Do you use data to inform your business?
At first glance, the world of data analytics can look mind-bendingly complicated. Depending on what you’re trying to measure or the trends you’re trying to track, you can end up with entire spreadsheets of apparently detailed information – but not know where to start in breaking it down.
Do you keep records of customer feedback? Do you track visits to your website? What about your monthly volumes of sales? Or engagement with your profiles on social media?
Each one of these will generate data, and you’ll probably have access to different platforms in order to access that data – whether that’s keeping an eye on daily, weekly and monthly takings through your accounting software, or checking on-platform analytics suites for your various social media accounts.
The real value in the data isn’t so much the figures themselves, but what those figures tell you. And even an introductory understanding of data analytics can help you unearth some really useful information.
Data analytics – what is it?
Data analytics takes data from a variety of sources, and identifies trends which individuals, businesses and other groups can then use to improve or re-direct their work.
Big corporations like Netflix, McDonald’s, Starbucks and Amazon use the data they gather on customers to create personalised specifications, leading to increased sales and customer engagement. Personalised medtech companies can track user data to make recommendations on health improvements. A manufacturer can use orders over time to track peaks and troughs in demand.
Whatever it’s used for, data analytics boils down to gathering the right numbers, then figuring out what they tell you – and doing something useful with them.
There’s likely already data you gather as part of your day-to-day business. Accounting records, numbers of sales per period of time, customer data and web sales are all types of data. And, properly handled, they could give you some good insights into how your business is working.
So how should you set about doing it?
1 – Where’s your current data coming from?
Take the time to have a quick think – even a small audit – of the sources from which you’re currently getting data. Those mentioned above might be a good place to start, and will give you a decent base where you can start to explore those potential trends that are impacting your business.
2 – What do you want to do with it?
While there’s plenty of sources of data available, not all of it will be useful to you straight away. And you need to be able to decide whether or not you start or continue recording a particular set of numbers.
Think about your business needs and wider strategies. You want data analytics to serve that – it shouldn’t be a distraction from your core plan.
This will also help you to figure out the sorts of data you don’t need. While there’s no such thing as completely useless data, some of it – depending on your goals – is more useful than others. For example, while you might be interested in your daily footfall or physical sales, if you’re going to focus on your online sales, analytics from your website and social media presence will be far more useful.
Figuring out what you want data for will help you stay strategically focused on using it. And thinking about why you have it will make sure it stays relevant to your business needs.
3 – How do you get the data?
As there are effectively limitless types of data, the formats in which you can get your data are fairly varied, too.
Some paid-for software and monitoring suites will give you the option to download or export your data, usually in the form of a spreadsheet. To widen your options even further, you can then take those spreadsheets and put them into something else to help display your data intelligibly (though many platforms will usually have in-house data displays, too – which can save you the hassle of going through it yourself).
It's worth taking some time to research the apps and suites on the market which will help you to gather and display your data. And if you’ve already carried out a data audit, you’ll know what you have access to already – which will save you having to spend twice!
Some platforms are geared to users who are interested in the nitty-gritties of numbers, while others are set up to help tell bigger-picture stories and longer-term trends. You’ll need to think about what you’re interested in doing.
4 – Get it; look at it; use it!
Once you’ve gathered this data, it’s easy to look at all of the spreadsheets and graphs and think “job done”. But its real value to you – the trends and changes it can help to identify and inform – is only just starting to open up.
At the end of the day, the individual bits of data aren’t much use to you on their own and unanalysed. What you need to do now is go through that data and look at where the really interesting trends are.
Do you see more trade at particular times of the year? Or days of the week? Do you get more follow-up and engagement from one social media platform than another? Did you see a big spike or drop in sales at some point last year – and if so, can you think of a reason why it might have changed this year? Did one product or service do far better than any of your others?
These questions, and the answers to them, are where the real value of data analytics lie. Trends and insights like these will help you to spot those bits of your business you ought to be changing – whether that’s to reconsider elements that might not be working, or really focusing on successes which bring in real value through repeat custom or increased sales.
5 – Do it again
Monitoring, getting, analysing and applying data is a loop – not a straight line.
It’s great that you’ve made these first few steps – but to really get value out of it, you need to keep using it.
That’s not a bad thing. It means you can keep identifying and improving things from month-to-month and year-to-year. And the longer time goes on, the more long-term trends you can pick up on.
If you’re interested in learning more about how to grow your business, explore the content in our learning hub, or if you’re looking for business finance, get in touch with us.
