We are long past the point when it was conceivable to leave crucial business decisions to guesswork and ideas unsupported by any hard data. Most businesses that do not hopelessly lag behind understand the utmost importance of collecting, analyzing, and using every bit of data they can get their hands on. The data-driven approach is fundamentally different from just a data-informed one.
In it, you do not just rely on data when making decisions – data collected from across the organization lies at the center of the decision-making process, allowing for entirely evidence-based solutions to the problems. You have to pay attention to what kind of private network you use, as they provide varying levels of anonymity and security.
If you are particularly wary of letting anybody know your online activity, look for a VPN that can be purchased anonymously, as financial data is one of the easiest ways to track you on the Internet. However, what are the specific effects of such an approach to a business that adopts them? Are the effort and expense really worth it? Let us take a closer look.
1. It Improves The Quality Of Decisions
Companies that do not implement the data-driven approach are at least half-blind when it comes to making decisions, as they operate from incomplete information, basing their decisions on unfounded insights or gut feeling. Once you start to rely on data entirely, you will hardly be able to believe that you somehow managed to achieve any results at all while you had to move around in the dark.
Businesses that have complete information invest in the right infrastructure, specialists, and processes to further improve the efficiency of data use. The more of these processes are implemented, the less time you have to spend looking for the right decisions, and more – generating crucial business insights.
2. It Maximizes The Efficiency Of Your SEO Efforts
Whether you rely on in-house specialists or hire a professional SEO agency like LD SEO, the more data they have access to, the higher the quality of this data, and the more they use it in all aspects of their work, the more reality-based your SEO efforts are. SEO, by definition, is an industry that heavily depends on the technical data you possess about the situation. It means that your performance grows in proportion to the amount and trustworthiness of the data you load into the system.
3. It Enhances Your Lead Generation
The more you know about your leads and prospects, the more likely you are to choose the right approach to them and, consequently, win their hearts and minds. It is done using three primary ways:
- If you know how your potential client behaves, you can prepare more personalized and relevant messages, either automatically or manually (however, the latter is mostly viable if you represent a b2b company). For example, after analyzing the click history of a visitor, you see that he/she seems to be interested in a particular product or service. Knowing this, you can modify your messaging to make this specific product even more attractive;
- If you gather the right information, in the course of time, you will be able to see patterns in your clients’ behavior. It will help you determine the relative efficiency of different marketing efforts. E.g., clients from specific demographics may be particularly responsive to particular messages, or the specific time of day may be the best time to post for your target audience;
- According to Pareto’s principle, 20 percent of efforts generate 80 percent of results. Using the insights received from your data, you will be able to define where to turn your efforts and where they will bring you the most significant revenue.
4. It Increases Workforce Productivity
In the long term, the data-driven approach provides reliable guidelines for building a system of employer-employee relationships that maximize workforce efficiency. First, you analyze the current situation and create a quantitative representation of job performance in different sectors, and then you start analyzing the relative influence of various factors on it. In time, you will be able to single out all the crucial factors that directly or indirectly influence workforce output (e.g., motivation methods, management behaviors, development approaches, and so on).
5. It Maximizes Each Customer’s Lifetime Value
It is common knowledge that retaining an existing customer is easier than winning over a new one. That is why you cannot ignore the work related to improving the lifetime value of all the existing clients. Data is precisely what you need for this purpose. By analyzing the information you have about them, their history, their current behavior, and situations they have to deal with, you can prepare compelling business proposals personalized for each client (however, this primarily affects b2b companies, where such an in-depth approach to each client is more justifiable).
There can be no two opinions on the subject – the data-driven approach to decision-making is the future of business. The question is not whether to adopt it or not – it is whether to adopt it today or tomorrow. The answer is not clear-cut – data-driven solutions are still not that easy to implement, especially for small businesses. However, early adoption may mean greater advantages over the competition.
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