Data driven decisions are at the forefront of the Insights industry. No matter what form the data takes, within that data lies some very important figures and outcomes which are used to inform decisions.
Some would argue that the short of it is – decisions are impossible to make without data behind them. And they wouldn’t be too far wrong. The long of it, well - data driven decisions allow industries to grow, shaping their products, services, and ultimately, their future. Not just the decision itself, but everything leading up to that decision is likely supported by data. Data is empowering, it opens new doors.
Data Driven Success
Why are data-driven decisions better than ‘blind decisions?’ For starters, those decisions driven by data are more robust and clearer, whilst enhancing said decisions’ chances of success.
Why is this? Well, due to the data behind that decision, there is a solid, concrete foundation – which results in less chance of failure. The evidential nature of the decision makes it stronger. Some people would call this ‘proof’ or ‘evidence’ behind the decision. There are physical facts or figures which have been proven. With this knowledge, companies have the peace of mind whilst being able to support and justify their decisions. Without it, confidence would not be as high and outcomes could be risky.
|Data-driven decisions are the key to success, creating a solid foundation for all strategies big and small.|
Why not take ‘Shopify’ for example – (a well trusted, e-commerce platform used by Millions of the world's most successful brands). Without those data driven decisions, Shopify would not have grown to what it is today. Throughout the COVID-19 pandemic, data driven decisions proved useful at a difficult time as explained by Ella Hilal – Shopify’s Head of Data Science, Engineering, Revenue and Growth:
“The scale of our data provides us with a deep view into the commerce landscape, which enables us to create new experiences for our merchants. Experiences like offering funding to merchants without them having to apply, or using machine learning to categorize billions of products to ensure better product discovery for our merchants. In 2020, we saw the unique opportunity data provided during the pandemic."
"By tracking, learning from, and putting our insights into action, we were able to steer not only our company, but our 1.7 million merchants through an unprecedented time. We were able to use data to pivot our product strategy and offer experiences like buy online, pick up instore and extended Shopify Capital funding that enabled our merchants to not only survive, but thrive.”
Data can be presented and used in a vast variety of ways. Industry professions can turn insight data into gold! Not literally, but we can make data interesting, engaging, and meaningful to those who need it to inform their decisions.
Long and Short Considerations
Although data-driven decisions are highly beneficial, they do have some potential challenges to bear in mind.
Accuracy and quality are big contributors to the success of a data-driven decision. For example, too little data can be viewed as too weak and lacking in evidence to properly back a decision. Whereas, large amounts of data may lack that quality that companies strive for to make their data driven decisions. Data can be collected in a multitude of ways, from quick surveys to in-depth focus groups. But at the end of the day, it’s important to remember that quality is just as important as quantity – and that it largely comes back to the experience and knowledge needed to set out the research objectives which will provide that data, that will in turn inform those all-important decisions.
Planning can be another common challenge in data-driven decisions. Failing to plan out the research behind the decision can lead to equally poor outcomes from the decision, making it redundant. Behind the data driven decision is a parade of processes, including; research objectives, data collection, and analysis (to everything in between!). To ensure smooth data collection from beginning to end, make it a priority to consult industry professionals who can guide you through and reassure you when making data driven decisions.
Although data-driven decisions are suited to many companies and industries – sometimes they may not be the right informer of a decision. For example, smaller companies and brands with loyal customers may simply trust their own instincts or their trusted customers’ opinions more than the data itself. In cases like these, data can be supportive yes; but it should be carefully used.
How Market Research Helps
The short of it is: market research allows businesses to make data-driven decisions. Insight teams take any given objectives, goals and targets – and with the help of research projects and tasks, plus added demographic data - produces robust findings to support future decisions. Stakeholders need this data and cannot make decisions without it. Intuition/individual opinions are simply not enough alone!
Market research encompasses a variety of tools. From long term online communities to short surveys. All tools and formats are useful when it comes to collecting data, depending on many factors such as budget and timescales. They equip business with a path to generating data, whether this be on a one-off basis or a long-term basis where data is constantly being generated.
|While all businesses face a multitude of challenges, decisions formulated with the right data will help guide them through to success.|
Researchers can get data over to stakeholders effectively. Researchers can guide stakeholders and present the data in a way that makes sense, in a way that makes the data useful rather than over-facing and confusing. Data does not have to be dull and boring! We have a number of blogs on this website that include some very useful examples, like Maria Twigge's exploration of electrifying data.
Whilst all industries will continue to face challenges in todays’ climate, one thing is for certain; decisions formulated around data will remain a top priority for many businesses. Whereas perhaps the method in which data is collected may need to change for some depending on budget, resourcing, timescales and more – it seems that data will never be overlooked nor compromised.
Data driven decisions are always going to be at the centre of the Insights Industry. Industries rely on data to make their next move; it’s almost a failure before even starting to make decisions without any data behind them. Importantly, though – data is only effective when used correctly. With this in mind, data driven decisions need to be planned out well, and taken with context… with a pinch of salt.