We’ve all heard the great advice to just “go with your gut” before. While there are situations where using your intuition is definitely necessary. It’s important as a business owner to have a healthy balance between using that gut feeling and using data & analytics to help you make well-informed decisions for your business.
Now before you start saying, “Numbers seem daunting and all the tracking and analyzing takes too much time.” Let’s chat about how numbers can be less scary. And how the time spent on data analysis can save you time and resources.
There are many tools out there to help make tracking and collecting important data easier. Depending on what data is important for you and your business, these tools will be different. For example, if you want valuable insights into user behavior on your website, check out these tools:
Or if you’re looking to measure team performance and efficiency, be sure you’re utilizing a project management tool. This will assist with tracking data around completion of important tasks and projects. If you’re not currently using a project management tool, here are a few great ones to check out:
Collecting data doesn’t have to be hard. With the right tools in place, you can easily track and measure what’s necessary for you to be able to make confident decisions for your marketing, operations, and other aspects in your busienss. (And keep in mind that useful data doesn’t always have to be strictly numbers! Think about surveys, market research, and client feedback)
You may be wondering, “Okay, I have all this data but what do I do with it?” Let’s dive into that!
Once you’ve been collecting data, through various tools, research, etc., now it’s time to put it to good use! But how?
First, you want to get your numbers and information organized so it’s easier to understand and analyze. Most tools do a great job of doing this for you. But sometimes there’s a little more filtering and adjusting that’s needed for the information to really be useful for you. If you’re not using a specific tool or that tool’s presentation of the data isn’t working for you. You can always utilize a good spreadsheet to further organize and filter information.
Next, make sure you’re looking at the right information for the decision you’re trying to make. If you’re running digital ads and want to make a decision on if you should invest more money into ad spend. It won’t do you much good to just look at the click-through-rate (CTR) if your main goal is conversions. In this scenario, you would want to look at your conversion rate, average cost per conversion, and average return on ad spend (ROAS) to help guide your decision. This will help you avoid wasting money in your marketing and will drive a more strategic approach and higher return (ROI) on your marketing efforts.
This is the biggest key to making data work for you. Before you dive into the data you have, take a step back to assess what pieces of information will actually provide valuable insights into the decision you’re trying to make.
Making data-driven decisions will keep you from making impulsive decisions that lead to lost revenue, lost resources, or increased stress. Don’t be afraid to step back and fully assess an idea or opportunity before jumping all in. (Why do think companies like Chick-fil-a put so much time and effort into researching a location before beginning the process of building and opening a new Chick-fil-a? It saves them time and money, and it let’s them make wise decisions on where their best opportunity for growth is.)
If you have a great idea for a new product or service in your business, take the time to collect valuable research and information before investing in creating and promoting that new offer. (Trust me, I believe your idea is AMAZING but it will be worth it to get insights from your target audience first. You may just be surprised by what you learn.)
If you’re trying to decide if you should hire another team member, take the time to analyze current team performance and the efficiency of your systems and processes before taking that leap. Identify areas that could be improved or streamlined in your business. Then outline what responsibilities this new hire would take over and how this would positively impact your business before you begin the hiring process. You want to go into the hiring process with clarity on what you need and the role you’re looking to fill.
There is power in “stepping back” and looking at a situation or new opportunity from all angles. And this isn’t to say that the decision making process should always be long – in fact, it’s extremely valuable as an entrepreneur to be able to make quick decisions, but you want to be confident and informed in those decisions.
Implementing data-driven decision making in your business has many benefits, even if you start small. As you begin documenting, tracking, and analyzing key aspects of your business, you’ll experience many benefits such as:
All of these can be summed up into one main benefit: Optimizing your business for growth.
I hope this has managed to show you the benefits of using data in your decision making process and has shed some light on ways you can begin to track and analyze useful information in your business.
If you’re ready to optimize your business for growth and to begin making data-driven decisions in your business, but you’re still unsure how to implement this, then one of my strategy consultations is a great way for me to help you get more comfortable with data-driven decision making! In the consultation, we will dive into the specifics of how to collect data that makes the most sense for your business and I’ll show you how to use the information you collect to help you make informed decisions and set your business up for growth! You can book a strategy consultation with me here.