Data has become as essential as oil in the business world. Most people understand data is extremely valuable, but not everyone knows how to take raw data and refine it into useful business information.
In Douglas Adams’ book Hitchhiker’s Guide to the Galaxy, a computer is asked to define the meaning of life, and the computer eventually provides an answer of simply 42. The computer presented an answer, but no one understood it. While Hitchhiker’s Guide to the Galaxy is science fiction, this scene bears a resemblance to how many people view data in real life.
Unless you are able to turn data into valuable information, the data might as well be random numbers. By using various data management processes, your business can extract impactful insights from data.
When most people think of businesses using data, they picture massive companies collecting incredible amounts of data, but in reality, a business of any size can effectively utilize data. Small and medium-sized businesses can use the same data management processes as large companies but on an appropriate scale.
Basic Data Management
If your company is interested in using data to gain new information, you must understand the amount of continuous work that data management requires. Data management must be a high priority and not a minor project if your company is going to gain anything useful.
Collected data must be monitored, managed, and protected to ensure the data’s integrity is never compromised. Compromised data is useless and potentially harmful, as taking action based on inaccurate or misleading data can result in costly mistakes.
However, when data is properly managed, it can provide a business with invaluable information and insights.
Better Understand Your Customers
Understanding your customers is one of the key components in creating a successful business. Data analysis can help a business understand what their customers need and want, which can lead to better sales and happier customers.
Businesses collect customer information through surveys, accounts, cookies, social media, purchase history, and many other methods. The more data a business has on its customers, the more complete their customer profiles become.
Collecting customer data like customer preferences and demographic information allows businesses to develop a better understanding of their customers and how to best serve them.
For example, knowing where your customers live allows your business to send targeted marketing that suits each customer’s location.
If data has shown you a customer lives in a cold climate, then you can send targeted ads that feature cold weather clothing to that customer. Pairing the ads you send a customer to their data profile makes the ad more effective and increases the odds of the customer converting.
Data allows a business to evaluate the performance of a product, marketing campaign, employee, or any measurable change. Basic sales data will tell you what products are performing the best, but data analysis can go much deeper to provide highly specific insights.
For example, with data analysis, you can track and compare the performance of two content posts. Looking at the number of views, comments, likes, and shares a post receives and comparing two related posts lets a business see what content is better received by customers.
Once you use data to identify a successful action, you can use elements of the successful action in other areas to spread the positive effects. Data analysis can also show a business their mistakes and highlight actions that did not work so they can be avoided in the future.
More Efficient and Informed Expenditure of Resources
As noted above, data analysis allows a business to see what works and what doesn’t. This lets a business consciously decide to spend resources where they will be the most effective. If a marketing campaign fails, then data analysis can help a business determine why it failed and prevent the business from wasting resources attempting the same campaign errors again.
Data can also reinforce decisions by proving why a piece of content, for example, was successful which lets a business know if they can safely spend resources repeating that content style.
Combining data analysis with automation allows a business to take the monotonous task of filtering through massive data sets off the shoulders of a human employee and give the task to a machine.
Instead of investing in an employee to read through data line-by-line, let the power of automation, algorithms, and sophisticated software pull the relevant data.
Allowing automation to parse the relevant data frees up human employees to work on other projects that cannot be completed by a computer.
Data can reveal invaluable information for a business of any size. By collecting and analyzing data, a business can better understand its customers, determine the reasons behind successes and failures and intelligently spend resources where they will be the most effective.