I'm sure that you've heard that information is the new currency. In order to get to information you need to collect data and our world is overrun by it.
By 2020, new information generated per second for every human being reached 1.7 megabytes. Considering there are over 7.7 billion people on the planet, the amount of new information is equivalent to more than 25,000 hour-long videos per second.
But in practice, even if we have access to the greatest amount of data available to us since the beginning of time people still tend to make decisions based on their gut feelings basically.
This huge amount of data keeps sitting in dashboards, databases and reports nobody ever uses.
Sometimes it’s okay to follow our instincts and just go with the flow, but the majority of your business decisions should always be backed by metrics, facts, KPIs relevant to the future state of your business (a.k.a business goals).
In this short article, we will share what data-driven decision-making is and how your ecom business can benefit from it.
What is data-driven decision-making?
People say that history is the teacher of life...
Instead of going forward with a strategy you think is best, you can create a strategy based on cold hard facts about what seems to have worked in the past and what seems to have brung sub optimal results.
Group together historical information to analyze trends and make decisions for the future. That's it.
It's hard because it requires you to have previously collected data from the past and there's a need to correctly analyse the data and gather relevant insights.
Still, companies that embrace DDDM at the core of every decision they make have much better results.
How can you benefit from DDDM?
The power of it is in consistency and continual growth and improvement. It enables you to create new business opportunities, generate more revenue, predict future trends, optimize current operation, and produce actionable insights.
This way, you can stand to grow and evolve your online empire over time. The digital world is in a constant state of change, and to be able to adapt to your new environment, you must leverage the data you've collected about it.
DDDM is not a privilege held up only for big companies like Amazon, Google or eBay with almost unexhaustible resources. Organizations of any size can use data-driven decision wishing to transform their bottom line, processes and quality of teamwork.
With DDDM, organizations become more agile, detect new business opportunities sooner, and respond to market changes more quickly.
With near-real-time data collection, managers can swiftly measure results and create a fast feedback loop. These abilities make data-driven companies exceptionally customer centric and more competitive.
Data-driven decision making leads to greater transparency and accountability.
In organizations like these teams can see that the goals are clear, and results are being measured. This approach improves teamwork and engagement.
It creates a clear statement about fads not driving the organization.
Research backs this up model, too:
Companies using analytics have 126% profit improvement over competitors.
Organizations actively using data have 50% higher revenue growth than those who aren't.
- Dell Global Technology Index
Top-performing organizations use analytics 5x more than bottom performers.
- MIT Sloan Management Review
While 91% of companies say that data-driven decision-making is important to the growth of their business, only 57% of companies say that they base their business decisions on their own data.
To which group do you want to belong to?