They used to say, “Cash is king.” While cash is still quite nice, the new truth is that data is king, mostly because your ability to make good cash in business – or any organization – is now highly dependent on your data. Facts.
The ‘Hair on Fire’ Business Life
Hands up if you have ever, in your entrepreneurial journey, used the “spaghetti at the wall” approach to product development or marketing. Another way to say it is “spray and pray” or “the buckshot approach” which is usually applied to marketing. These little sayings are just cute ways of explaining the approach often taken where a business creates something – whether a product or a marketing campaign – without any supporting evidence as to whether or not it can work. If you conduct and build your business by relying on your observations, your intuition, and/or anecdotes (stories you hear), you might be completely right, but the probability that you will get it completely right are much reduced.
The buckshot approach to business building leads to the “hair on fire” business life. It’s scattered, reactive, and stressful. If you always feel like you are making decisions based on your best guesses and constantly changing direction and never feeling like you are in command in control.
It’s very frustrating when you can see that people have a problem, and you are offering a great solution, and yet it feels like no one’s buying – or at least not to the degree you had believed would happen when you built the solution. Here are some potential reasons this happens:
- It could be that the people with the problem don’t think they have a problem. They’ve grown accustomed to the problem, adjusted their lives and just tolerate the issue.
- It could also be that the people with the problem won’t spend money on the solution. A lot of people fall into this category. They know they have a problem, and they are bothered by it, but they won’t invest in a proper solution beyond Band-Aids.
- It could be that their eyes aren’t where you are marketing. If you have done research, you will have learned where the people with the problem are looking to find solutions. If you are not marketing in those places, they’re not seeing your stuff!
- You haven’t provided evidence that your product or service works. Many people won’t make an investment in an unproven item. They want to know that others have bought. They want to read reviews and see that it has worked for others.We should definitely have a conversation about prototypes and beta testing but that’s another topic for another day.
Strategic Business Decisions Requires Evidence
If you google the phrase Business Intelligence, you’ll likely get scared, unless you’re a total data/digital geek. There is a bunch of insider jargon like data tools, data mining, integrated data feeds, APIs, etc.! Overwhelming. Essentially, though, the title of this section says it all: making strategic business decisions requires evidence. And where will you get that evidence? From data. Data is comprised of facts and statistics that you gather from a variety of sources. You might gather your evidence through market research (I strongly suggest you do that!). Online research, surveys, 121 interviews, focus groups – these are aspects of secondary and primary market research that can offer both of what’s called qualitative and quantitative data. You gather it, analyze it, and then make decisions.
Using data tools is just another way of gathering evidence to either validate your assumptions or help you make strategic business decisions. The chances are that you have a website and that you market and advertise on social media. Maybe, like me, you send out emails regularly. All of these tools have data tools attached. Website analytics, social media insights, hits, bounces, engagement… all of those things can tell you something to help you make better-informed decisions.
Press Pause
Before you make another decision about taking your business in a certain direction, whether it involves marketing or advertising or pivoting or tweaking your product or service, try this:
- Press the pause button.
- Make a list of all of your current business decisions. This would include everything from what you offer, to whom you offer it, to where you market/advertise.
- Look at all those decisions and ask yourself, “How do I know this is a good decision? What evidence do I have?”
You might have good evidence but figuring out where and how you got that evidence will help you decide what evidence you need to gather on an ongoing basis and from where you should do so. If you don’t have evidence, determine what it is you need to know in order to prove to your satisfaction that the decision is sound. Set measurements and Key Performance Indicators (KPIs) and formally set up data-gathering tools to help you get the evidence you need.
Reduce your Risk
Look, business is risk, but you can make it much less risky with good business intelligence. This is a deep and perhaps daunting subject, but I think you get the point. You’ll feel better and sleep better and perform better if you build your business with good intelligence tools.
I’d be happy, of course, to talk with you one-on-one about where your business or organization is at, what you need in terms of business intelligence and how to get that set up. Let’s connect!
And, as always, Stay on Point!
