Here are six essential principles if you are an entrepreneur who wants to think about how to use data to improve your business.
Consumers and manufacturers now have more information at their fingertips than ever before. This data should be used to improve your business.
However, greater data hasn’t always equated to smarter goods. Technology shifts such as cloud storage and smartphones have irrevocably altered the business landscape. Therefore, consumers now have more information than ever before, while firms’ knowledge of customer behavior is also expanding.
However, new tools must be strategically implemented. The following are six essential principles for any business owner who wants to know how to use data to improve and grow their business.
1. Build a product platform, not a pipeline, with data.
All consumer-facing firms were pipelines twenty years ago, pushing products and services out to customers. Today, we see Credit Karma as a digital platform that allows customers and financial services providers to interact in meaningful ways.
The pipeline model has been disrupted by data-driven technology platforms. These allow organizations to encourage more organic contact between producers and consumers while scaling at a faster rate. Pipelines, on the other hand, are rigid.
2. Look for areas where you can use data more effectively.
When buyers and sellers lack important bits of information, massive inefficiencies emerge in marketplaces. You can generate significant new market opportunities by combining these knowledge gaps with the types of data made available by tech advances.
In the United States, for example, banks spend billions of dollars each year attempting to attract new clients. This is a cost that is considerably exaggerated by having to reject a large percentage of applications that do not match the underwriting criteria.
The issue is two-fold. First, consumers are under-informed about financial services goods. Secondly, banks’ present marketing isn’t reaching the proper people. Therefore, improved information availability is a win-win situation for everyone.
3. Use data to connect customers and producers in a meaningful way.
One company started by providing free credit scores and reports.
They were then able to attract a significant number of members and empower them to educate themselves and take charge of their financial lives. Their revenue comes from matching each member with possibly superior financial products depending on their credit profile. They did this through their platform.
As a result, their members were more informed about potential options. In addition, they were less likely to be denied new lines of credit. Furthermore, the banks then spent less money on poor marketing.
4. Make greater use of the information available to you.
When big data is in use in an ad hoc way, it is just as likely to be confusing as it is to be beneficial. Therefore, consider what data is available and its current use. After that, think about how it could benefit your company.
As an example, the credit reporting system in the United States is one of the most advanced and sophisticated in the world. Rather than requiring fresh data, one company discovered ways of making it easier and less expensive for customers to access data that already existed.
5. Transparency is not optional when it comes to data.
The most dominant corporations in the online world use data to shed new insight on previously opaque operations.
Glassdoor combines workplace feedback and data analysis to help prospective job seekers figure out what it’s like to work for different firms.
With greater real estate information, companies such as Zillow help potential buyers navigate the bureaucratic and emotional stress of property hunting.
In addition, at Credit Karma, they assist members in understanding the impact of credit on their lives and how to take control of it.
Consumers desire material that is relatable and timely. Therefore, they want to use the internet to learn stuff that they previously didn’t know.
Conclusions
Big data is a valuable asset to any business. However, it is vital that your data is in use in the best possible way.
Learning to understand and implement your data is one of the most important aspects of business today. Without this learning, your business may not be able to compete in today’s increasingly competitive market.
Once you have customers, data helps you figure out exactly what they want.
Data is a valuable asset in helping you analyze and refine your product. Additionally, it helps you grow your offering as you build a consumer base. Finally, data reveals where your users are coming from and what aspects of your product they find difficult or engaging.
