3 Ways Data Will Transform Your Business
Data will change everything.
The speed at which we’re creating data is often written about because it is mind-boggling. I’ll mention it here again: "more data has been created in the last two years than in all of history."
That was written in 2015.
Just let that sit for a moment.
And it isn’t slowing down. What is all this data for? The answer to that is already becoming apparent.
Data is information and information is power.
The biggest and most powerful companies in the world are those that collect the most data and monetise it most effectively (Google, Facebook) or those that control the platforms that connect data aggregators and data creators (Apple, Alibaba).
For most businesses though, data is still a ‘nice to have’ because it’s not clear exactly how it connects to growth and to the profit line.
The fact is that along with how much data we collect we’ve improved the tools that collect it. This means that the information you can now get and the things it can tell you can transform your business.
Here are just three examples on how it can do that.
1. Base Your Product Development On Data Insights
Product development often works like a weathervane: let’s try this, if that doesn’t work, let’s pivot and try something else. But it doesn’t have to. If your business has the right kind of analytics framework in place, product development can be data-led.
The only caveat here is that the analytics platform needs to be implemented in a way that tracks metrics that are important, and not all the others. If you track everything it's very hard to separate the signal from the noise.
2. Lose Fewer Customers, Get More Email Addresses
Ever wonder why people leave your website? According to Sumo Me, an average website conversion rate from visitor to email is 1.95 per cent. That means 98 out of 100 people will visit a website and disappear without leaving even a calling card.
The average proves our assumption: data is not being used effectively by the vast majority of businesses with a digital shopfront.
User-based analytics, event tracking, funnels, heat maps, A/B testing – all of these tools can help businesses understand why people are leaving and convince them to stay. Once again, the tools must be set up in a way that supports business objectives rather than collect data for the sake of it.
3. Watch Your CPA Plummet
Data can save you money by decreasing your CPA, or Cost Per Acquisition. A saving that will directly impact your bottom line.
If your marketing analytics is working as it should, you should be constantly optimising your channel/audience/product fit.
Part of that is understanding how channel analytics (e.g. Facebook, Outbrain, Twitter, Plista) compare to third-party analytics and why there is a difference.
Once you do, and once you find the right channel, the right reporting metrics, and the right audience for your product, your CPA will plummet. This means that with the same marketing budget, you will now acquire more users, and that you can now sell less per user to maintain the same margins.
(You can also increase your revenue per customer, and that’s a data led initiative yet again).
These are just three examples. Data can transform your expenditure, your product development trajectory, and the pace of your user growth.
It’s there for the taking but if it were easy, everyone would be doing it.
It sounds easy but effective data collection and analysis is not everyone's strength. The biggest challenges are in establishing the right analytics framework and in separating the signal from the noise. For that, you may need to call in the experts.
About the author: Alex is the Head of Growth at DataMuse, a data analytics and strategy consultancy that specialises in monetising data and growing data ROI. The founding team have 25 years combined experience in strategy, growth, and data analytics. Alex holds a BA from Yale University and an MBA from the University of Cambridge.