Regardless of the stage of your company, there is little to no excuse for failing to make effective decisions. The most effective are consistently made by individuals that have the ability to use data in order to be more informed that the competition. Failing to properly use data will result in less informed decisions, leading to mistakes that could otherwise have been avoided. There are several ways a startup may use data, even if it has no prior operating history or method of collection. This article is designed to inform you of ways that your company can generate more money and scale faster, by making more informed decisions through data analysis.
The most effective way is to first ask a question about what your business needs and then the information that should be required to make a decision. Understanding what problem you are attempting to address will help to determine the data sets that are needed in order to perform the analysis. For instance, if you desire to gather more feedback from your potential customer base for product improvement, you may need to collect market surveys. Additional information that may need to be acquired is the financial data associated with making the improvements. Determine whether or not the additional features will impact other segments of your consumer base, or if the costs associated with providing it will demand a price increase.
Gathering this information can translate into making more logical decisions about product releases. Our business plan consultants have worked with a number of companies that fail victim to the common problem of holistic problem solving. However, some of the best results that we have seen from campaigns have all been strictly derived from analysis with minimal assumptions leading up to the conclusion. Once you have the appropriate information in order to determine a path to follow, run a specific test that will help you understand what route to take. Attempting to analyze whether or not to include your box in more expensive packaging, perform a cost vs benefit analysis and determine the specific gain or loss from the decision.
If you are thinking about entering a new market, use your existing consumer data to determine your target demographics and how aligned they are with the city you are targeting. Run a campaign to test the market price sensitivity to determine the appropriate pricing strategy for the region and alter your advertising methods so that you may tailor your promotions to the location. While we discuss about the importance of acquiring and analyzing information, and important consideration should be taken for its origins. Data sets that are acquired should be taken with skepticism, as many incorrect conclusions may not be drawn from poor analysis, but poor data collection.
If your company is unrolling a new product line of low cost laundry detergent and you are performing your market survey in the state as a whole, the data may be less accurate than targeting working class or poverty level consumers. Thus, data sources and gathering procedures should always be tested and questioned.
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