A person who starts a new business has so many things to worry about. The first thing is to arrange for the funds to begin, and then the location for setup. Then the right manpower needs to be in place too. The paperwork for registering the business has to be completed accurately and on time.
Finally, when all of this has been done, the business owner faces the biggest hurdle, which is to promote his or her products and services in the right way and to the right people, so that the business can grow. That is why almost half of all new businesses opened in any country and at any time fail during the first year of existence.
A very useful way of growing your business is to make smart use of the database. If you are wondering where you can get useful and relevant data that can help you in growing your business, you just need to look around. Humongous amounts of data are being created every day.
The internet is a huge source of data, and this includes your own website and social media profiles. Useful data can also be generated at the point of purchase or during online shopping, or even when a visitor signs up for a weekly mailer or for a web conference. Let us look at a few important aspects of using data for growing your business.
A very obvious point that could be raised is that for my business to do well, I need to be able to find enough customers to pay money on time for my products and services. If all this happens, then my business does well. So where does data come into all this? The answer to this question lies hidden inside the question itself.
Forgetting a good bulk of customers, you need to use data. You also need to use data to be able to predict their choices and adapt accordingly. You need to use data to be able to provide good service to the customers. Later in this article, we will look at the different aspects of using data for business growth.
The volume of data that we generate and use today has increased manifold in just the last few years. The velocity of this data has also increased, which means that the speed at which data is produced has also increased, making it important that a business is able to be prepared to accept, store and use data at comparable speeds so that no data is lost. But along with the volume and velocity, the variety of data also needs to be kept in mind, so that the business is well equipped to make the best use of the data. These are the different types of data that a business can generate and use:
• Raw Data
• Derived Data
• Decision Support
• Automated Decision Making
Business owners often mistakenly assume that once the payment for a particular sale of goods or services is received, the sales cycle gets closed. But the sale can provide value even after the payment is received. This is in the form of sales and order management data. If the purchase has been made online, then Individual buyer data like mode of payment, delivery location, and other buyer data submitted during the purchase can help serve the buyer better, and aim for repeat purchase.
When you collate buyer data for a large number of buyers over an extended period of time, you can use that to spot trends, and understanding shifts, if any, in buying choices. The right usage of data can help in the next sales cycle, and also help the business redesign the marketing and promotional efforts.
The improvement in sales figures is a benefit from which your business alone benefits. But data can and should be used for the buyer’s benefit as well. All the data points mentioned above would also help the business understand the customer better, and apprehend her needs before she needs to say them out loud. This is somewhat like a bartender remembering the exact drink of a regular patron and welcoming him with the words, ‘What will it be today? The usual?’. Similarly, hotel receptions, restaurants, airlines, and so many other industries are making note of customer’s preferences and adding them to a database which can be used later to delight the customer.
If you look at social media today, you will find a lot of chatter on every business profile. People are not shying away from giving honest feedback, even if it is not very complimentary. The social media profiles are also good places for ‘I wish’ kind of statements from customers about what they would want in their product. Many companies are mining these social media profiles to get useful insights about new product development. The famous sports apparel company Nike went a step ahead and actually allowed their customers to have a say in the design of their products on their website.
A business need not necessarily use data only for benefits on the customer-facing side. A business can make good use of data to improve its internal processes as well, which in turn would positively impact the growth of the business. Data about raw material procurement, inventory levels, turnaround times, and even cost of production are some of the aspects for which companies collect data over a period of time, and learn to use that to improve their internal processes. This could help them to produce cheaper or faster, or it could help them reduce inventory costs, thereby adding to the profitability and helping the business grow.
From the earliest times, this is one aspect which has required businesses to generate, store and use data. Financial data was the basic need of any business even when data collection was not so evolved. The basic financial data maintenance of expenses versus income helped businesses understand whether they were making money. Today, financial data is linked to all other aspects of the business, which helps business owners understand the financial implications of any activity in real time. Second, businesses are constructing theoretical financial scenarios using sophisticated tools which help the business owners make informed decisions.
No business today can avoid the deluge of data. But data would become a liability instead of an asset in two scenarios – if data is generated just for the sake of it, or because everybody else is doing it, or if data is being generated but not used fully for getting insights.
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