Why Data Reliability is Key For Your Business

data reliability is important

It may feel like it should go without saying that you want your data to be accurate. However, you’d be surprised how many businesses don’t work with reliable data. And simply put, data reliability is essential for your business.

Think of it this way. If you’re working with unreliable data, how do you know if the decisions you’re making are the right ones? Being data-driven is what helps you make the educated decisions that benefit everyone involved.

Throughout this blog post, we’ll walk you through what and what not to do when it comes to data reliability and how to ensure your data is reliable. Let’s dive in.

Why you should be data-driven

Before taking the leap into finding reliable data, it’s important to understand why it’s so important to be data-driven. Think of it as making informed decisions. You start with a hypothesis, do the research to find data to confirm or deny whether the hypothesis is correct and analyze the results. It’s scientific! However, you can’t skip the steps of finding and analyzing the data, as you’d be making a conclusion on a lack of information. 

Data-driven companies are growing at an average of more than 30% annually, according to a Forrester report. Simply put, data-driven companies are more effective at utilizing the information at their disposal and acting on that information in ways that are beneficial to their business. 

By making data-driven decisions, you’re ensuring the decisions you make are defensible as well as effective. So if the path you took doesn’t work out, you have a step-by-step understanding of the process that took you there and why those specific decisions were made.

More likely the decisions will work out because you followed the data that pointed you in that direction. When you make the right decisions, your return on investment is higher and you’re  more successful overall. 

Make sure to check the validity of the data you’re collecting along the way. You want your data to be clear and accurate; otherwise, your conclusions will be incorrect. We’ve gone through some examples of why being data-driven is important, now let’s take a peek at an example of what you should not be doing. 

Anecdotal evidence is a no-no

Anecdotal evidence is one of the great pitfalls in data reliability for various reasons. 

Let’s say you’re trying to find a barber. Your friend swears by theirs, telling you they give perfect haircuts and are really efficient. However, everything you’ve found online says the place is a mess, service is poor, and haircuts come out much differently than the customers want. There is an aggregated rating based on thousands of customers and it’s negative. Which set of data are you going to follow? The friend’s anecdotal evidence, or the collective data? If you want your hair to look good, you should trust the more reliable data set: the thousands of reviews.

As a business, it’s easy to say “my customers love this product” and move forward because you got a few off-hand compliments. However, the real measure of success is in the data. Having numbers that say that the majority of your customers highly rate your product will always be more valuable than a few people. (Despite how good it feels when you get individual compliments!) 

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Those are just a couple of examples of anecdotal evidence. While you may believe your experiences to be universal, they are instead simply your experiences and do not represent larger data. Data must be collected and analyzed without any bias involved to be considered accurate. 

How to be data-driven

Being data-driven doesn’t simply mean having reliable data and working with it. There’s far more to do to be considered a data-driven business. Consider what you do with the data once you collect it. How are you analyzing your data and ensuring it’s not only reliable, but you’re making the best possible use of it?

Being data-driven starts at the top. You want those in charge to not only be in favor of collecting the data, but also analyzing it. Once everyone is on board, utilizing the tools at your disposal will go a long way towards helping you to be more data-driven.

Consider using a free tool such as an abandoned cart email template to determine how often people are leaving items in their carts and how often you’re recapturing them through your email campaigns. That’s the type of key data that will help you grow your business and make more sales.

Another example is estimating the ROI for your next event. Rather than taking a blind attempt at understanding what the ROI will be, use data to forecast and help inform your event strategy.

There are always tools at your disposal to help you follow the data and gain findings from it. As we talked about earlier, understanding the resources at your disposal and making the most of real data rather than anecdotal evidence will help you make more informed decisions and succeed as a business.

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