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Business Insights: Why You Need More Then Data Analysis To Get The Full Picture?

Business Insights: Why You Need More Then Data Analysis To Get The Full Picture?
A universal change that is evident in this day and age is that Companies are relying more and more on data analytics to support their strategies and initiatives. This has become even more apparent as businesses' focus shifted to their online presence.

Data alone is not enough

In many ways, the fact that data analytics is not enough is a good thing. That's because data alone cannot tell the whole story or paint the full picture of a situation at hand.
If you rely only on data regarding a company's marketing efforts, customer base and key performance indicators, you could end up making decisions that are not fully in the best interests of the business. In order to operate from a position of being completely informed, data must be accompanied by additional information, including a competitive analysis, as part of the process. 
Suppose, for example, a company is considering a brand-new offer that is supported by the data, which depicts that accepting said offer will result in a successful outcome. In addition to the data, certain questions must be answered:
  • Are other companies already successfully offering the same product or service?
  • If so, what is the market share of the product or service?
  • If other companies are not already successfully offering the same product or service, is there a compelling reason why the market either would or would not accept the product?
  • Does it make sense to offer a competing product at this time?
Additionally, the Privacy concerns of users are imperative to not only consider but also address, making it unwaveringly important that companies train their employees and teach them how to handle sensitive information.
4 Keys to a Successful Data Strategy
  • Data invitation
  • Data security
  • Data dialogue
  • Value proposition

Data is [Absolutely] integral for success

While data is not everything, it is not nothing, either. From artificial intelligence-driven systems that allow for personalization and drive productivity to data collected via social media platforms and predictive systems that identify problems before or shortly after they arise, data is undoubtedly an integral part of life today. 

Perhaps the most valuable aspect of data collection is also the most problematic: the nature of privacy and how the data that is being collected is being used. Gone are the days in which data could be collected without much thought about doing so. Nowadays, concerns about the protection of consumers' privacy and speculation as to how companies are using the data they collect from users have resulted in strict government regulations. 

For instance, there's the European Union's General Data Protection Regulation. While the United States has not enacted any regulations at the federal level, some states have taken it upon themselves to pass state-level laws. Similarly, certain tech companies have initiated actions and taken steps to protect the privacy of their users. 

As a result, third-party cookies are being phased out, despite having been in place since 1994. Apple already has omitted its use of third-party cookies, whereas Google intends to do so by 2023. The result of the decision to obliterate the frequent and normalized use of cookies will be that advertisers and websites no longer will be allowed to utilize the power of tracking technology to follow users as they scour the internet. 

All of this is happening just as businesses are moving more and more of their operations online. Since online businesses rely on data to connect with users, they must create a new strategy that allows them to gather the first-party data they need to grow and thrive, while at the same time being in compliance with state laws and making users feel comfortable.
Strategies of this nature must combine better technology with a deep and trust-based relationship that companies develop with their users over time. Such strategies generally have four parts:
  1. Data invitation. Many data invitations are deceptively simple, and most of them are along the lines of "Please accept our data policy in order to use our website." In the developing data use environment, companies need to create an explicit, easy-to-understand and personalized message that is clearly visible and delivered through multiple channels.
  2. Data security. Customers should have access to details about the type of data that is being collected from them and how it is being used by the company. By prioritizing this level of transparency and pairing it with the option for users to opt in or out of certain aspects of the data collection process, companies can establish trust between the brand and the customers. This is beneficial in many ways, namely that users who trust companies are more willing to opt in to the option to share their data as opposed to users who are hesitant about the brand. To summarize, users should be permitted regular, ongoing and transparent access to the list of data. Also, any updates that are made must be reported as soon as possible.
  3. Ongoing data dialogue. Companies should provide regular communications about their data privacy protocols. Doing so will subsequently promote user engagement and establish high levels of trust as a result of transparency.
  4. Value proposition. Users must be able to clearly understand the benefits of sharing their data and sensitive information with your company. This is not always easy, especially because certain states, such as California, have laws that prohibit companies from excluding from discounts or services users who opt out of sharing their data. Due to the restrictions imposed by state laws, companies have to learn how to be innovative. For instance, companies can say the data their customers provide to them will help create a much better and more personalized experience.
Before you can make smart and well-informed decisions, you must compile a holistic review of all pieces of information that have the potential to impact the end result. Companies that understand that will have an advantage over companies that do not.

This post first appeared on Growth, Profits, & Wealth Blog By Travis Raml, CPA, please read the originial post: here

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Business Insights: Why You Need More Then Data Analysis To Get The Full Picture?


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