Harnessing the Power of Data to Grow Your Business

There are a lot of startups these days that have trouble when it comes to business growth. Many of them encounter a couple of common issues that hold them back from reaching their full potential. One of these issues is the inability to harness the power of data. These days, businesses tend to generate a lot of data thanks to all of the cloud services and software packages they use, but it usually sits dormant without being used much at all.

So in this post, we’re going to explain how data can grow your business, and why you should start harnessing it as soon as possible.

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Make better decisions by looking at data first

If you’re running your own business, then you need to embrace the idea of making difficult decisions every now and then. No business is perfect, and you’ll end up in situations where you have multiple options that all seem bad. Nobody likes to make these choices. If we could, we’d love to avoid them so that we can continue running our company by treating it like a normal day. Sadly, that can’t always be the case. Sooner or later, you’ll be tasked with picking between some awful decisions.

But instead of letting your emotions and feelings get in the way of making those decisions, why not just use data?

Data shows us the facts. It gives us an idea of what’s really going on and it’s up to us to interpret that however we want. It could be declining sales for an unpopular product, or it could be an increase in sales during a certain period of time. It might be a reduction in staff happiness, but it could also point to an increase in team engagement. There are so many things that data can tell us, but you need to keep your eyes and ears open to understand the context behind that data.

But if you’re willing to analyze the data before you make any tough decisions, you’ll find that it can be surprisingly easy to make those hard choices. This is because we can rely on data to justify our actions and decisions. We don’t need to consider anyone’s feelings–we can look at it from an objective viewpoint. Some people see this as shirking responsibility, but in reality, it’s all about putting data and objectivity behind your decisions. 

The idea of preparing your business for the future can be daunting to many, especially because you’ll need to make a lot of tough choices later down the line. But if you can start taking an objective approach to making decisions with help from data, then you can avoid the complication of getting your feelings involved. Using your emotions to make decisions can work sometimes, but if you’ve got a goal in mind, then you have to start using objectivity to decide the future of your business.

Getting insights from your customers

Pretty much every business these days uses some kind of customer relationship management software, also known as a CRM. These are basically just software packages that are designed to make communicating with customers a whole lot easier. It generally focuses on recording, organizing, and storing customer data, but can also be used for storing customer communications and even automating marketing and sales strategies.

While many businesses use CRMs for their basic features, there are also a handful of more interesting use cases and possibilities once you start uncovering the more unique features of a CRM. For example, most CRMs actually record a lot of data that can be exported in various different formats. They can also connect with other programs that are capable of reading that data if it’s formatted properly.

The data generated by a CRM can be used to uncover many customer insights, but it can also be used to read through suggestions and feedback. The way your customer interacts with your business can be extremely important. It teaches you a lot of things and it can help you understand what your average customer is thinking when they interact with your business.

It also helps in coding qualitative data Data needs to be sorted correctly in order for it to be useful for your business. If you’re unable to categorize the data generated by your customers, then it’ll make it hard to identify customer trends and patterns. Being able to predict what your customers want or need can often feel like a super power, as if you’re peering into the future and preparing future products and services for your customers. Once you can master the use of data when it comes to building strong customer relationships, you’ll find that it’s a lot easier to make sales.

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Identifying risks and vulnerabilities

Businesses can often encounter a number of different risks–but what exactly does this mean for you? Risk can really depend on the type of business and the industry that it’s in. Some risks can be related to infrastructure, such as identifying vulnerabilities in your online customer portal, or monitoring the price of raw materials and manufacturing costs. Other risks can involve market fluctuations, such as calculating the likelihood that your customers will enjoy your product and buy more of it in the future.

When you start to track data, you’ll realize that you can predict these kinds of risks and vulnerabilities. Data can be very telling, especially if you know what to look for in all of the numbers and graphs. Compiling the data into reports can also make it a lot easier to visualize, and you’ll find that it’s easier to show these reports at meetings or to your team members.

While harnessing your business-generated data isn’t a magical pill that will drastically improve your business, it’s a great starting point because it’s something that you should really be doing already. But if you’re not, then establishing some basic foundational principles and concepts to help you get started can really help you go far in the business world.

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Michael P
Los Angeles based finance writer covering everything from crypto to the markets.

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