As a business owner, you face decisions every day.  Some of them are easy: Do I need to add nice pants to my outfit, or is my “Zoom shirt” enough today?

And some of them are much harder: How can I find more customers when my marketing plan relies so heavily on face to face interactions?

So how do you make the more challenging decisions?  The strategic ones, related to growing your business, making pivots, training employees, finding new customers and so forth?  Do you shoot from the hip?  Go with your gut?  Let your instincts guide you? 

Or do you research, analyze, review, create decision trees, read studies, and let the data be your guide?

I’m sure you’re thinking I’m going to promote the latter, given my career as a market researcher.  But here’s the thing.  Despite my data-driven decision-making proclivity, I will acknowledge that a balance is key.  Of course I’m not the only one saying that, as anyone who has read “Thinking Fast and Slow” by Daniel Kahneman will tell you.

But how do you find the right balance?  How valuable is all that data?  And when is it too much data?  

You can find business advice telling you to focus on data and not to trust your gut, as this Harvard Business Review article did, bemoaning that “fully 45% of corporate executives now rely more on instincts than on facts and figures in running their business.”

But then, the Wall Street Journal counters, that “gut instinct, not data, is the thing.”

They are both right, to some extent.  And a good market researcher knows that it’s the combination of as much data as you can find, along with your own internal processing of that data, that leads to good decision making. 

The data doesn’t make the decision for you, it merely guides your gut instinct in the right direction.  As a matter of fact, I believe that your gut instinct when it comes to decision making at your business is really a combination of all the information you already know about your business, your customers and your industry.  It’s just already in your head, so it seems more like “gut” than “data”.

In that way, we can say that the data “feeds” your gut to help drive your instinct.  And just like your diet, it’s important that you focus on fresh and healthy options (aka recent and reliable options).  And don’t be afraid to look for new sources.

Let’s talk about some different types of data that might support your gut instinct when making strategic decisions.

  • Sales data:  What do you know about your customers and your suppliers already?  Do you reach out to them with questions or surveys to gauge satisfaction or to just get some honest feedback?  Do you have systems in place to capture this feedback and summarize or review it?  In working with SMEs I have found that the sales team typically is a wealth of knowledge about customers, but often that information is only stored in the heads of the sales force.  Can you capture their knowledge base in a different way that might help drive decisions about meeting customer needs?
  • Digital Marketing data:  This goes without saying, but most companies now are forced to rely on digital marketing more than ever, whether they want to or not.  The advantage of digital marketing over some of the more traditional marketing channels is that you have some actual data to measure potential customer interaction with your website.  Make sure your company is tracking this and making decisions based on this feedback.  Which pages on your site or posts on social media seem to get the most attention? Are you capturing email addresses of potential customers to follow up?  What works and what doesn’t when trying to engage customers online?
  • Competitor insights: Sure, everyone checks out the competitor websites, but how else are you seeking out information on what your top competitors are doing?  Have you set up Google Alerts?  Do you follow your competitors on Linked In, Twitter or Facebook?  How does their online presence compare to yours?  Are there any comment sections or reviews you can find about them to see where they might be leaving gaps that you can take advantage of?  What about employee comments on sites like Glassdoor?  Or information from your current customers who may know about your competitors?  Where can you find information to help you better position yourself against your top competitors?
  • Industry trends: Industry information about your own industry or that of your customers can also be a great resource when decision making.  There is no need to buy those super expensive market research reports.  You can find a lot of valuable information with just a little digging.  Try to find answers to some key questions: Is the industry growing or shrinking?  Why?  How many players are in the industry and are there a few who dominate?  What are some key trends in the industry and some leading indicators?  Much of this can be found through State of the Industry reports from trade associations and industry journals, and also through government sources like the Bureau of Economic Analysis.  And believe it or not, your local library (that’s my local library) can be a great source of online databases of trade journals that make it much easier to dig up this information than the old Google search.

Take it from this professional market researcher and feed your brain (and your gut) regularly by subscribing to relevant online resources, seeking out new information as it comes out, and optimizing any internal information to make it easier to find and use. 

Do you know of any cool tools or resources that help you in your data-driven decision-making process?  Share them in the comments!