A common notion regarding business decisions has been to always rely on gut feelings and intuition. Although very popular at one time, this notion is not well suited for the business climate of today. Big data has taken the world by storm, and for good reason. Companies are realizing the immense value associated with data and how it can transform their business operations. With this realization, the use of data-driven decision making among companies increased by 12% within 2 years.
What is Data Driven Decision Making?
As the name suggests, this process entails relying upon data- in the form of facts, numbers, statistics, reports, etc. to make business decisions.
This process is a sure-shot way to make the right decisions because it is free from personal judgements and prejudices, and the margin of error that is always associated with human-made decisions. If you let data rule your decision-making process, you can be rest assured that you will always be heading in the right direction.
Such assurances become even more vital in the case of growing businesses. As they are in the initial stages of their growth and expansion, they do not have any room for error. Every decision for SMBs, whether in terms of products, personnel, budget allocation, etc. must be targeted and precise. Thus, using data in the decision-making process becomes even more crucial for small businesses. Let us explore some of the other reasons that make this statement hold true.
What is the importance of Data-Driven Decision Making for SMB’s?
As mentioned above, the backing of data increases the credibility and effectiveness of business decisions. The use of data also allows business decisions to be made 5X faster. Growing businesses benefit immensely from this, as their success in the growing stage is directly linked to the outcomes of their decisions.
Here are some of other benefits of this method of decision-making:
- Helps in providing an enhanced customer experience
Data will give you an accurate picture of the demands, preferences & pain points of customers. Using this, you can personalize your approach towards customers and make decisions that will benefit your business, as well as your customers. 71% of modern-day consumers prefer businesses that offer such customized solutions.
- Helps in identifying new business opportunities
Data-driven decision making helps in identifying potential new avenues for businesses. By gathering and utilizing insights from historical sales data, consumer data as well as market trends, small businesses can discover opportunities that would have otherwise been missed.
- Optimizes costs and enhances revenue
These are perhaps the most important benefits for small businesses, as they help businesses tackle challenges like limited budgets and lack of steady revenue. Data will give you accurate facts about the areas where you need to divert more sums, and also identify the operations for which you are overspending.
The role of Sales CRM in Data-Driven Decision Making
CRM is a software system that tracks and manages the end-to-end interactions of businesses with their clients. While this is the primary function of such a tool, its benefits extend far beyond the management of customer relations. Its use is beneficial for all types of enterprises, but sales CRM is especially the best thing for small business growth. It helps in diverse aspects of their functioning such as:
- Capturing and managing leads
- Tracking the pipelines of every sale
- Automating redundant and time-consuming tasks
- Improving customer service etc.
However, CRM also plays an important role in enabling the proper use of data. Let us explore the ways in which SMBs can benefit from using CRM in their decision-making process:
- Creates an error-free and tamper-free database
If data is being relied upon to make decisions, it is essential for the data to be accurate. It is also essential for the data to be safely stored, as data security concerns are the reason why 34% of companies choose to not be data-driven. CRM creates a centralized and highly secure database, which is a reliable source to make informed decisions.
- Segregates your data based on metrics of your choice
Not every bit of data is required for every decision. Manually segregating the big data that your business generates, and locating the right data at the right time is difficult. However, with sales CRM, these tasks can be easily managed. Data can be automatically segregated and stored in ways that best align with your business requirements.
- Generates and presents insights from data
CRM does not limit itself to merely storing and segregating data for you. Instead, it also analyzes the data and generates usable insights from it. These insights are presented through reports, charts and other visually descriptive means which enhances the usability of the data.
- Allows you to track the effectiveness of your decisions
Making a decision is just one part of the story; what really matters is the effect that the decision has upon your business. With CRM, you can periodically track every part of your business, right from your sales to the working of your various team members. This way, you can track whether your decisions are bringing about any positive outcomes, or whether you need to revise your decisions.
Due to these factors, data-driven decision making is made better and more efficient with the use of CRM. The features and functionalities of such tools make it easy to collate, segment, and leverage the power of data to achieve the best results for your business.