If there were a competition for the most important business terms of the last decade, data would be a strong contender. From website analytics to sales funnels, data drives the most important elements of sales, marketing, and business intelligence—all of which are vital to helping small businesses thrive.
Still, many small businesses have questions about what data means, why it matters, and how to get started. Here’s a look at 5 easy, approachable data strategies your small business can use to set goals and power positive change.
Data itself isn’t going to help your business succeed. To be useful, data must be calculated, analyzed, and most of all, applied. Once you have a clear idea of the numbers that are working for and against you, you can use this information to make strategic, well-informed decisions.
This is what’s called data analytics. Unlike big data, which deals with massive, complex amounts of information, data analytics can be used to help you understand important information about your business.
Small businesses can use data analytics to learn:
Armed with these data points, small businesses are empowered with the information they need to spend less and sell more.
The first thing to know about data is that it should be used in conjunction with major business goals. What do you want your data to help you achieve?
When you have a clear grasp of your goals, you can set key performance indicators (KPIs) to help you measure the success of those achievements. KPIs are measurable numbers with a target and data source.
Examples of common KPIs include:
KPS can span all major sectors of business, including marketing, sales, operations, customer support, and finances. KPIs are key to applying your data in a way that helps bolster your business across all fronts.
Data can also be used for product intelligence. With the right data, you can understand not only what product to sell, but where to sell it, who to sell it to, and when to launch. To use data for product intelligence, consider what insights you want the data to tell you.
Create a list of questions, such as:
Once you have a clear idea of the questions you have, you can analyze the data to create a more strategic product strategy.
Data cannot be effective unless it’s stored in a single, accessible place. Having a dedicated home for company data ensures that everyone is using the same numbers to make decisions.
Sales and marketing professionals often refer to this as a single source of truth. It’s important to ensure that everyone in your organization agrees on a single place to store information—and has access to it.
It also eliminates data silos, which occurs when only certain people at an organization can access and view data sets. In addition to causing confusion, data silos can lead to forecast inaccuracies, poor collaboration, and wasted resources.
When everyone is looking at the same exact numbers, it’s much easier to work together towards a common goal.
Not all types of data are created equal. And, there’s a million metrics that you can decide to track and follow. It’s important to get clear on what data is important to your business, and why you should pay attention to it. To guide you in this process, the following data types are important when you're starting data analysis for the first time.
Customer data is key for making informed decisions about what your customers prefer—and how you can continue to please them. At a basic level, you’ll want to have contact information, like email and phone numbers. You’ll also want more detailed customer data about the customer journey, which touchpoints they interacted with, how they behave, and how they perceive your brand.
Forecasting data helps you look at past revenue to predict future profits. With forecasting data, you can accurately assess potential revenue and costs, which is important when calculating your yearly expenses. Multiple forecasting methods exist, but the right model for your small business depends on the size of your business and the data you have available.
Your website is a key customer touchpoint. Website analytics can help you understand your traffic, including who’s visiting, how they find you, and how long they’re staying. Additional website analytics data points to consider are your SERP ranking, pages per visit, bounce rate, and email signups.
Business intelligence is data that’s concerned with propelling your company forward. This information is essential for helping you make high-level decisions about your small business, which can help increase visibility, streamline processes, evaluate market positioning, and identify weaknesses.
Another way to get started with data at your small business is to work with a data analysis firm. This can take the pressure off of your organization if you’re unable to manage data in-house; moreover, a data analysis firm can help your company get off the ground with organizing and understanding your data.
No matter what your company sells, creating a data strategy is essential for helping you assess your strengths and power strategic decision-making in the future.