Growing your business in a sustainable way requires an investment of time and effort, but more importantly, it requires studying your environment and drawing on the opportunities you find. A good business is a flexible one that responds to the circumstances around it.
You might think you have a great idea for a new product or service, but you can’t expect the market to respond smoothly and adapt to your company’s offering. Instead of waiting for the market to respond to you, you need to lead your business to adapt and respond to the market.
But before you can respond to market conditions, you need to understand market conditions. That’s where research and data come in. There’s no substitute for concrete numbers and facts from real research when you’re making business decisions.
While some may think big data technology is only accessible or worthwhile for large corporations, small businesses benefit from using business data. A data-driven growth strategy is always going to be better for your company in the long term.
What is Business Data?
Business data refers to any kind of information gathered directly from studying the market, your customers, and your competition. Data has to be something immeasurable and specific, and it reflects how things really are.
You might gather data recording how potential customers respond to your marketing or visit your website, or maybe you gather data that tracks common interests and traits among your own customers or those of a competitor. People today live so much of their lives online, and all of their activities online can be reflected in data.
Of course, simply gathering data alone won’t make a difference for your business. It’s one thing to collect information on your business environment, and it’s another thing to study the data, find trends, and plan actions for your company and brand based on that data.
Using data effectively requires training your staff to be able to work with it. Developing business intelligence for working with data means setting up the data processes and infrastructure to collect data and store it in a manageable and usable form.
If you don’t have the appropriate background yourself, you might get more use out of your data analytics if you bring in a data science professional to make the storage and analysis of data a part of your business’s normal operations.
Learning to efficiently and effectively use data is also complicated because there are many different types of business data!
Types of Business Data
Different types of data tell you different things. Some categories, like customer behavior online, require massive amounts of data to be useful, and then you might also need an expert in data management to sort through it.
Data from individual customer interviews, however, are more qualitative than quantitative. You might get valuable and actionable information from a single interview, but it’s not information that is necessarily or automatically relevant to all other customers.
The type of data determines how it can and should be evaluated and how it should be stored. Here are some of the main types of data you might collect:
Some of the first things you may start collecting data on are your business’s internal structures and processes. Internal data includes specific sales and marketing numbers and fluctuations over time and information about your employees and their efficiency.
Collecting and evaluating this data can help you spot trends and problems and respond before they get out of control. If sales for a certain product are going down with particular demographics, you can adapt and fix the issue.
In evaluating employee data, you might discover ways to improve your productivity or better support your employees. If you don’t know what your company does well or does poorly, you won’t be able to leverage your strengths on the one hand or address your weaknesses on the other.
How does your company measure up to others? Collecting data for benchmarking in business helps you to shift from studying your own operations in isolation to comparing yourself to others.
You research the broader industry you’re involved in and the common standards and procedures. What are the norms for your industry? These may vary widely depending on if a competitor is a big business or another smaller firm, but finding the fundamental benchmarks of quality and efficiency in your field will help you evaluate and improve your own operations.
As you collect data on your industry and examine how other businesses operate, you should zero in on the firms that serve as your biggest competitors. You’re not only gathering data on benchmarks, but you’re also gathering data on exactly what they do so that you can do it better or do it differently.
These competitors might be the businesses that look the most like yours. They are your direct competitors. Collecting data and conducting competitive research on your direct competition is about finding their strengths and weaknesses relative to yours.
However, you’re not trying to imitate their strengths and beat them at their own game. Researching your competitors shows you what makes them special to make yourself special in a different way.
Study your competitors’ marketing, and then use the data sets gathered in this way to inform your own marketing campaigns. What can you do to set yourself apart and target a possibly underserved customer population?
The core of data analytics in business is simply observation. This is the data you get from simply observing customer behavior and interactions with marketing online. What works and what doesn’t? What engages potential customers and brings them closer to a sale?
This kind of customer research is huge if you want to grow a business. You can collect enormous amounts of data and watch in real-time as potential customers respond to your brand and online presence.
This is also where big data technology comes in. Many growing firms use machine learning, a form of artificial intelligence, to gather and process these mountains of data. You can develop a program that will learn as it observes to track and uncover what makes your advertising fail or succeed.
On the other hand, data collection doesn’t need to be complex and software-based. Interviews are a traditional data gathering tool that can still be incredibly valuable for a business.
By conducting in-depth interviews with select customers, you can get a focused look at how that person came to support your brand and why. While a single interview can’t reliably tell you about anything more than one person’s experience, that individual experience can give you so much insight into how your company and brand is perceived.
Evaluating data from interviews can help you more intentionally shape your brand identity and possibly even improve customer service. What made this customer feel supported and cared for, and how can you duplicate that for other customers?
Surveys are another traditional and effective source of customer data. Its value and shortcomings are the opposite of the interview. While an interview goes in deep, the survey works best in gathering short and simple responses. But whereas interviews are necessarily specific, surveys can show you trends and commonalities in customer experiences.
One person might have a uniquely bad experience with your customer support team, or they might have an unusual sense of what your brand represents. Surveys, on the other hand, aren’t as easily argued with. If the survey of a wide range of customers suggests frustration with your customer service, then there is definitely a problem, and you need to do something about it.
Then, the focus group sits somewhere between the survey and the interview in its potential use for data collection.
A focus group essentially functions as a group interview, making the results a little more reliable and generally applicable than in a normal interview. But while an interview may be broadly concerned with your service and brand, a focus group should be concentrated on a particular product or marketing element.
In preparing a focus group, a business should gather a diverse group of people that reflect your desired customer population. Then you can present a product or advertisement and gather data from the group’s responses.
Evaluating focus group data might help you adjust a product or even guide the way you present it in your marketing.
Why is Data in Business Important?
You don’t have to use every data collection tool there is to be successful. In fact, the tools you use should largely be decided by your goals. What kind of data do you need?
The important thing is that you collect and evaluate data one way or another. Business owners need data analytics because that’s how you make informed business decisions. Without data, you’re flying blind, and planning for growth is just guesswork.
Investment in business data pays off because it allows you to respond to your environment and create your own opportunities proactively.