How do You Improve Your Business Decision Making?
When I left the corporate world my awesome team that I was so close to gave me some presents to remember them by.
One present they gave me that really stuck out was a mug with the words “Show Me The Data” in big letters on it.
They said it was the perfect summary of working for me because I was always looking for data on key decisions to show the way forward.
I was flattered!
And they found this a great lesson.
When you are dealing with millions of dollars of spend you need to get it right.
Before I went into the corporate Sales & Marketing world I actually graduated from University with a degree in Microbiology and Immunology.
Those years at University completely converted me into a data geek.
Well, Scientists only know one way to do things – develop a hypothesis, test the hypothesis and let the data set you free.
If you are going to find a cure for cancer you need to have this discipline of testing and examining the data to find the solution.
Otherwise you are simply guessing and risking lives.
My biggest takeaway from my Science degree was this strict testing and looking at the data regime.
It makes business decisions so much easier and keeps shareholders happy!
So, what’s my process to apply these lessons to my business?
Here is a high-level overview of steps I use to go about the key decisions for my business and my clients:
Step 1: Implement data gathering strategies.
This can be complex but fortunately, thanks to Google, there are some great tools out there that can provide amazing insights into your online business.
Step 2: Develop a clear hypothesis from the data you have.
Once you have the data dive deep into it. What key trends can you see? What should you expand or do more of? What should you stop doing?
Most importantly, what should you test to deliver business growth?
Step 3: Develop tests.
Notice “test” is plural. If you have an idea that could improve your business come up with some variations to test. Imagine if you ran a test on just one variation of your idea and it failed. You might fall into the trap of thinking it was a bad idea when in reality you needed to keep testing to find the right ingredients for that idea.
Step 4: Look at the result of the tests.
Which tests worked, which ones didn’t.
Don’t make the mistake of not even looking at the tests that didn’t work. I always look at these first because there are valuable lessons in them. They’ll save you money by avoiding these mistakes in the future.
For the tests that worked, why did they work?
Importantly, take the tests that worked and change one thing in those tests and retest.
That will result in an even better outcome.
If you follow this process you’ll be surprised how easy it is to convince your shareholders, boss and most importantly yourself on the best way forward.
It’s always difficult to argue with the data!
So what’s an example of this process.
Buying Facebook ads is a perfect example.
I see so many agencies just developing one ad for a client and “seeing how it goes”.
Unfortunately, it leads to hit and miss marketing and unhappy clients.
You see, most Facebook ads don’t work. That doesn’t make Facebook bad. Facebook is an amazing marketing opportunity for businesses, but you need to have the right scientific process to generate that best chance of success.
If you aren’t testing multiple versions of a Facebook ad you are doomed for failure or you need a lot of luck.
Now, beware one critical point.
It’s easy to get lost in the data.
Sometimes I see paralysis in business owners who have setup data gathering strategies and are just overwhelmed with the new insight they have into their business.
Kind of like drinking from a fire hydrant
While I always encourage every business owner to know their numbers it’s really important to develop the discipline to work out which data is critical, and must be watched constantly, and which data is good to know.
Remember a few key rules if you find yourself stuck in this data overwhelm trap:
Rule 1: 80/20
20% of the data will give you most of your insights. Work out which data is key and focus on that.
Rule 2: Don’t wait for perfect data
While I’m a data geek I know that sometimes you won’t have perfect data. And while I’m always wanting perfect data it can sometimes be just as bad to wait and not make a decision.
Make sure you have something statistically significant (try this statistical significance tool) and make a decision. Procrastination can hurt you.
So, are you using data to drive your key decisions?
If you need any help using digital to grow your business see below for a free strategy session (when available).