As we start the year, many of you will be faced with making decisions. McKinsey has conducted global studies to understand how companies make decisions, what decisions they need to make, and the best practices around decision making. They have learned that the majority of decisions are made outside the annual planning process and that most decisions are tied to growth and value creation. In fact KPMG declares that “growth is usually one of the top agenda items for CEOs.”
Our guts can be helpful, but it’s far more powerful to make a decision that includes actual numbers and information. While good data won’t guarantee good decisions, it’s nearly impossible to make good decisions without it. We’re all familiar with the quote attributed to Edward Demming: “in God we trust, all others bring data.”
Data is the Key Component for Good Decisions
Regardless of your organization’s size, you make business decisions every day, such as which customers to pursue and how to retain existing customers. We have found that businesses tend to need data to help address four primary categories:
- Understand customers and the market. According to Business Insider, one of the areas that all businesses can improve is to channel performance. With analytics you can analyze which channels are best connecting with customers. You can also use analytics to select customer segments, determine customer buying criteria and supplier preferences, etc.
- Solve problems. For example, let’s say you completed launching a new product critical to your long-term success. The adoption rate is falling below expectations. How do you pinpoint why and decide what to do? By tracking and analyzing the data associated with the launch, you can better understand what went well, where breakdowns occurred, and what steps are needed to get back on track.
- See performance. For example, you implement a variety of marketing campaigns to increase the footprint of your products within your existing customer base. Analysis will help you understand which campaigns are producing results better and faster and at what level of investment. You can then decide which efforts to expand, terminate or modify.
- Improve processes. Resources are precious and limited. There’s not much wiggle-room for waste. Business efficiency consultant Marina Martin states, “Inefficiencies cost many companies anywhere from 20-30% of their revenue each year.” Imagine what your company could achieve with 20% more funds to allocate toward innovation and growth. To make strong and effective decisions, both data and outreach efforts are essential.
How Analytics Matter in the Decision Making Process
Although complex, business leaders depend on the insights derived from a growing volume of data that flows at an increasingly faster rate to make strategic decisions. Companies perform analytics on this data to generate insights needed to inform fact-based decision making. Analytics enables your company to identify new opportunities for innovation, market expansion and customer service that will boost revenue, increase profits, improve customer lifetime value. A PwC study reveals that while business leaders “are sold on the power of data and analytics to deliver insight into key questions they need to answer,” 61% of these study participants say their companies’ decision-making is only somewhat or rarely data-driven.
Data exists everywhere across your organization. When it comes to growth, a key player on your team is your Marketing team. Marketers utilize data to determine which materials and assets, such as content, messaging, and positioning should be brought into play, as well as how and when they should be distributed through channels, influencers, and partners. It is essential that your Marketers understand how to use data to synch your content to your customer’s buying process. Your Marketing organization’s ability to effectively impact customer acquisition and retention requires strong data onboarding capabilities.
While a great deal of data can be captured from digital platforms, marketing automation systems, customer relationship management systems, and other technology, there is still the need to reach out and connect directly with customers to gather competitive market intelligence.
Four foundational initiatives that support this type of intelligence include:
- Customer and Technical Advisory Boards
- Market and Customer Segmentation
- Persona Development
- Customer Journey and Experience Mapping
Many of these efforts take good old-fashioned market research.
Whether your company could benefit from one or all of the foundational initiatives listed above, we’re here to help. In the meantime, learn more about using analytics and deriving insights from data in our white paper Intuition To Wisdom: Transforming Data Into Models and Actionable Insights.