Why collecting information is increasingly crucial
to make accurate decisions
The expression data driven has appeared quite frequently in conversations about business and marketing strategy. Translated into Portuguese, this concept refers to data-driven processes, which are based on the collection and analysis of information — and not just “feeling” or intuition.
The term has become popular because today it is possible to collect a lot of information about the behavior, routine and preferences of users and consumers, looking at what they do online. These “clues” are collected and transformed into the so-called big data, a set of millions of data.
After being treated and interpreted, this large volume of data can be used to generate insights that help companies know where to navigate. In the data driven culture, therefore, data is at the center of decision making and strategy planning — whether launching a product or increasing sales through social networks, for example.
In companies, data driven processes can be used in several ways, such as: identifying new products and services that would appeal to consumers; do tests to observe how the public interacts with what you created to see what can be improved; or analyze changes in demographics to understand where the biggest opportunities — or threats — lie.
On a article, the Harvard Business Review gives three examples of how large companies are using data to drive high-impact decisions:
Leadership development at Google
The company collected data from more than 10,000 performance reviews and compared this data to the employee retention rate. This information was used to identify the most common behaviors of managers with the best performance and, based on this data, a program was created to develop these skills.
Starbucks Real Estate Decisions
After closing hundreds of stores in 2008, the company's CEO decided to take a more analytical look at choosing the next points of sale. Now, Starbucks combines analysis of demographic data and traffic patterns with observations from its regional teams to determine a location's chance of success before making the investment.
Product recommendation on Amazon
It's no secret that Amazon uses data to decide which products to recommend to customers, taking into account what they've purchased before and their search patterns. To achieve this, the company combines data analysis and machine learning to make accurate recommendations.
Companies that adopt a data-driven culture can benefit from results such as having more agility and efficiency in making decisions, making more assertive forecasts, developing products more suited to the public's profile and being able to outline more accurate business strategies.
Want to learn even more about data?
Available to free download, the e-book Data analysis in business: a step by step towards a data driven culture
