Today’s leaders recognize the need to leverage data to solve problems, unearth business value and make better decisions. But while you may be swimming in data, you face real challenges in putting it to work, from finding the right data across various (and often siloed) sources to recognizing gaps or errors in data reporting. You may find it difficult working with data practitioners in your effort to gain actionable insights and then accurately interpret and translate those insights for various stakeholders.
The good news is that working through these challenges is definitely worth the effort. Data can help you better understand your clients, demonstrate progress toward business goals, make more informed decisions and improve operational efficiency. These four benefits of data-driven decision-making just might inspire you to get in on the data action.
1. Increase revenue
It’s an old business adage that still rings true: Around 80% of your company’s future revenue will come from just 20% of your existing customers, so finding innovative ways to maximize your opportunities here is critical.
Understanding how to successfully wrangle your data into a useful form can definitely be a boon for your bottom line. For example, it can help you ensure you’re getting the right ads delivered to the right people or increasing your response rate on a promotion while also reducing the number of flyers you send out.
Data also can enhance revenue through experimentation. Intuit grows its revenue and outperforms the market by running hundreds of tests on TurboTax during the 100-day tax season, which optimizes its conversion rates.
2. Reduce costs
Wielding your data to not only drive revenue but also to reduce costs is another achievable goal. Good insights can help provide a big-picture view into multiple areas of your business so you can make smarter decisions.
Take Amazon as an example. An Amazon warehouse in Florida will have different needs than a warehouse in Washington state, and using data helps the company anticipate their customer inventory needs in both locations. It also can help decrease spending on logistics and returns.
3. Create new opportunities
Today’s most sophisticated companies have learned to embrace data to create opportunities through new products. Netflix’s use of predictive analytics helps it thrive via user-driven product development. By using viewing data to create original shows like Stranger Things and Emily in Paris to cater to their desires, the streaming behemoth now rivals traditional TV.
4. Enhance customer experience
One essential way that data can enhance your business is by improving the customer experience—a true win-win. One example is using data to provide customers with relevant product recommendations.
For example, Amazon uses data on a person’s own purchase and search history—as well as the histories of other similar customers—to generate recommendations. Customers about to purchase a product will see suggestions of ancillary products they may want to buy now and will receive future recommendations as well. Customers get useful suggestions, and the business sells more. And while the experience appears natural and tech-driven now, the reality is that it took a business leader to think about how to use the company’s available data to enhance the customer experience in this way.
Study up with our complimentary eBook
The world of data is moving fast, and it’s easy to feel like you’re being left behind. But learning how to partner and effectively collaborate with data professionals throughout the data analysis process can help you truly solve problems, reveal hidden business value and drive decision-making. To position yourself as a data leader in your organization, start by reading “Demystifying Data Projects: A Guide for Business Leaders,” a comprehensive resource for anyone requesting data projects.
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