Becoming data-centered is the critical technology strategy of many businesses worldwide. It is not a coincidence that the most valuable companies (based on their market value) in the last few years are dominantly technology companies that use data as "a mine of business knowledge".
Companies all over the world from various industries have integrated data as an essential part of their business process. More than ever, data allows companies to acquire the most fruitful information and knowledge of the company itself, its competitors, its customers, and so on. In today's ever-changing world, data is the key to get ahead of rivals (Read more: Analytics to drive sustainability in Competitive Advantages), heading to success. Here are some aspects of data has proven its significant benefits that any business should take into account.
In a world that products and services are countless, customers have a variety of choices, and the fight between suppliers becomes tenser than ever. To avoid being reductant in the market, understanding customers is a crucial thing. There are many reasons that data is the true voice of customers. Customer information can be varied from demographic, geographic to behavioral data taken from surveys or observations. With this type of data, companies can draw a picture of their customers and, more importantly, their interest and willingness to buy. It is also found that leading companies are turning data into insights and taking action to offer customers the products that match their needs most. Data extracted from customer feedbacks is also beneficial for post-selling services and customer care.
Reducing business expenses
In any business process, cost controlling should always be taken into account due to limited resources. A further step after understanding customers should be reaching out to potential customers effectively. Data allows businesses to filter out customers that most likely to purchase their products. Because reaching customer is usually costly, budget consideration is no doubt in need. Facebook ads, mailing, billboards, or other paid media tools can cost a fortune if the company does not have a specific strategy on how and who the advertisement should aim to. Pareto's principle suggests that 80% of revenue may come from only 20% of the customer. Data analysis is a useful tool that helps companies to detect that 20% most important customers, bringing a significant advantage in business budgeting.
Supporting decision making
Thoughtful decisions lead to successful businesses. As the 2020s unfold, it is even more important to make the right decisions in this competitive global market. With data and data science, companies no longer have to make their big decisions based on unsure consumptions, best-guesses, or hunches. Instead, they can take advantage of analyzing an enormous amount of real data to acquire business intelligence, using the business analysis to predict the future, and then making decisions for the present. Data-driven decisions heighten not only the chances of success but also lower risks and better off risk-management. Taking an example of a company entering a new market or introducing a new-to-world product, a company should consider many business activities from production to consumption. In such circumstances, any knowledge gained from real data will be greatly beneficial, especially customer willingness to buy or customer price sensitivity of the new market.
Entering the 2020s, running a business without data support is just like running on the streets with blind eyes. Mastering data for business will be a highway leading companies to success. There is no doubt that it is what makes Google and Facebook so successful. These companies own a massive amount of data on people's online behavior, especially web search, which directly implies their interests and wants. The trend towards data use has been around for decades, and there is no doubt that it will keep being so influential in the next decade.
Dave Lavinsky (2018). “Pareto Principle: How To Use It To Dramatically Grow Your Business”. Retrived from https://blog.fpt-software.com/analytics-to-drive-sustainability-in-competitive-advantages