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A Beginner’s Guide to Using Data to Grow Your Business

A beginner's guide to using data to grow your business

Why is data one of the scariest four-letter words of the 21st century? Because hips may lie, but data doesn’t – it simply reports facts. Business data can be a powerful tool for growth. If you’re unsure what data you have or how to use it, this guide will get you started.

Work smarter with data

If you’re running a small business, chances are you haven’t stopped to think about how data can help your business grow. We understand that running your own business is often two full-time jobs squeezed into a seven day work week. But using data to drive your decision-making can help you work smarter instead of harder and the great news is – using data is easier than ever.

Data: the cure for decision fatigue

Business owners will be familiar with that feeling of deep, burning frustration and despair when your to-do list keeps stacking up and a headful of decisions need to be resolved immediately – it’s called decision fatigue. Fortunately, data can help. Data’s greatest strength is acting as a source of truth. Trusting your gut can work, but while your gut ‘thinks’, data knows, which is why you should test your assumptions against data.

How to use data to your advantage

You’re already making decisions based on your best judgement. Maybe you’ve tested your decisions, usually they’re based on your experience and expertise. The problem with human intuition is human error. We’re susceptible to biases, decision fatigue and we make mistakes. Then there’s data – indefatigable, resolute and objective, which is why you should test your assumptions against data. Here’s how to use data to help your business grow.

1. Decide what to test
Maybe you have a hunch on how to directly increase sales, or increase order value, or a new customer journey on your website. Once you start writing a list of tests, you’ll realise there’s a lot you can test. Choose one and define Key Performance Indicators (KPIs). E.g. If we add a ‘shop now’ button to our homepage, we will increase sales.

2. Gather data
Using business software (like XERO) and online reporting (like Google Analytics and social media analytics) you can gather financial data and behavioural data.

3. Analyse and review results
After allowing the test to run for a set period – maybe a month is long enough, maybe you need more data and therefore a longer test period – review the data. Has there been a significant increase in sales after adding the button to the Homepage? No? Try to workout why. Then test again, or test something else.

4. Keep testing
There’s always something you can be testing. Keep testing, keep reviewing, keep refining. The beauty of testing online is the risks are relatively low and any negative results can be mitigated quickly.

1. Deciding what to test

Chances are you have some ideas on how you can grow your business.
You’re probably testing something right now. It’s worth asking why you have chosen to put time, money and resources towards that solution. Testing your assumptions and decisions is important and easier than ever. Once you have identified a growth opportunity, establish how you are going to test it. Start with the basics and you can go more complex once you’re more familiar with data. Ensure you’re measuring one variable at a time. If you try to change three of four things at once and you successfully increase growth, you can’t be sure which factor caused it. Separate each variable into a seperate test, as below.

E.G. If you want to increase your email database so you can send out a newsletter to your customers, you might start by adding a ‘Sign up’ box to your homepage. You can measure that by the number of new subscribers you get. You can even use Google Analytics to see how many come through the Sign up box.

2. Gather data (and set up reporting)

How easy is it to capture data? The short answer is, it depends on what you’re measuring. If, like the example above, you’re measuring a simple metric like the number of email subscribers – the data is simple. Between your business data and online data, you can test and measure a lot of different growth strategies relating to financial growth and customer behaviour (like site visits and conversion rate). As your tests become more complex, the challenge becomes ensuring the measurement accurately assesses the test. So you can measure whether your tests are working, you need something to compare it against – baseline data. If you are reporting weekly, use as much historical data as you have to establish a weekly average. You can then compare growth against that baseline data.

3. Analyse (and review regularly)

Now that you’ve established baseline data, you can set up your tests and accurately measure them. If you’re busy, analysing and reporting once a month is probably plenty. So you check in on your data once a month and measure it against your baseline data. Whether your tests are providing positive, negative, or no results – it’s important to act. If your tests are working – great! Can you increase the growth even more? If it’s not working, can you work out why? If the test isn’t affecting the data at all, test another variable, or maybe it’s time to move onto another test.

4. Keep testing (and growing)

Now that you’ve set up monthly reporting and reviewing, ensure you keep testing. If you’ve tested your way through different variables of the same test, why not look at testing something else? While you’re running these tests, remember to check that your tests are helping grow your profits too.


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