6 Things You Should Know About Data for Your Online Business
Businesses everywhere are using data science to advance their business goals. Data is collected and processed daily, delivering meaningful content that helps businesses understand concerns, customer experiences, supply-chains, and other aspects of business.
Understanding this information helps businesses interpret a client’s wants, needs, and how best to supply it for them. Data science is all about connecting business leaders with their customers and helping businesses maintain a stronger following.
Although data is a buzzword among today’s businesses, most startups and small business entrepreneurs don’t fully understand the concept or what it can do for them. Even those that operate almost exclusively online struggle to make the connection. If you’re one of those businesses, here are a few tidbits every business owner needs to know about data.
1. What is it?
Data simply describes facts and figures that computers can process and analyze. Every digital interaction produces raw data, from your Google search queries to your shopping patterns to your social media posts.
But raw data is disorganized, and business owners need the proper knowledge, skills, and tools to properly analyze and use it. This analysis adds context, relevance, and purpose to otherwise random information and can be helpful to a business.
For example, you have to analyze months of daily sales data to discover purchase trends and patterns, such as peak shopping days or the biggest-selling items. It takes some work, but the performance results are well worth the effort.
2. Why is it important?
When properly utilized, data analysis helps your marketing campaign. Annually, companies all over the world spend billions on advertising, and gathering and analyzing data makes their campaigns are effective. It raises the chances of marketing efforts producing a high return.
Data is also used to identify problems that can be rectified. A 2010 research study by the University of Texas found that companies that made small improvements to data quality, usability, intelligence, remote accessibility and sales mobility could make great financial returns. The company’s annual sales were also increased by 14.4 percent if it’s usable data was increased by a mere 10 percent.
3. How is data generated?
Most consumer data is collected from our digital interactions. We live in a world where almost every device we own is connected to the internet and even the most simple tasks generate data, including shopping apps or GPS maps. Every time you use an app or click on a website, you create information companies can collect.
4. What types of data are most useful?
The two main types of data are structured and unstructured. Unstructured data contains numbers and facts that have little meaning.
Structured data is the data we can actually use. Almost all structured data is obtained through our internet interactions and is classified as:
- Personal data: information that pertains to you, such as your name, email, or credit information
- Transactional data: generated when you click on an ad, visit a website, or make a purchase
- Web data: information in the public domain such as data sold by other companies, published government data, sports statistics, social media, and the like
- Sensor data: generated from cell phones, tablets, smart watches, health trackers, or even external building sensors
Computer programs will analyze structured data and turn it into actionable business insights.
5. How do you extract data?
A great way to extrapolate data is to hire a data scientist, which Harvard Business Review says is “the sexiest job of the 21st century.” Data scientists can create and employ programs that will skim the internet for relevant data, as well as help you interpret and present the data to your company.
If you cannot afford a data scientist, try a data analyzing tool such as Google Analytics. These types of tools are free or relatively inexpensive and can be easily manipulated for your purposes. By customizing your data collection, you can define your most important data and find other sources that you may not have had access to before.
6. How do you properly manage it?
Data must be properly managed for it to have any effect on your business. This means incorporating the information into your day-to-day business practices. Educate your staff on data collection and how to use it. Set up regular training meetings, send your staff to seminars, or require them to take online courses.
Machine learning systems are another effective tactic to manage your data. A machine learning system can learn, adapt and improve its productivity based on the information it’s fed. Siri, Google Maps, and Cortana are good examples of machine learning systems.
It’s also important to collect and organize your data so that you can monitor it. A good reliability centered management (RCM) tool is a valuable asset for any company hoping to harness the power of data.
Everything we do on our electronic devices generates data. Understanding it a little better can help you bring greater insights into your own company. The effective use of data can mean the difference between success and failure for any online business.