Data-driven decision making is constantly making a buzz around the B2B industry. Data-driven organizations are 19 times more likely to be profitable than businesses whose decisions are driven by instinct.
Companies aware of it are leveraging it for their advantage while the ones unfamiliar with it have so many questions. What is it? How does it benefit the company? How do we use data to make better decisions?
Let’s have a look at what it is and why data-driven B2B companies see more growth.
What is Data-Driven Decision Making?
Data-driven decision making refers to the practice of using big data and analytics to make informed business decisions. With the advancement in technology, you can see what’s exactly happening in your organization and use the information to increase the probability of success.
Key Reasons to Choose Data-Driven Decision Making
By becoming a data-driven company, you:
- Gain a competitive advantage: Data allows you to reach the right customer at the right time through the right channel, increasing the chances of conversion.
- Get to know your customers: Data-driven companies are customer-focused. From onboarding to purchasing, they get a deeper insight into their customer journey. This helps them understand how each customer converts, allowing them to create a tailored strategy to boost the conversion rate further.
- Identify new or missed opportunities: What’s merely a feature for you might be very crucial for your customers. Without data, you won’t be able to understand what your clients like and what they don’t. This helps your company grow and improve regularly.
- Meet market demand: Data makes it easier for businesses to forecast their ability to supply and meet the demand of the industry.
- Improve transparency and accountability: Collecting data and using it for record-keeping and compliance can significantly improve accountability within the organization. When it comes to transparency, data-driven decision making ensures every information is prioritized, and the overall results are measured accordingly.
- Understand what’s working: Not every decision is right, but with data on your hands, you get to know what’s working in your favor and what’s not.
The Art of Data-Driven Growth Hacking
Data-driven growth hacking is a combination of both conventional and unconventional marketing strategies powered by analytics. It involves end to end marketing for the entire customer journey (from awareness to loyalty). Here’s how it works.
- Collect the data: The first step towards being data-driven is ensuring that you’re collecting the right data. It includes how a customer hears about your brand (search engine, social media, etc.), what they do when they land on your website and their entire journey.
- Analyze the data: Which channels are performing the best when it comes to converting a customer? Where most of your prospects are bouncing back?
- Make informed decisions: Now that you have collected and analyzed the data, it’s time to make decisions that seem best according to the situation. For example, if your PPC campaigns are generating engagement but not converting enough people, you would like to re-optimize your ad copy.
Types Of Campaigns (End to End) + Their KPIs
From hearing about your brand to purchasing from you to coming back for more, data-driven decision making can help you in each stage of the customer’s journey. Here’s how it works:
- Awareness (traffic gen/visit rate): This is the stage where a customer first recognizes your brand. At this stage, most users are not ready to make a purchase. Therefore, you should be focusing on improving your visibility. Figure out their preferred channel (using analytics) and market them on those networks. Focus on KPIs, such as new traffic and visit rate percentage. A high percentage of new traffic indicates you’ve got a great marketing strategy. A visit rate is the number of people who visit your website in a given period.
- Engagement (session time): The customer learns more about you and has visited your website more than once. How long are they spending time on your website? If they bounce back as soon as they land on your site, then chances are they were looking for something else. Also, look at the pages they visit during their session. This tells a lot about what they are looking for.
- Trial (products tried per store visit/conversion rate): By this stage, the customer is fully aware of what you have to offer. They have started conducting some detailed research and are probably comparing you with your competitors. Check how many people visited your store vs. how many of them tried your product. If the ratio (visit per store/trial rate) is less than you expected, use analytics to find the reason for it.
- Conversion (cross channel basket rate): How many people who did try your product are paying after their free trial has ended? If the ratio is too low, chances are they were expecting more from your product. Use data to find what did they use the most during their trial period and then make changes to your product accordingly. You can then re-market your product to them to increase the chances of conversion.
- Loyalty (revisit rate/lifetime value/# of referrals): Loyal customers are the ones who re-purchase from you regularly. They are more likely to refer you to their friends and colleagues. You can get this information by analyzing the revisit rate, calculating the lifetime value, and the percentage of referrals.
B2B Companies Using Data To Make Decisions (Case Studies)
Vestas, a wind-turbine manufacturer, was struggling to increase its customer base until it started using customer analytics to create a campaign targeted to the C-level executives of Fortune 500 companies. After careful customer-decision-journey analysis, they got to know that the busy CEOs are more likely to engage if presented with targeted data that addresses company-specific issues. So, Vestas partnered with Bloomberg BusinessWeek to deliver a series of inserts filled with company-specific data that highlights the benefits of wind energy. That data-driven targeting campaign helped Vestas increase the conversion rates by ten times.
Calm, an app for meditation and sleep, sells itself as a perk for employees at other businesses. However, they couldn’t understand what features were driving customer retention. Calm partnered with Amplitude to get deeper insights into customer data. They found that users that set a daily reminder had 3x the retention as others. Calm then used the information to make a product decision that resulted in a 3x increase in user retention.
Becoming a data-driven company is a little difficult but completely worth it. It helps you reach your potential customers at every stage of their journey, increases conversion, and enables you to gain a competitive advantage. If you haven’t started utilizing data, now is the time.