Why is it important to be data driven?
Customers are constantly bombarded with advertisements and sales pitches. They see them on social media, billboards, and every website they visit. That means it takes a lot more for an advertisement to not only catch their attention but also lead to conversion.
This is where data can make the difference.
According to Forbes, sales professionals using data to target potential customers increased sales by 54% since 2018. But why is that? Data is used to connect with customers where conversion is most likely. For example, receiving a reminder of an abandoned cart can help convert a customer who had already decided they liked your product, just had not yet completed the sale.
There are different levels that a company can be at when talking about data usage. The progression from data challenged to data driven is called the Maturity Model. This model, developed by Unific, can help you understand how data-driven your company truly is and how to progress to the next level.
Using data peripherally is not enough to maximize sales. Allowing the data to govern your overall business strategy is a sign of a truly data-driven company.
But how do I know what stage my company is at? How do I move to the next level? Keep reading to find out.
Identifying characteristics. Being data challenged means that your company is not using the data it collects or isn’t collecting data at all. Realistically, most companies collect data, whether they know it or not. The problem usually lies in not using the data or the data being so fragmented that it is essentially useless across silos.
The problem could also be that the company lacks the personnel who can analyze the data effectively. It doesn’t have to be a formal position for a data analyst. Maybe someone in the company has a good eye for numbers and analysis skills. If not, or if this person has not yet been identified, your company may be data-challenged.
Other obstacles to data use may include lack of time to analyze data, technology limitations, resistance to change, or fear of truth. All of these obstacles can be overcome, but putting in the time and effort to start prioritizing data analysis can be daunting in an already overwhelming business environment.
The number one sign of being data challenged is not knowing even the sources of data that your company uses. If you don’t know them, you probably aren’t using them. Once you are able to identify the sources of data, find out if you can identify the following data points:
- Average Order Value (AOV)
- Customer Lifetime Value (LTV)
- Repeat buyer rate
- Cart abandonment rate
How to level up. Because you are starting from scratch, the transition to Data Aware is relatively simple. First, take a look at what you already have. Make sure that your current system can integrate data on your customers’ behaviors into your marketing software. You might have what you need already! If you don’t, then don’t panic. You may be able to supplement your current infrastructure with add-ons. But remember, at the end of the day, becoming more data-driven will pay for itself. So take a deep breath and get ready to make some changes.
“The price of doing the same old thing is far higher than the price of change.”
- Bill Clinton
Also make sure that you partner with an expert at this stage, to save yourself a headache later. There are many options available, and they will all claim to be a one-stop-shop. It can be hard to navigate through all the clutter. This is where an expert can bridge the gap. They can provide guidance on what each platform will be able to offer you now and in the future.
Identifying characteristics. A data-aware company knows the value of data, but may not have unlocked it yet. Characteristics that indicate a data-aware company may include
- A focus on data collection regardless of its usefulness
- Minor integration between systems (shopping cart, marketing software, etc.)
- Automation of basic customer communications (welcome email funnels, feedback surveys, etc.)
- Data is present, but no actionable analysis has been done
If your company falls in this category, it’s time to level up and allow your data to influence your all-around strategy.
How to level up. At this point you have some data and you need to know what to do with it. The first thing you want to do is take stock of what data you have. Identify the value of each data source and document. In order to understand the value, you need to know if it is standardized and complete.
Once you have a full understanding of your current data and its value, get buy-in from all silos. You need the whole team on the same page. Data is going to be in charge and some people might feel like their creativity will be devalued. But the truth is that data will improve the bottom line more often and more significantly than a creative idea with no data to support it.
Identifying characteristics. When you reach the stage of being data influenced, you are now using the data in a meaningful way. Your company gathers insights from data collected and uses it to make decisions.
Data-influenced companies also have started segmenting their customers using data. Remember the welcome email funnels we mentioned earlier? Data would now influence which customers received which version of the email funnel to best connect with them.
How to level up. I know, this seems like the end. What more could there be? You are using the data in a meaningful way to influence decisions. That’s enough, right?
In order to reap the full benefit of your data, your company must become data driven. So don’t get too comfortable in the data influenced stage. Evaluate your current team to see if you are set up to become fully data driven, and get an expert on the team. The expert could be an on-staff data scientist or an external partner such as Cetrix. External partners can be a great way to economically and efficiently move into full data maturity.
This is it. The final stage of data maturity. In this stage, companies allow data to govern their strategies. Planning stems from data insights, and all decisions made have clearly-defined outcome metrics.
Businesses at this stage have seamless communication with customers that is always personalized. Since data drives all strategies, communication with customers always feels to the customer as if it was made for them. They feel like the company has taken the time to understand their pain points and how to address them.
Businesses at this stage also have optimal efficiency. With the whole team working together and driven by hard data, there is little room for waste. Data gives a company a solid foundation based on facts and the strategies that are most likely to increase sales.
The first step to becoming data driven is recognizing where your company sits on the maturity model. Once you know where you’re at, we will meet you right there. Let us know at Cetrix how we can help your journey to becoming fully data driven and make the most of your data.