The business world is never idle. In any given minute of any given day, customers are buying the kinds of products and services you sell – and hopefully from you. We’ve written extensively on how business decisions should build through a process of identifying relevant data, analyzing trends within those data points, and responding with intelligent market activity. But how do you go from drilling down to granular data points to turning those points into big ideas? Working from the point of sophisticated data analysis gives you the best opportunity to make the right big planning decisions for your business to perform well.
Collecting and Aggregating Data
The first step in an analytical approach to business planning comes with identifying the right data points. What this means for you depends on your business and business model; as the Harvard Business Review notes, it is not about using Big Data or small data, but instead finding the right data to fit your company. As we’ve previously discussed, there are thousands of data points (if not more) you can look at. However, the data you need depends largely on the problem you are trying to solve. For example, if it’s fending off a competitor, understanding the price points and features of where they succeed or fail would be data points that it would be ideal to start with. If you’re looking to expand your market reach and find new customers, identifying the demographic breakdown of customers in your industry can help you target marketing efforts to a largely untapped market.
In the power tools space, for example, you may be looking for ways to expand your marketing reach. Drilling down to more granular data points can help identify opportunities. For instance, if you find you or your competitors gain the vast majority of sales from men, it may surprise you to learn of TraQline data showing 21% of power tools shoppers are women shopping on their own. This potential gap in your marketing can serve as a starting point to grow your customer base.
Track Trends and Account for Outliers
But what if a singular data point does not represent what the market typically generates? Data analysis does not consist merely of finding the most recent information. When you track these points over time, you can identify trends on which you can capitalize. A steady increase of power-tool shopping by women over several years should inspire a higher level of confidence in responding to that trend than a steadily low share for women with a single spike.
If that spike comes, you should again drill deeper. Look at whether competitor actions have created a spike; it could be a latent market is waiting to explode. Follow that point over time to see whether it is in fact sustainable. Don’t read too much into an aberration in otherwise consistent market trends.
Of course, remaining in analysis mode creates its own potential problems. When you collect and analyze data points and trends, it’s important to aggregate your findings so you can build a larger strategy. Sometimes these findings may seem disparate at first, but taking a step back, and sometimes even looking for an objective point of view, may help weave together the story of the marketplace. Remember that the goal of gathering and analyzing market data is not merely to gain an understanding of the market in which you operate but ultimately take the right actions to capitalize on that market.