How data can drive the revenue of your startup business?
Data has revolutionized the world of business and everyday life. Using it can make all the difference in the success of your startup. Even more so directly in terms of your revenues. Not to mention making the daily journey of entrepreneurship far easier.
So, how should you be using data in your business? In what ways can data be used to drive revenues, and even great business value?
The Best Startups Are A Blend Of Art & Science
Before we had all of the access to data that we do today, business owners had to run on just their own intuition and experience over a long period of time.
Some got very lucky. Some were conservative and well-funded enough that they were able to survive long enough to get big, even though it was a much slower process than it is now.
Data alone can be a huge asset and incredible tool for aspiring entrepreneurs and business owners. Though until AI gets a lot smarter, the best ventures will still be a combination of human intelligence and vision, based on facts.
You don’t want to rely only on one extreme. In fact, one of the most important and needed skills in this new technology-driven world we live in is being able to interpret all of the data.
This isn’t always the strong suit or favorite task of startup founders. Yet, it is essential.
The Importance Of Data For Businesses
It’s hyper-competitive out there. The dramatic reduction in the cost and difficulty of launching a start and expanding business means that the landscape is only likely to get even more competitive.
As a business owner, you have to optimize everything. You can’t ignore the data and ability to tighten up and not only enjoy more revenues, but better marketing performance, and profits, as well as being able to scale faster and give customers a better experience.
If you ignore these assets and intelligence at your fingertips, you are just handing the advantage to your competitors, which will help them exponentially outperform you each month. And that’s the reason why every business owner must learn how data can drive the revenue of your startup business.
Data is critical as well when raising capital from investors. Keep in mind that in fundraising storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
How To Use Data To Drive Your Startup Revenue
There are a wide variety of datasets, metrics, and dashboards that you can use to boost your startup’s revenues directly and indirectly. These are just some of them.
Knowing Your Target Customers
You can’t maximize your startup and take full advantage of the opportunity or revenue potential unless you really know your customers and are focused on the right customers. Until you nail this everything is going to be hard and slow going. When you nail it, everything is easier and faster.
Even before you really get started and build your business plan or pitch deck, you need to know who your target market is. You need to understand the whole market, who you can be a fit for, and who you will target first.
You really need to understand their problem, needs, wants, desired user experience, and how to start marketing to them.
Segmenting Your Audience
Use data to segment your audiences. Whether it is by geography, size of customer, product type, stage in the customer journey, or something else, it pays to group your customers by their data.
This allows for great customization and personalization for all of your customers. That means on message communications that are less likely to turn off good customers while increasing conversions and retention.
This isn’t just important for bringing in new revenues, but maximizing the lifetime value of each customer. That’s a lot better than handing them off to your competition.
Identifying The Best Partners
This same concept of using data to understand your customers and segment them can also be used to identify your ideal business partners. And, that’s only one of the critical reasons to understand how data can drive the revenue of your startup business.
Specifically potential partnerships with other businesses who may already have relationships with your ideal customer base, and can help you scale revenues fast.
Business Goal Setting
Without knowing the data, you can’t even set strong business goals for your startup and team members.
Use the data available on your market to understand how large it is, how its different parts work, the players in it, how market share is divided, and what percentages of that the leaders command.
This will show you what’s available, obtainable, possible, and where to aim if you want to go even higher than that.
It will make sure your goals are both realistic and big enough while helping you to create financial models that make sense for your investors.
Simplified Decision Making
So, often entrepreneurs fear making decisions and sabotage themselves in paralysis and fear of making the wrong decisions, or they are just winging it, and hoping to get lucky.
Neither of those issues is no longer necessary. You can and need to be making decisions based on the data. The answers are already there if you just use them.
This is also essential for leaders to maintain the trust and respect of their teams and investors. As well as empowering your teams to make decisions on their own, freeing you up for bigger things.
Identifying Trends & Opportunities In Real-Time
With the data at your fingertips, your startup can spot emerging trends and opportunities as they arise and take advantage of them immediately.
This will maximize your upside potential and revenues. While simultaneously enabling you to trim and avoid losses and wasting capital and time on the wrong things. An issue that you might have had to ride out for a quarter or a year to get data on in the past.
