power your advice

The Importance of Data & Information in Business

Written by: Alex Pirouz

When is the last time that you reviewed the status of clients for your business?

More specifically, how many of you could answer the following questions about your clients:

  • How many clients does your business have?
  • How many of these clients are active?
  • What is the value of each of these clients to the business?
  • Which clients have dropped by the wayside?
  • If you can’t answer these questions, then it may be time to consider the reporting systems with your business.

    A common misconception is that “big data” is a resource only available to the world’s largest companies; however, as technology advances and open-source platforms become more prominent, more small and medium-sized businesses are able to harness the power of these large data sets to help them boost their bottom lines.

    It has long been agreed that data is an essential corporate asset, second only to people. In order for your business to maximise the investment in its assets, a structured program of management and maintenance is required.

    The ability to analyze and act on data is increasingly important to businesses. The pace of change requires companies to be able to react quickly to changing demands from customers and environmental conditions. Although prompt action may be required, decisions are increasingly complex as companies compete in a global marketplace.

    To gain a deeper insight and understanding on the importance of data in business, I recently spoke with Eric Holtzclaw, Author of the book: ‘Laddering Works’.

    As Chief Strategist of Laddering Works, Eric partners with C-suite clients to advise them on the development of customer-centric products, services, marketing messages and experiences through the utilization of data.

    “Companies are collecting more data than ever about their customers in an attempt to understand what’s really important to them and in hopes of using that data to gain a competitive edge.

    "The problem with this approach is you shouldn’t collect data for data's sake. By spending time with and truly understanding the motivations of the buyers of your products or services you can determine what’s important to track and what data is an accurate representation of success,” Eric explains.

    The importance of data quality can never be underestimated. Incomplete and inaccurate data will adversely impact all elements of your business. In today’s e- enabled market place growth and diversity is dependent on data quality.

    But having data is merely the first step, you then need to convert those raw facts and statistics into accurate, timely and organized information for a specific purpose to help increase your understanding and decrease uncertainty.

    “Knowing where your going is the first step in getting there”

    Small businesses are major drivers of innovation and account for approximately half the world’s gross domestic product. In addition, they find unique ways to solve complex business problems. SMBs have the opportunity to think outside the box when utilizing big data and analytics solutions to create truly fresh approaches.

    When properly implemented, analytics can be a game changer for small firms, but it’s important that the correct steps are taken to ensure that any solution is tailored to suit their customer’s unique needs.

    Here are a few pointers from Eric to help you get started:

    1 – Patterns Are Only a Starting Point: Too many companies that I work with start and end with a pattern that they see in their data: a page that is converting well, a drop in overall sales, or an increase in customer complaints. They jump to conclusions about what the patterns mean before they have enough information. Before you do that, step back and make sure you really know why.

    2 – Strive to Understand Why: The only way to truly understand a pattern is to ask your customers. These conversations should be in person and one on one, which let’s you ask follow-up questions and make sure you are not making incorrect assumptions.

    3 – Start Broadly: In order to do this successfully, you need to start your conversations broadly. Get to know your customer and what they do and care about outside of your business. This approach lets you understand how your products or services fit into the rest of your customer’s life.

    4 – Stop When You See Patterns: Done correctly, you will see patterns in the conversations after about 18 interviews. This first-hand customer knowledge becomes the lens you need to unlock the patterns in your data.

    5 – Create Meaningful Move Forward Metrics: An important aspect of creating a successful product or service is to make sure your metrics mean something. Use the new knowledge you have of your customers to decide on meaningful metrics and create useful reports that will drive your business to success.

    Data, big or small, is essential for every business.