5 Ways to Use Data in Your Startup Growth Strategy

As a founder of a small startup, you know the importance of setting yourself on a trajectory toward massive growth. 

While there’s some value in intuition, the most successful companies utilize data in everything from marketing to financial systems. 

When you make decisions based on data, you can overcome challenges you might not have even known you’d face when you started your company.

How exactly can data lead to better growth? Let’s get into the power of data and how you can implement it into your startup’s growth strategy.

Why Focus on Data-Led Growth for your Startup?

With comprehensive, well-managed information collection and interpretation, you can use data to…

Reduce the effect of bias

According to the Driehaus Center for Behavioral Finance, cognitive bias affects more aspects of your business than you may realize. Cognitive bias causes us to skew information through specific lenses that impact the way we see the world.

When business owners can’t see or check their biases, they may make irrational, emotional, assumptive, and even habit-driven business or financial decisions.
With clear data at the ready, business owners can combat such bias, question themselves, and make more level-headed business decisions.

Increase business efficiency

Data helps you find areas of improvement so you can improve efficiency in various areas of business.

In a study conducted by the Harvard Business Review, companies relying on data to drive their decisions outperformed their competitors in operational efficiency by 23%.

Improve customer relationships

That same Harvard Business Review study we just mentioned also found that companies that make data-driven decisions saw greater success with customer loyalty and retention, outperforming their competition by 32%.

Data can help you find areas of improvement throughout your customer experience, which can boost repeat business and grow word-of-mouth marketing for your business.

Stay ahead of the competition

Speaking of competition, when you gather data on not just your company but also your competitors’ companies, you gain valuable insight into your market.

You can find the gaps in competitor marketing to better target your audience, learn about industry trends, and identify your competition’s strengths and weaknesses.

Mitigate risks, and their impact

As a startup, sure, you need to take risks from time to time. However, having the power to do a little research and gather a little data before making a big jump can increase your potential for reward while limiting your chances of more detrimental results.

Data can support your decisions, helping you to see all potential outcomes before taking a considerable risk.

5 Ways to Use Data to Influence Your Startup Growth Strategy

One of the most powerful tools at your disposal for reaping the above benefits? You guessed it, data!

Here are five strategic ways to wield data effectively and steer your startup toward hockey stick growth (hopefully). 

Define your objectives

We’ve all heard the term “information overload,” and when you’re a startup making moves to collect more and more data, you may head in that direction. Data overload can happen, especially if you’re collecting a lot of data but are unsure of what to do with it.

Data is simply lots of words and numbers, if you don’t have any intention behind it. So, before starting the collection process, define your objectives.

What goals do you hope to achieve with your data sets? What do you want to learn, and how do you plan to implement your data? These objectives make your analytics easier to understand and utilize for more impactful decision-making.

Test and reinvest in the right marketing strategy for your startup

Research from Econsultancy found that nearly two-thirds of marketing leaders who significantly exceed their business goals say that data is superior to gut instinct when making marketing decisions. With the help of detailed analytics, marketers can track their efforts to find what’s worth reinvestment.

Testing and reinvesting are critical parts of marketing growth as they optimize your performance and allow you to better target your audience. With detailed analytics on everything from your pay-per-click (PPC) ads to influencer programs, you can locate where to put your time and budget, boosting your growth.

Develop a robust data management plan 

A study by Oracle and author Seth Stephens-Davidowitz found that 35% of business leaders don’t know what data to trust. And, 72% said that the sheer volume of data coupled with their lack of trust in that data resulted in them not making any data-based decisions at all.

According to a Gartner study, inaccurate or outdated data costs companies an average of $15 million per year in lost revenue, so they’re right to be hesitant. However, as a startup owner, you don’t have the luxury to squander a bunch of cash on unusable data. Or, just stop trying to make informed decisions.

By adopting a robust data management plan, you can stop this problem from developing at your startup. By maintaining the accuracy of your data, improving your employees’ data literacy, and better organizing your data storage; you can reap the rewards of your data collection rather than running the risk of bad data costing you a huge chunk of change.

Track website data for a look into customer behavior

Your website might be deterring your customers. Yikes.

But, without tracking data, you might never know it.

A study by payment solution Splitit found that 87% of online shoppers would not complete a purchase if the checkout process was too long and complicated. You are literally leaving money on the table—or rather, in the shopping cart—if you don’t know that your checkout process is pushing customers away.

By tracking data on your website, such as how many people add items to their cart versus how many people complete the checkout process, you can find areas of improvement to boost the user experience. That refinement can increase sales, customer loyalty, and retention.

Utilize an ERP to track finances

Data doesn’t just improve your marketing and sales. As we mentioned, it can also be a powerful tool for making better financial decisions.

An ERP system can create a centralized repository for all business information, including financial. With it, you, your accounting team/firm, your CFO, etc. can gain an accurate view of your organization’s finances, streamline processes, minimize errors and fraud, accelerate processing for better cash flow, and maintain compliance.

Between the time and money savings and the insights into financial performance, the right ERP can certainly help you progress toward your startup growth goals.

Data and the Future of Your Startup

With all the data collection tactics that are available today, it’s easy to see why some business leaders don’t know what to do with the data they collected.

However, when you start making data-driven decisions early in your company’s existence, you set up a precedent of data literacy and integration.

Data can help you overcome the effects of bias, improve your standing in your industry, and boost customer relationships and productivity. With goal-oriented data collection in your corner when it comes to everything from marketing to customer experience to financial systems, you can set up your startup for growth.

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Bio: Jacqueline Gualtieri is a writer and editor whose work has appeared in The Huffington Post, Insider, and The Slowdown. In addition to writing, she works as a digital media consultant and content marketer, driving online traffic for her clients. She’s always looking to advance her skillset and believes strongly in the early adoption of new technology.