improving marketing efforts, and higher customer retention and satisfaction. Small businesses often think of data analytics in terms of big data and do not think it is something they can afford or use. But every business has data that can be analyzed.
Whether it is generated through accounting software, customer relationship management (CRM) systems, social media accounts or even excel spreadsheets, there is data being collected. We can use this data to find what is happening and why.
The first step is to find the meaningful data necessary to help drive growth. This involves becoming a data-driven organization, one that thinks in terms of what data is currently being tracked, how it can be measured and compared, and what data is most important. For example, a majority of costs for a small business in the service industry will come from payroll expenses. Data on employee efficiency is key to becoming a more efficient and profitable organization.
Questions to Ask
When reviewing the data, it’s important to know the specific problems you’re trying to solve.
- Is it client retention and satisfaction?
- Is it growth in sales from bringing in new business?
- Is it maximizing marketing efforts?
- Is it reducing costs and becoming a more efficient organization to be able to use resources for research and development?
There are many different pathways to growing your business, and it all starts with the problems that need to be solved. Identifying weaknesses, inefficiencies or complications will help set goals and make decisions to achieve them. Data analytics look to provide evidence, or proof, of what is happening. When we can find the what, we are no longer relying on instincts. We have the facts and are able to act on them.
The data shows the what; the insights and improvements are driven by the why. We can use visuals to better understand the what, see the trends and patterns and identify areas of weakness or concern. Finding why trends and patterns are occurring, and why there is an area of weakness, will provoke deeper thought and understanding. When something is underperforming, can we find the why? If something is overperforming, can we find the why? By having a better understanding of that information, we can make decisive plans of actions and track the progress after implementation.
If a plan worked, why did it work and how can we use that methodology across different areas within the organization? If a plan did not work, why wasn’t it successful, and how can we improve? We want the data to tell us the story of what is happening and why so that we can continually improve and achieve our goals.
The data are the facts, the results of the situations at hand. The data have no biases and no opinions. Use the data to make informed decisions. See the impact of these decisions, and work to improve the results.