Devising business strategies can feel as though you’re sailing the unchartered sea. It’s in your best interest to collect as much information as you can to help you assess your current position and navigate towards your desired trajectory.
With so much big data easily available, the solution is clear: to organise and analyse all the information at your disposal to create a data-driven business strategy based on objective facts. But access to so much data is somewhat of a poisoned chalice. The sheer amount can be daunting, and it’s difficult to know where to start.
First Off: What Is a Data-Driven Business Strategy?
Data-driven business strategies enable businesses to optimise their decisions by analysing big data. For example, you might use data to see where there is a blockage in your sales funnel or supply chain, or you can use data to measure and improve brand sentiment amongst your customers.
Data-driven business strategies remove a fair amount of the guesswork behind what business strategy could most enhance the performance of your business.
Once you’ve implemented your business strategy, you can use data to track the performance of your new model and make changes if you’re not seeing the desired results.
Having data to back up your business strategy also makes it easier to communicate to all management why changes are being made and what tangible improvements you expect to see to help everyone get on board.
5 Stages of Data-Driven Business Strategy
1. Start with a problem you want to solve or a clear vision of your desired business impact
One of the most common mistakes is to dive headfirst into the data and begin organising it before you know what it is you’re looking for. This is an extremely inefficient approach. You’re far better off identifying a problem, creating a hypothesis (or series of hypothesis) and then looking to the data to see if your theory is founded. Take this example,
Problem: We’re getting poor Google review ratings
Hypothesis: Customers may require better customer service, or they may be frustrated by our recent price hike
What does the data tell you?: Our biggest issue is the lack of responsiveness for customer complaints and enquiries.
Data-driven business strategy: Invest in improving customer service through training and/or an improved Customer Relationship Management (CRM) platform. Check in to see if the statistics improve once new models are implemented.
2. Consider all easily and readily available data
Once you have a hypothesis in place, it’s much easier to brainstorm the different metrics that will be useful to help you investigate. Get creative and think outside of the box.
Consider combining sales data, Google analytics, CRM data and social media data to help you find what you need. Different departments use different tools and different software capable of capturing data. Make sure that there is good internal communication and that your business strategists have ease of access to all available data. Ideally, you want to integrate data from different sources into one centralised database to improve efficiency and accuracy.
3. Consider investing in tools to automate the process of sifting through difficult data
Vast amounts of valuable social media data are left untapped solely because qualitative data is more difficult to analyse. Comments and reviews are full of rich information about what your customers are talking about and how they feel about it.
In the past, rudimentary text analysis tools were inaccurate and vague, but the latest generation of sentiment analysis tools uses AI technology and deep learning, vastly improving accuracy and automating the process of analysing qualitative data.
The Symanto Insights Platform is an example of an advanced text analysis tool that can differentiate topics and positive and negative sentiment much more accurately, and can do far more besides. Discover the different personality traits that make up your customer base, find out which communication styles they prefer, and compare your results with those of your competitors all using publicly available data from social media and review sites.
4. Use forecasting software to predict upcoming demand
Optimise your sales funnel by making sure you are prepared to meet the demands of your customers. Demand planning software predict trends based on historical data, can help you plan and manage your inventory and supply chain so that you’re never short on stock or overstocked for that matter.
5. Inform all employees of your new strategy
One of the benefits of data-driven business strategies is that it’s much easier to get all stakeholders on board when you have the statistics to back up your plan. Make sure that all employees are aware of your new mission and are committed to your new data-driven culture.
Making the switch to becoming a data-driven business means that all departments should commit to collect and examine data pertinent to their work, and make that data available to other departments. Initially, this may require training and investment in the appropriate tools to facilitate data analysis and insights, but the advantages of having a clear and objective goal to work towards is more than worth it.
To find out how the Symanto Insights Platform can help your business, get in touch or book a free personalised consultation today.