Many companies have been forced to rethink how they run their business this year. How that thinking is done and what resources are called on to make subsequent decisions is a key determinant of success.
In an increasingly digital business world the most prevalent, informative and powerful resource is data. Most businesses generate more data than they could possibly use. Learning what data is available, what can be generated and what questions to ask of it is the key to more informed and effective business decisions.
This is called building data literacy – the critical ability to derive meaningful insights from data and apply it in a way that benefits your organisation.1 Increasing data literacy across an organisation, and in its leaders in particular, will help accelerate an organisation’s path to more effective business decisions.
Getting the most from the data
Professional services firm Deloitte says it’s important to have the right analytics tools and technologies in place when an organisation engages more with its data. “Invest in tools that fit now and that will be flexible and powerful enough to grow with the organisation,” it says in its report Building you data analytics capabilities.2
The next step is to ask smart questions that will provide actionable insights.
Those questions will be guided by the business’ strategy and could look like ‘What are our customers telling us? How do we measure up against our goals and against the competition? Where are costs exceeding return? Does that proposed new market or product meet our demographic and revenue criteria?
Customer-generated data can provide invaluable insights for any business, says Kate Morris, founder of Adore Beauty, a pioneer in retailing beauty products online in Australia.
She says digital businesses have access to many data points that provide valuable information about the customer. “In most cases you’ll have more data than you could ever hope to use. There’s almost always data points that are easy to isolate. The key is to pick the pain points that are affecting the highest number of customers,” Morris says.
Data can identify why and how a customer uses an app and where on their journey they most commonly get stuck. Do they want different products, different delivery options or a smoother payment process? Using this data allows a company to position its products more appropriately, and helps retain and attract customers.
Euromonitor is an independent strategic market research group that has analysed the process of using data to make business decisions. In its report 8 Ways to Identify Market Opportunities for Business Growth3 it discusses ways to take an even deeper dive into customer analytics and the market in which a business operates.
If a business is looking to invest or grow, it says customer segmentation can identify market opportunities. For instance, does the proposed location and market reach the target demographic?
Market and competitors’ data can help determine which brands and products are growing in a given industry and why. Businesses can then ask ‘How is our company placed? Do we have a competitive advantage? Is there an acquisition opportunity?’
Data can also be used to analyse complementary products or services that can boost revenue or increase product and service offerings. Euromonitor cites the example of a packaging company: by identifying and monitoring the sales of products it doesn’t currently package the company can determine if there’s an opportunity for it to package those products, particularly if their sales are rising.
What’s happening in your business?
Having a comprehensive understanding of your company’s financial position makes decision-making more effective. This goes for the board of an ASX-listed company or a small family-run business.
A tool such as CommBank’s Daily IQ can be used by businesses to give them timely insights about their business, based on transaction data.
Daily IQ offers a suite of tools, each displaying a dashboard of easy-to-read data that allows businesses and organisations to see trends and changes over time, identify opportunities and validate actions the business takes.
The Cash Flow tool is the most frequently used by businesses. It helps business better understand their cash position and provides year-on-year comparisons, enabling them to optimise their cash flow.
The Busiest Times tool provides a heat map illustration showing the busiest times of the day based on sales, helping to inform things like rostering and stock.
Using data derived from card transactions Daily IQ also provides insights on customer demographics, location and spending patterns which can help businesses better target their marketing or identify potential new business locations.
Daily IQ is available for free to qualifying CommBank customers. You’ll find more information here.