Data-driven Approach Benefits

Bringing it all together

Applying a data-driven approach to building products allows us to bring our team and stakeholders into alignment with the priorities we set and make us confident in the decisions we take. Some of the key benefits of a data-driven approach to decision-making are:

• We’ll be more certain of the decisions we make: Once we start collecting and analyzing data, we’ll probably find it easier to make confident decisions about almost any business challenge, whether we’re deciding to launch or stop selling a product, change our marketing message, expand into a new market, or do something else.

• Data performs multiple roles: On the one hand, it lets us compare what we have to what already exists. This helps us understand how any decision we make will affect our product roadmap.
  Beyond this, data is logical, repeatable, and concrete in a way that gut instinct and intuition are not. By taking out the subjective parts of our business decisions, we can give ourselves and our company more confidence. Because of this confidence, our organization can fully commit to a certain vision or strategy without worrying too much that the wrong choice was made.
  Even if a decision is based on facts, that doesn’t mean it’s always right. Even if the data shows a certain pattern or points to a certain outcome, any decision based on the data will be wrong if the way it was collected or interpreted was wrong. This is why the effects of every business decision should be measured and kept track of on a regular basis. Oftentimes, there is insufficient data and we are not able to reach statistical significance. In such scenarios, we can identify the need to capture more data before we can draw actionable insights.

• We’ll start to take more initiative: When we first start using a process that is based on data, it is likely to be reactionary. Make sure to complement the data available to us internally with data we can get for external factors such as the changing market landscape. This data tells a story, which our product strategy must then respond to.
  Even though this is useful in and of itself, it’s not the only thing that data and analysis can do for our business. With enough practice and the right kinds and amounts of data, we can use it more proactively, such as by finding business opportunities before our competitors do or spotting threats before they get too bad.

• We’ll be able to save money: Among the many reasons why a business might decide to put money into a big data project and try to make its processes more data-driven, cost savings tends to be a prominent one. Making smart decisions based on the most accurate and up-to-date information is quickly becoming the norm.

Data-driven decision-making makes it much faster to find a threat or challenge and figure out how to deal with it. This makes it much less likely that the threat will hurt our business. Analytics can also help figure out how internal operations and processes work and find ways to improve them that might not have been seen otherwise.