Testing & Perfecting Marketing
One of the most important and obvious uses of data for startups is in marketing. Specifically, it should be used upfront to understand what types of marketing and marketing channels and media are right for your target customers.
Never assume. That is the classic recipe for disaster and bankruptcy. Rely on the data.
Use the data to guide you to which types of content to create, what to run ads on, and the steps in the sales funnel that makes sense.
Test and perfect it before pouring in capital to multiply those results and revenues. Be keenly aware of how data can drive the revenue of your startup business.
Once you are up and running, use the data to monitor your marketing performance. Benchmark those results. Analyze what’s working well, and how much it is really costing to make sales and the ROI on your marketing.
You can check out your data on email open rates and clicks, data on Google ad clicks or calls, blog views, and more.
What’s Not Working
Just as important as what is working, you want to track what is not working so that you can close those gaps and stop wasting money.
Track what’s turning people off and driving them away. What emails are causing them to unsubscribe?
What landing pages are bouncing people? Looking at time-on-page and page views, where are people exiting your site to go to the competition or find another solution? What phone scripts are failing to close customers?
Split Testing For Everything
What’s really great about today’s data tools is that you don’t have to wait for feedback. You can simultaneously split test just about everything very affordably.
You can be running multiple variations of ads, domain names, landing pages, colors, text and image positioning, pricing, phone numbers, calls to action, and more.
Keep testing and narrowing down to the winners so that every penny of your budget is returning the maximum possible revenues.
Measuring The Value Of Your Assets
Data can help you best value your assets from a revenue perspective.
It will enable you to gauge which platforms are really delivering the most revenues and profits, and the ROI. For example, distribution partners versus Amazon or your own website. As well as online versus offline channels, like retail storefronts.
Measure the traffic and sales and returns, and decide which to keep or shed, and where to invest more effort and capital.
Customer Happiness Levels
One of the best uses of this data is for continuing to measure and monitor customer happiness levels. Do they love the product, service, and company? Do their responses mean they are likely to stay? Will they refer others and become raving ambassadors?
This is one metric that will make or break you. Make sure you are listening and taking action on this data.
Don’t just be happy benchmarking against others with poor ratings, try to set new levels of expectations. This alone can create a powerful moat around your business.
If you would like more information about how data and figures work around your pitch deck, check out this video. You’re sure to find it interesting and practical.
Where You Need To Hire Help
Your data will help you spot the areas where you really need to hire more help.
Where are the weak spots in your business that may directly trace back to impacting revenues? Where could you be growing your revenues if you had more expertise on your team?
You may also use data to track where your competitors are hiring and could be planning to make a push in the future and adjust to stay ahead of that curve.
Your data will also show where you are getting the best returns on your current teams. Maybe things have changed and you don’t need many salespeople anymore.
Maybe servicing customers is where it is at. Or maybe you’ve automated all of it in the US but could expand revenues most by hiring more team members in a new foreign market.
Gaining More Funding
Use data to display more proof of what you are saying to investors. Present to them and give them certainty in your numbers, financial projections, and forecasts.
Having the data to back everything up will greatly de-risk your venture as an investment for investors of all types. This in turn means more negotiating power when it comes to the terms of investment and how much you can ask for.
Use data to help identify your ideal investors, and understand them just as well as you understand your target customers. That’s how data can drive the revenue of your startup business.
Now that you’ve optimized your business with data, and are increasing revenues, multiplying those numbers further is just about pouring in more capital.
Selling Your Data & Insights As A Service
Once you get good at collecting and compiling and sorting a lot of data, it can become a revenue source in itself.
Look at Facebook. It is essentially a data company. It may both sell your data, as well as advertising based upon the data it has, or its influence for just about everything you can imagine.
Even on a smaller scale you could be turning your data into reports and answers and selling those as a new revenue stream.
Adding Tremendous Value To Your Company With Data
In addition to all of the above, the data itself has a lot of value. That makes your company valuable. Many companies have traded hands, not just for their technology and users, but based upon the perceived value of their data.
Keep building up that data and organizing it, and it could be worth more than the rest of your business put together. It could be the makings of a fantastic M&A deal. Carefully learn how data can drive the revenue of your startup business.
You may find interesting as well our free library of business templates. There you will find every single template you will need when building and scaling your business completely for free. See it here.