How Companies Can Use Data Smartly to Advance Faster
How can data be used to improve performance
Local companies are increasingly dealing with stiff competition from domestic competitors and international ones making inroads into UK markets. As the pace of business increases, it’s up to businesses to use data in a smarter way to avoid being left behind by conglomerates with big data that may successfully wield data science to advance their market position.
Here’s how companies can use data smarter to move ahead (or not get left behind).
Analyse Price Points and Pricing Strategy
Through the use of data science, it’s possible to track how the company’s products are selling when priced differently.
In a similar way to how A/B testing works with websites, a business can apply different pricing strategies over time and use data analytics to better understand how the price is affecting consumer behaviour.
Only by testing different pricing strategies can companies know how best to position a product in the market. It is often surprising to find that some products will sell better when priced dearly – it seems counterintuitive but it’s not. A high price is often perceived as providing more value making the item increasingly desirable. Of course, the product must provide the higher value expected, otherwise, customer responses will be poor.
Looking Backward to Get Ahead
By using business intelligence (BI), a company can appreciate what led to their previous performance. Rather than operating mostly in the dark, the past can be reviewed to glean information about the company’s performance and what led to it.
While the future may require adjustments in product lines or strategy to meet changing demand, building on what’s gone before informs business leaders appropriately. As such, they can derive more confidence in their new decisions because it’s based both on the past and the current situation.
Predicting the Future
While no one can predict the future precisely, with enough data being collected, it’s possible to get a reasonable idea of what may happen.
Once there are sufficient data points available, models can be created through data engineering to figure out what the data means in the new business sense. Companies like Datawrk are skilled at working in this manner to assist businesses in a variety of industries to figure out what they’ve got and therefore how to proceed from there.
Using safe data dashboards to provide insight into real-time and backward-looking data, managers can apply a mixture of common sense, past results, and near-term information to get close to predicting the future.
Look for Incremental Improvements
While gleaning information about growing demand can lead to breakthroughs about a new product or service launch, that’s not as far as it goes. Beyond predicting the future in significant advancements, it’s also possible to find meaningful clues leading to incremental improvements to existing products or services too.
For instance, reviewing data collected from customer feedback surveys and/or messages or complaints from customers over time, it’s possible to identify where products or services are falling short of the mark. Perhaps this is because it is the 1.0 version of the product or it was never developed out further once reaching this stage with attention being directed elsewhere?
With incremental improvements, the idea is to use feedback either individualized or in an aggregated fashion to highlight where changes can be implemented. Customers may have asked, “Why doesn’t the product offer this option?” to which the answer might reasonably be, “Yes. Why not?” This provides a jumping-off point for executives to pursue.
Driving Performance Through KPIs
Another way for companies to keep a close eye on what’s happening on a month-to-month basis is through Key Performance Indicators (KPIs).
These are a defined set of data points that provide immediate clarity to business leaders about how the business is performing. While there likely will be detailed reports that dig deep into the specifics behind the results, defining and reviewing KPIs is essential to know what is working or not.
KPIs are also useful to quickly see whether broader strategies are getting traction or failing to do so. By monitoring the results behind the financial numbers, it’s then possible to revisit the operational side to rectify matters when outcomes disappoint.
Modifying KPIs as the Business Evolves
It is also critical to update the current KPIs to reflect the changing nature of the smart business. All too often, the reporting remains stagnant in the mistaken belief that once the indicators are set, they’re set in stone. Nothing could be further from the truth.
While it may still be relevant to collect and report on the same data to provide a like-for-like comparison, other metrics can be added later. Perhaps breaking off the data into “Latest KPIs” and “Legacy KPIs” is useful to give both the validity and attention they require?
By using data analytics and historical information, companies can better orient themselves towards what is likely to perform well in the future. As such, they come out of the dark and move into the light.