Regardless of the volume of data that a business gathers, there are a number of data points that are recorded on a regular basis: from sales figures to customer feedback. However, this value comes from data when a company can interpret the data and make better decisions with it. By transforming raw data into actionable insights, leaders can make more informed strategies.
A business can hire a data analysis consultant to analyze data and look for interesting trends. The point is not to make great reports. Rather, it’s to know and live what the numbers say. Here are 3 ways to convert business data into actionable insights:
1. Start with a Clear Business Question
Good analysis gets started with a “problem from business,” not a spreadsheet filled with numbers. A business may be questioning why sales have slowed or what products are most profitable. A clear question provides clarity and helps your teams avoid wasting time on information that is irrelevant to the decision.
The question should also be related to a quantifiable end result for the business. A company may analyze repeat purchases and interactions with providers, among other measures, when looking to enhance customer retention. If there is only a single goal, your teams can look for evidence to explain the problem rather than gathering data just for its sake.
2. Turn Findings into Decisions
The most significant step in the analysis is when a pattern emerges. Teams must seek to understand what this finding should mean to the business and what might possibly be done about it. If you are able to tie the insight to a decision, test, improvement, or next step, then it is useful.
For online stores, for instance, they might realize that when customers are shopping, they see delivery costs and are not staying in the section to make the purchase. When it comes to reporting the abandonment rate, rather than just that, this team could try different delivery information. When the decision is to be made again, evidence derived from that test can be used.
Here are a few actionable steps that can be helpful:
- Determine who the most valuable customers, products, or processes are.
- Try to track down the unusual changes and don’t assume otherwise.
- When feasible, test one improvement at a time.
- Establish a criterion to determine if the action was effective.
- Review and regroup when evidence changes.
3. Make Insights Easy to Understand
Analysis can be correct, but if people can’t grasp the information quickly, it will fail. Reports should be readable by a business professional. A report should answer those questions which are important to readers, not bombard them with all the possible statistics.
Each team might also require its own special understanding of the information. A marketing team might be interested in customers being acquired and campaign results, while a finance team may be interested in margins and costs. Making insights accessible to the audience helps to ensure that people have the right information and are able to take action.
In conclusion, the trick of turning business data into action is the simplest progression from information to understanding, then from understanding to action. The process begins with an inquiry question and provides evidence based on reliable data and meaningful patterns, reaching a conclusion and making a measurable decision. Once this happens regularly, information does not merely become a report, but becomes part of daily business instead.