Business data: with great power comes great responsibility


Welcome back to Leader Talk! In episode 35 we spoke to Annette Slunjski, Managing Director at the Institute of Analytics Professionals of Australia and the founder of Lucidity Marketing Communications.

Over the past 20 years, Annette has been specialising in B2B marketing, growth and technology to enhance the strategic position and success of blue chips and startups. As a results-driven person, Annette believes in ‘strategy first’ and market data analysis. 

In this chat we spoke about how businesses can harness data analysis, and more importantly, how businesses can and should use their customers’ data responsibly.  

Want to learn more? You can read or listen to our chat with Annette on YouTubeSpotifyListen Notes, or Player FM. It’s also available anywhere you listen to your favourite podcasts via Buzzsprout.

Authored by Annette Slunjski, Managing Director at the Institute of Analytics Professionals of Australia.

In today’s business climate, it’s almost impossible for your business to grow if you’re not measuring how different factors of your business are performing over time. Data has become the driving factor.

But, if you’re like most people, you think data is all about maths – which means you personally don’t need nor want to care about it. Trust me, I get that. However, business data is not about making complex calculations from thousands of numbers – we have computers and spreadsheets to do that for us. Business data is really about logical thinking and decision-making.

Imagine you’re crossing a busy road. You stand there, watching the cars that are moving, and naturally, start to decide when it’s appropriate to cross without getting run over. You are analysing data. The cars driving past are your data and you’re making a judgement based on your past knowledge on how fast the cars should be travelling and how much time you have to cross the road. Those calculations you’re making is you processing data. 

It’s the same for running a business. No matter what industry you’re in, once you recognise what data you have and start to measure it, you have the power to make informed decisions on your next best move. 

Why your business needs data
In PwC’s 2022 Digital IQ Survey, 65% of business leaders were able to improve decision-making through better analytics, which helped them realise better customer experiences and business continuity. How? By taking some of the subjective out of your business decision-making.

Data tells the hard truths we may not want to hear. For example, you assume last year’s campaign strategy will work again, but the data is against this. Would it make sense to then go ahead with the strategy? When you feel something is the right thing to do for your business, data will be there to show you whether or not it makes sense. Two out of three leading marketers believe data-based decisions are superior to gut instinct. It’s an objective and factual tool that lets you make better decisions, reduce costs and increase profits.

Take Lenovo’s recent ‘Just Watch Us’ campaign. Based on their market research and consumer data, they learned their Gen Z consumer base valued sustainability more than any other generation. They based their product development and marketing decisions on this insight and built their new series of laptops with vegan leather, recycled aluminium, and responsible packaging. 

Insights like this on your customer demographic and purchasing preferences will make all the difference to your business’s success.

How to extrapolate business data
To get started all you need is the data and a curious mind. Start simple. Take an assumption you have about your business and use the data to test it. If you think your busiest day is Saturday, find out the average revenue per unit sold for each day of the week. Is Saturday the winner? If it is, you can use other data to figure out why this is. If it’s not, you can also use more data to understand why some days are busier than others and use this to boost sales on those days. 

Analysing data is all about the why’s and how’s of your business. It’s about identifying trends and understanding why something is happening so you can make mitigation plans. 

Explore what your business could be, from what it is now. Regardless of whether your business is online or in-store, you can easily measure staff – how many there are, how much do they cost, or is there one driving more sales than the other. You can also know your customers – where they are coming from, how much they spend on average per person, and what they spend on. Of course, you can also measure revenue, expenditure and more.

When spreadsheets don’t cut it anymore, that’s when you can bring in expert data analysts to make sense of your never-ending data!

What to do with your data
Data won’t tell you to do this or change that. It will only give you the trends on factors you choose to measure. It’s then up to you to look at it and decide on what to do next based on your experience and intuition. It still needs that human touch.

The Pareto Principle, or 80/20 rule, says that 80% of your revenue comes from 20% of your customers. This means that if you focus on the right thing, even if it’s small, it will have a big impact. How do you find the most advantageous thing to focus on? Data! If you find out that younger customers are consuming the most of your product or service, you can then focus on marketing to the younger generation. You’d generate more revenue than you would spreading yourself across all generations and your efforts won’t be in vain. Alternatively, there might be a rich revenue stream hiding in a segment within the other 80% of customers – it just needs a tweak to the product offering.

Every resource you have has a Return on Investment (ROI). Data can tell you where your biggest costs are and what is generating revenue, showing you what to focus on so that you’re getting a high ROI on your resources and, more importantly, your time. 

How much are your tools costing you to maintain? When does their maintenance become so great that you’re better off buying a new tool? Through data analysis, you can know whether you’re better off paying additional costs over time or if you save more money buying new tools.

Is your advertisement on Google Ads bringing in more money than you’re spending? What trends do you see? From where? Are customers going to your site then leaving? Are they going to the prices page then leaving? What is the data telling you and what decisions will you make based on that? Mapping the customer journey and identifying areas you are unable to convert consumers is critical to improving your customer acquisition strategy. Use the data to identify key areas and then start experimenting to adjust to get better results.  

The most popular use of data collection is identifying customers. You know their names, address, contact information, age and occupation, and communication preferences. You know what they purchase and when.

You can tailor your business to each segment and target them with personalised marketing for lead generation. A segment of consumers find it annoying when ads are not personalised to their interests and shopping habits. They want more personalisation. If you’re going to take their information, then use it to make their experience with your brand more relevant. However, be careful – there’s a fine line between personalised and just plain creepy.

The fine line in data analysis
That’s the double-edged sword – many people like personalised advertising, but not if it breaches their privacy. There’s a fine line. The advantages of personalised advertising should be balanced with its responsibilities. With great power comes great responsibility. 

When customers provide their data, even an email address, it needs to be treated with respect and used for the reasons it was given. There are many laws in place to ensure responsible use of data. Those email newsletters you send out are subject to privacy laws and spam laws that specify opt-out obligations, for example. 

The second you collect data and information, you need to protect it. Respect this data and the customer, otherwise you face heavy fines, low customer retention and a bad reputation.  

Think about how your customer will feel about their privacy and respect it when you engage with them. Every customer segment will react differently so you can always test to find the balance between personalisation and comfort. Sometimes it’s best to lose out on relevancy for the sake of your customer’s comfort. 

Using business data has become the standard when running a successful business. While data gives you a clear picture of your business and where it’s headed, it just provides the inputs for a decision you make on what to do next.

Data gives you amazing power to grow your business, but it is a decision-support tool. It’s up to you to make the decisions when it comes to what you will do next. Stay curious and keep asking yourself, what can I learn from my data today?