Wondering how?
The advancement in technology is enabling us to measure, track, and analyze information on a whole new scale, and the importance of ‘data’ is growing bigger and louder every day.
However, for many small to medium-sized enterprise (SME) owners, the data enthusiasm is overwhelming them by raising more questions than giving answers. The questions are like – where do I look for data? How do I make it work for me? and, where do I start? Let’s try and answer these questions.
What does ‘data’ mean
Data is known facts. It is the information that can be used to observe or understand something. For a business, it could be information about its customers, about its operations, about its inventory, in short, its information about anything that impacts the business.
Depending on the nature of the business this data could be incredibly broad. Let’s take a simple example of a chain of retail stores. The data could be about purchase and sales from each of the stores, their inventory or stocks, information about their customers’ purchase patterns, and data tracked through web analytics for their website, etc.
How to collect data about the business
Do you remember those days when staff would physically hold clipboards and observe customers and make notes? That’s gone. Technology has completely transformed collecting data and measuring almost everything that a business is involved in.
There are multiple sources where the data can come from depending on the appetite to collect data, its cost, and the ultimate objective for which the data is being collected. Just to list a few, data can come through:
- online customer surveys,
- tracking visitor behavior on the website – their time spent on a page, how they navigate through the site, their exit pattern, and so on,
- asking a third party to research or collect data may be about existing and potential customers, market, competition, etc.
- tracking sales data to understand buying patterns and stocks to optimize the costs.
- tracking social media platforms to assess customer sentiments about a product or a brand.
There is so much that one can track but the key is to focus on the things that matter than collecting everything that’s possible. The reason is collecting or having access to data is only one part of the puzzle. The other part is understanding it and acting on it. Data is just the raw material in the entire analysis process.
That is why not every company that has access to data is successful. The companies who have taken data to the next level to derive insights from it and to take effective decisions have gained great outcomes from it. Amazon is a good example that has leveraged data to refine its customer experience, retain existing customers as well as attract new customers. Every decision is so much driven by data captured through their system.
How to get the maximum value out of this data?
Data can have a significantly positive impact on every area of a business provided it is analyzed properly. The value or benefits can come in two stages, first is a better understanding of the business (benchmarking current performance levels) and the second stage is improving performance which is either lower the costs or offer more for the same cost be it a product or a service.
Let’s take the same example of a chain of retail shops and see how these two stages could look like –
A better understanding of the business by
- Tracking sales and inventory to understand ways to minimize storage and handling cost.
- Tracking customer buying patterns to understand demand variation to optimize purchasing.
- Tracking customer check-in and check-out to understand staff requirements for off-peak and peak time.
Improving business performance to
- Reduce working capital by automating purchase orders based on tacking of sales and inventory
- Improve revenue by cross-selling and up-selling through attractive sales offer based on customer buying pattern
- Improve customer experience by optimizing staff at stores to reduce check-out time with more in-store time.
Conclusion
Data is not new. It has always been a part of businesses and their decision-making process but the nature, the scale, and the way of capturing and handling data have changed. The advancement in technology is coming in handy to capture and consume the data at a much affordable cost than in the past.
Obviously, this change has made more and more businesses use data to make informed decisions in almost every business situation, so true even for a small retail shop. On the other side, those who have not embraced this change yet would soon start feeling left behind against their competition, and certainly, you wouldn’t want to be one of those.
So, let the ‘Data Genie’ out of the bottle help you with achieving your ultimate business goals!!