Typically, it is gut instinct, influenced by emotion, bias, fear and/or pride that forces us to commit to a choice. A choice that you are not necessarily comfortable with, nor are you confident that it was the right one.
What Are Data-Driven Decisions?
Recently, a client was preparing to launch new creative for a long-running program. Rather than just moving forward with the banner ad they liked better, we worked with them to set up an a/b split test of the two different designs. The second creative, the one they didn’t like as much for aesthetic reasons, outperformed their personal favorite, resulting in a 1.6% higher click through rate.
Data-Driven Decisions Improve Results
Other studies support this finding as well.
Bain & Company found that companies using analytics insights to change the way they operate or improve their products or services are twice as likely to be top-quartile financial performers within their industry
As the data available to you increases, so does your ability to improve your business. You are able to identify challenges and opportunities, and adapt with agility for a sustainable approach to business growth.
How To Make Data-Driven Decisions
1. Understand your goals and objectives
To make data-driven decisions, you must know what it is you are trying to accomplish. It’s like Genichi Taguchi said, “If you cannot measure, you cannot improve.” Having an understanding of what you are trying to achieve and identifying key performance indicators will help you determine what business or marketing activities should be measured, and ultimately, improved.
2. Collect the data
Setting up an infrastructure, like Google Analytics, is key to data collection. After discussing your internal goals and KPIs, you can use Google Analytics to extract the data you want to measure to identify challenges and capitalize on opportunities. Keep in mind that one data point does not give you the information you need. Instead, you must look at multiple points over time.
3. Implement a feedback loop
A feedback loop helps you understand data through qualitative insights. They create a dialogue, or feedback, to show you if your marketing efforts are resulting in positive returns, or just making noise.
4. Use the data to generate insights
Just having the data isn’t enough - you must use it to make the data actionable by generating insights or actionable, data-driven findings that can be used to create value for the business. Many companies struggle to organize data in such a way that insights can be found. But when data is presented correctly, it creates tremendous value for your business.
Understanding The Data So You Can Make Decisions
If you are interested in learning how to integrate data capture and analysis into your decision-making process, give us a call. We help our clients build on their successes and increase profitability through data-driven decision making, and we can help you too.