Most business owners are aware that data is important, but they may not understand the potential for profit that’s right at their fingertips. It’s a revenue stream that many have been slow to maximize, probably due to misconceptions about how difficult it would be to get started. But the truth is that it’s relatively simple to start using data in lots of different ways to make or save a company money. Owners should be maximizing their digital treasures.
Most companies probably have more information on hand than they realize. Customer information, sales records, vendor details, schedules, assets and inventories, payroll, distribution methods, revenue reports, and much more are all part of a company’s data portfolio. All of it can be used in various ways to bring in big rewards. We’ve put together a look at a few scenarios that show how.
1. Impressing Financial Partners
When an owner is trying to secure funds for their business goals, data is probably their best friend. Banks, venture capital firms, and other investors want to see a comprehensive profile of the horse they’re betting on, so the more information an owner is able to provide the better. All of a company’s data can be incorporated into a business plan that provides an overview of their history and projections for their future. Most importantly, this will be in accessible format that potential investors or lenders can easily review.
2. Engaging New Customers
Customer data is perhaps the best tool owners have for locating and marketing to new prospective customers. Most companies already have a wealth of data regarding their current patrons, specifically with regard to where they are and what kinds of products or services they purchase most. That tells an owner a lot about consumer preferences. This can be used to build a marketing campaign that can be tailored to reach new customers and strengthen offerings for existing ones.
The point here is that owners will know which ponds to fish to get the best results – metaphorically speaking. Analytics can help an owner predict which regions to target and even what kind of new offerings might likely be a hit with various target audiences.
3. Eliminating Bottlenecks
Bottlenecks are costly. Data is great for discovering inefficiencies and finding ways to improve. Manufacturing and supply chain firms represent probably the clearest example of this as more companies adopt interconnected devices or vehicles in their operations. This level of reporting provides insights into ways things can be streamlined to be more profitable.
It’s not just limited to connected devices though. Areas like inventory management, project tracking, and vendor relations can all be improved when data increases awareness of constraints.
4. HR and Attracting Talent
Turnover is expensive, but it can be reduced. The average company has a ton of HR data on hand, including things like attendance histories, productivity reports, evaluations, etc. This can be combined with additional data points like employee satisfaction surveys and even social media data to give business owners a much more accurate profile of the types of individuals that are the best fit for their firms. That information could then be used in hiring and talent recruitment efforts to help reduce turnover and attract talent.
Data can also be used to boost employee engagement and continually develop the kind of company culture that workers want. A deeper understanding of what motivates employees, for example, can help improve performance and reduce turnover by forming an alignment between company goals and individual ones. All of which is financially beneficial for any company.
On a related note, this can also go a long way for a business’s diversification efforts too. Companies that want to become more diverse across both employees and suppliers can use data to find new ways to recruit and reach new partners. Data can also expose a company’s shortfalls in diversity, for example in areas like promotion and advancement. By understanding these shortfalls, companies can create a more level playing field and ultimately become more profitable.
Put the Data to Work
Any time a company is taking on a major project or making a major decision, data should be the number one tool used to determine direction. It’s much too valuable of a business resource to not maximize to the fullest. When owners are given more insights into their processes, their people, and their customers, they’re enabled to make the best possible decisions for the future of their company.
