Why Data Can Be the Key to Business Success
Human history has seen countless conflicts and wars fought over valuable resources, such as food, land, and gold. Trade deals and alliances have also been formed between nations and superpowers based on these commodities. In recent years, another valuable and highly sought-after commodity has emerged: data.
Data is a specific form of information — usually including facts and statistics. Data is used for many different purposes, from military intelligence to technological developments. One area that data can be particularly useful in is in business and marketing. Digital marketing specifically uses data as a vital component of its operations.
Data is useful for businesses for plenty of different reasons. In this guide, we will explore some of the ways that data and an understanding of how it works can really benefit a business.
Data and Marketing
Data on the behavior and preferences of internet users (who may be customers or potential customers) is the foundation and the cornerstone of any successful digital marketing strategy. The most reliable predictor of what may happen in the future is often what has already happened in the past. For example, if an internet user has a history of engaging positively (including following on social media, “liking”, sharing, etc) with certain content, it is most likely that they will continue to do so in the future.
This means that data such as purchase history is of huge interest to many companies. E-commerce sites such as Amazon have an interest in persuading users to make more purchases of products using their site, so they usually use “recommendations” to advertise related products to users. While in some cases these recommendations are unlikely to result in further sales (for example, a customer who has just purchased an office chair is unlikely to want to purchase another office chair any time soon), in other cases they can do (for example, a customer who has just purchased a video games console is likely to want to purchase video games to play on it or extra accessories such as additional controllers). Of course, the companies that are manufacturing the products for sale on these sites also benefit from this, so the use of customer data in this way is agreed upon as a mostly mutually beneficial practice.
Data collection is not just limited to purchase history, however. Data that involves how websites are used, for example, can help marketers by painting a picture of which aspects of their site, content, or advertisements are successful and which are not. The term “engagement” refers to a number of data points regarding how users use websites and online content. For example, data that shows that 90% of visitors to a site only view one page on that domain can flag up the need for more engaging content or a change in the site’s design. Data that shows what parts of the world users are from, what their age group is, what gender they are, etc, can help marketers to identify their current demographic and whether or not it lines up with their target market. The process of analyzing this kind of data is known as data analytics, and there are various courses that teach this skill. Click here to find out more. Sites like YouTube, Facebook, and Google have their own inbuilt analytics tools, which can help digital marketers to develop an effective strategy.
Data from Google’s analytics tools can also be used to create effective SEO (Search Engine Optimization) strategies for company websites and blogs. Data such as what specific search terms are used most commonly can be extremely useful when optimizing written online content to rank highly on SERPs (Search Engine Results Pages) and to bring in as much web traffic as possible. After all, there is not much point in having fantastic products or services and a brilliantly designed website if nobody is actually visiting it!
Data and Product Development
Not only can data identify what customers and potential customers find appealing or unappealing about their brand, but it can also shape future developments in products or services. For example, finding out that 75% of customers had positive reactions to a particular product, but only 57% of customers had positive reactions to a different product in that range can influence which products are to be focused on and which products need to be either changed or discontinued.
This kind of data can often be collected using direct and open methods such as conducting market research surveys among customers or potential customers. In some cases, customers may even provide this kind of feedback without being prompted, such as by contacting a company directly with a complaint or praise or posting publicly accessible reviews online. Most large companies have teams of staff solely dedicated to running social media accounts and communicating directly with customers or people interested in the company’s products or services.
Keeping Data Safe
Unfortunately, not all methods of collecting useful data are honest and ethical. The fact that data is such a valuable commodity means that data theft is common. Data breaches and hacks happen all of the time and have even happened to huge companies like Sony. Data theft is sometimes carried out by rival companies, or even by professional cybercriminals who can sell stolen customer data for vast sums of money on the black market!
The fact that data is so valuable and so prone to theft means that it is important to sufficiently protect the data that you already have. Investing in strong cybersecurity tools and measures is vital, especially if your business stores any form of potentially sensitive customer information. The theft of personal data can lead to a loss of customers and a damaged professional reputation for a company. The larger your company and the more valuable the data it stores, the bigger of a target you may be for data theft.
Understanding how to collect data, use it effectively, and protect it from theft are all essential aspects of running a successful business in the modern world.