How many times have you heard the phrase “follow your gut” about making a decision? Sometimes, that strategy can work…but when it comes to making effective business decisions, you need to be a little more strategic.
When you’re making decisions for your business, you need to have some kind of foundation of information in order to make the best choices. And honestly? The best business decisions center around the way you use your data.
Data-driven business decisions help you be more effective, productive, and successful. No matter what decision you’re hoping to make, having data on your side helps you make an objective, clear-cut decision. That way, you’ll feel better and be more confident in the choices you make.
What Does It Mean To Make Data-Driven Business Decisions?
When you use your metrics to make decisions, you’re practicing data-driven decision-making. This strategy helps you really validate the decisions you make before you have to commit to them.
You have TONS of opportunities to collect valuable data in your business. From understanding your website visitors and evaluating your social media strategy to honing in on your audience with demographic data, there are so many ways that data can shape your business decisions for the better.
You should track metrics that are most aligned with your goals. From there, it makes sense to use that information to make decisions to (hopefully) help you achieve those goals!
Remember: just having the numbers isn’t the point of data. Instead, the purpose of collecting data is to use it to gain actionable insights and make better business decisions!
How To Make Better Business Decisions Using Your Numbers
Ready to start using data to make better business decisions? Here are five steps you can take to utilize your data more effectively in your decision-making process.
Start Looking For Patterns
When you think about data analysis, try not to get overwhelmed. It sounds scary, but really? It’s like a scavenger hunt for patterns!
Analyzing our business data means searching for patterns and correlations between different pieces of information. Once wefind those patterns, we can draw conclusions and make strategic decisions based on those conclusions.
To start naturally seeing those patterns, you need to slowly change your mindset around data. Don’t be afraid to look for patterns in real life (and not just in piles of numbers from your business). Everywhere you look, you’ll find opportunities to practice analyzing data and drawing conclusions—surprisingly, it’s something we naturally do all the time.
Pick KPIs Tied To Your Goals and Objectives
The KPIs (key performance indicators) you choose should be highly aligned with your goals and objectives. Your KPIs are the key metrics that you’ll examine in order to make decisions.
But without clear goals in place, you won’t really know what to measure (or why you’re measuring it).
All of the business decisions you make need to be strategic and based on data. But those decisions also need to align with your business values and mission! That’s why, as you choose your KPIs in the first place, you need to focus on your unique goals and values.
This also brings up a really important note. As you make business decisions, if something is backed by data but doesn’t support your mission or larger goals, you can switch it up. Remember: data isn’t there to be a jail cell—it’s there as a platform and resource you can leverage for better results.
There’s no one specific recipe for anyone’s data, and so the conclusions you draw might not necessarily be the decision you feel is best. And that’s okay!
Just re-evaluate, focus on your goals, and make a decision that feels good…and from there, you can adjust the data you’re measuring in the future to keep things more aligned.
Be Consistent—Tie All of Your Decisions To Your Data, Not Just Business Decisions
Now, with that little reminder in mind, know this—it’s much easier to make business decisions based on data when it becomes a habitual process. If you’re used to just “trusting your gut” or “following your intuition,” data-based decisions won’t necessarily come naturally.
When we make something a habit by doing it consistently, it becomes natural and easy.
Start practicing using data to make small, everyday decisions. That way, when you do need to make bigger business decisions, you’ll be ready to analyze your numbers and get a picture of what the best move would be.
Educate Yourself So That You Can See What The Data Actually Means
For most business owners, the idea of data and numbers is a little scary. But you shouldn’t be intimidated!
The best way to build confidence in your data analysis skills is to educate yourself:
- What should you be tracking?
- Why does it matter?
- What do specific numbers mean for your business?
All of those questions are areas you can start learning right now.
Re-Evaluate Your KPIs and Metrics As Needed
It’s really important to make adjustments to your KPIs as your business grows and changes. Data is there to serve you, so be sure to check in regularly and make sure you’re tracking what actually matters.
This will help you make better business decisions even as things change for you! Making adjustments to the data you track can help you make more tailored, informed decisions, and think outside the box when it comes to weighing out the pros and cons in your business.
If you’re ready to make better business decisions, these five steps will help you use data to experience great results. You’ll feel so much more confident when you make decisions based on facts and figures!