Want to simplify decision-making? Ask these 3 key questions - F02

Data, the modern-day gold, surrounds us everywhere. It's generated, collected, and stored in vast quantities by individuals and organizations alike. Whether it's about customer behavior or the smart device you wear, in today's data-rich world, we are collecting more data than ever before, and analytical products have improved by leaps and bounds, enabling a focus on translating data into insights. However, insights alone are not enough. Data's true value lies in how we utilize it to make informed decisions that drive business growth and lead to eventual success. While terms like data-driven, data-informed, and data-inspired decision-making hold value, they have also become buzzwords. "Data-driven decision making" alone has 1.2 billion search results! (Thanks, Bard).

Here’s a simple visual depicting data’s journey.

In the next 5 minutes, you'll learn how to reach the final stage: decisions.

Imagine this: You possess a gleaming bar of gold, but its real value remains locked until you decide to trade it for something else or sell it. Similarly, data's potential lies dormant until its value is realized.

So, how do you measure data’s value?

Hint: It's not always monetary. That is simply because quantifying the return on data investments (ROI) can be challenging. Not every gain is monetary, but every decision influenced by data can lead to outcomes that are far better to determine your data’s value.

Which one is more meaningful?

The ROI on the 12 months of customer purchase behavior data is 150%.

OR

The customer behavior data has helped us learn about customer lifetime value, refund rates, customer loyalty, and customer preferences. This has helped us make decisions on targeted marketing and improving the customer support experience. Our efforts resulted in a 10% increase in customer retention and a 15% decrease in refunds.

There's nothing wrong with either of these. The 2nd response has more context and makes it easier to be confident about the value that data brings.

So, like me, if you want to be able to properly articulate and then understand your data’s value, I want to introduce you to the Data Value Trailblazer Framework.

This framework helps you unlock the true potential of data by asking three critical questions, one after another before you start using or asking for any data.

Now remember, don't let the word "data" reduce your engagement and attention to this framework. Regardless of our role or industries today, everyone uses data, so I am confident in this framework's value-add for you.

Question 1: What Questions Do I Want to Answer with the Data?

The first stage of the framework emphasizes clarity of purpose. When working with data, you must start by defining the specific questions you aim to answer. Formulating clear, relevant, and measurable questions lays the foundation for obtaining meaningful insights. These questions act as beacons, guiding you toward valuable and actionable outcomes.

Like explorers setting off on a quest, begin by charting a clear course. Identify the questions you seek to answer with the data at hand. Having a well-defined destination sets the tone for your data consumption.

For example, Logan, a marketing professional, might ask: "Which marketing channels are most effective in driving customer engagement and purchases?" While Wade, a customer service leader, could inquire: "What factors lead to lower customer satisfaction rates?"

Whatever analytical products (analysis, reports, presentations, excel sheets, etc.) are then made available should answer your questions; otherwise, you may not consider the first stage successful.

"That data doesn't exist" is a common response, and if that's the answer you receive or stumble upon, using this framework, you can directly link the lack of data to the inability to make a decision, and consequently, its outcome: impact on business growth.

While Logan could access a report that answers his questions, Wade had to get one built to learn about the root causes of lower customer satisfaction rates. Both can now move on to the next stage.

Question 2: What Decisions Will I Be Making Once I Have the Answers?

The second stage of the framework focuses on decision-making alignment. Here, the emphasis shifts to understanding the decisions that will be made once the answers to the questions are obtained. Decisions could range from strategic choices to tactical adjustments, and truth be told, sometimes not reacting to data is also a decision, but each one should be firmly tied to what you will learn when your questions in stage 1 are answered.

Having a treasure map is only useful if it leads to the hidden treasure.

For Logan, once he knows which channels or campaigns are performing better, he wants to make a decision on relocating investments to the most effective channels or optimizing ad campaigns. Wade, after understanding the reasons for poor satisfaction scores, would then prefer to revise customer support policies or train agents if they aren’t following the current policies and procedures.

Both of them have clarity on what decisions they will be taking once they have the answers to their questions.

Question 3: How Do Those Decisions Contribute to Business Growth?

The third and final stage of the framework revolves around connecting decisions to tangible business outcomes. Every decision made should contribute directly or indirectly to business growth. This could be increased revenue, enhanced customer satisfaction, higher retention rates, a spike in sales, optimized operations, or a competitive advantage. Having clarity on this question holds the potential to connect all your ideas, projects, tasks, or experiments to a bigger picture. When this framework becomes a standard operating procedure for all data consumers, it rapidly builds a culture where everyone across the organization is considerate and responsible for data consumption.

Congratulations, you've arrived at a treasure trove of insights and decisions! But their true worth becomes evident when linked to business growth. Analyze how each decision contributes to the organization's objectives and fuels its progress.

Logan could then observe increased customer engagement leading to improved brand loyalty and higher sales. Meanwhile, Wade's decisions could result in enhanced customer satisfaction and reduced churn rates.

Recap

Before investing time and resources in using data, answer these 3 questions.

1. What Questions Do I Want to Answer with the Data?

2. What Decisions Will I Be Making Once I Have the Answers?

3. How Do Those Decisions Contribute to Business Growth?

If you find yourself unable to answer all three questions before diving into your data analysis, consider it a clear signal that you haven't yet defined your end objective. In such cases, it's essential to prioritize gaining clarity and a clear understanding of your goals before proceeding further with the data.

If you find yourself lost in the labyrinth of information. Fear not! The Data Value Trailblazer Framework is your trusty guide, leading you to discover actionable insights, make influential decisions, and achieve tangible business growth. Your data journey is not complete until you reach the final destination of impactful decisions.

Why settle for mere insights when you can unleash the true power of data? Apply this framework with a clear purpose in mind, and watch as your focus on the bigger picture transforms your work performance. With your outcomes outweighing outputs, your achievements under question 3 will align seamlessly with the 4 Blocker framework. You'll be able to clearly articulate the impact you bring. It’s a solid foundation for success at work. Best of luck on your journey!

Peek behind the curtain of data's true value, waiting to be unveiled. So don’t hesitate to ask these questions in the next meeting that discusses anything remotely with data. With the Data Value Trailblazer Framework as your compass, you'll hold the key to unlocking those hidden gems that can revolutionize your business. Get ready to blaze a trail to success—happy trailblazing!