Data is like gold mines. They help to get to know the customer better, study the competition and make smarter decisions to modernize the company. That’s why being data-driven is fundamental to business performance.
But it’s no use just embracing the digital transformation and investing in technologies to capture a lot of loose information. Being data-driven means turning this into strategic knowledge to guide business actions.
The right way to face the challenge is to understand better what data-driven is and its importance. In this complete guide, we show you valuable tips for this.
Table of Contents
What Is A Truly Data-Driven Company?
It is a data-driven company. In practice, this means that all the brand’s decisions are based on factual information, not on “guesses” or the “feeling” of executives.
This is not to say that you always have to make a decision and then look for data to support a point of view. When things flow in that direction, it is common to arrive at distorted conclusions because a cut is made to value only the information that reinforces the argument raised.
In the data-driven culture, the path is the opposite: first comes the data and, only later, a decision based on it. And that goes for all company sectors, from marketing, service, IT, and financial department to supplier management.
What Is The Importance Of Being Data-Driven Today?
The data-driven culture optimizes a company’s results. That’s simple! You see: today, around 2.2 million terabytes are moved every day around the world.
And want to see another impactful number? The IDC report, The Digitization of the World, pointed out in 2018 that the global data sphere would grow from 33 to 175 zettabytes in 2025.
There’s a reason for so many bytes of data. We are in the digital age, and everything we do online generates information: Google searches, browsing through social networks, geolocation, using IoT devices, and so on. Companies still rely on data coming from CRM, management software, and service histories.
This knowledge is a perfect way to improve the company with a data-driven culture. Using data allows you to understand consumer behavior and market movements in depth.
The premise applies to companies in any sector, including banking services. Being data-driven helps you know the following:
- Who are your customers;
- Which products or services are most valued by them;
- What price they are willing to pay for the solutions;
- What are the preferred points of contact;
- What is the most appropriate moment to approach the consumer;
- Who are the company’s strategic partners;
- What your competitor does that fills the eyes of your current customers.
What Are The Impacts Of This Strategy On My Company?
It boils down to two words: safety and success. Being data-driven ensures more predictability of results because the company outlines strategies based on factual data. To understand better, see what this culture can do for your company.
Companies that stand still in time lose customers to the competition and risk going bankrupt. Just look at what happened to Blockbuster—the movie and video game rental company. By not keeping up with the evolution of public behavior and innovating, the brand lost market share to streaming platforms.
A company needs to monitor market movements and implement changes to improve the customer experience. That’s the only way it can keep growing. Data-driven comes here to help develop innovative, profitable solutions that meet public demand.
Improve The Credit Granting Process
No bank lends money knowing it will be lost later, right? To grant credit, they do thorough research on the customer and thus confirm if he has the discipline and conditions to pay the installments.
A data-driven financial institution uses technology and intelligence to carry out this study. The best thing is that it happens automatically and in real-time. Thus, you can speed up the process and increase security when releasing the credit. And more: Besides reducing defaults, it is possible to prevent fraud.
Identify Risks And Opportunities
Predictive analytics allow you to use data from the past to identify patterns and make projections for the future. An example is when your credit card company declines a purchase from a site you’ve never purchased from before.
Based on customer behavior data, the bank identifies that purchase attempt as suspicious and blocks the operation. It’s boring, but it brings security to the financial institution and the customer.
There are still much more complex problems that put your company’s survival at risk, such as economic crises and the opening of new markets.
Predictive analytics not only helps you attract customers but also helps you retain the ones you already have. As the data shows the preferences and behavior patterns of the consumer, it is possible to create personalized actions focused on loyalty.
If something still goes wrong in this process, it is possible to identify signs of churn to act proactively. If your customer frequently complains about a service, but you do not take any action to resolve it, he is likely already flirting with the competition.
Service reports, complaints posted on social networks, and history of using the solution generate data that signal abandonment. With this, you can understand the origin of the problem to correct it and reverse the dissatisfaction.
There is no data-driven company, just one area. Data must guide the work of everyone on the team, whatever the department.
For a retail company to correctly scale the necessary inventory, for example, it needs historical sales information, right? The same logic applies to other areas. Often, to correctly interpret the data of a sector, it is necessary to cross-reference other information.
In practice, this means that, in the data-driven strategy, data is not just stored on each employee’s computer. They stay in the cloud so everyone can access information in real time.
The data-driven methodology optimizes processes, increases workforce productivity, and improves operational efficiency. We can eliminate unnecessary expenses and reduce costs with more agile, safer, and more specific activities. The consequence of this is a more profitable company.