How do you approach decision-making for your business? While it might be tempting to forego critical thought and rely on your gut instinct for major decisions, we urge you to instead follow the data and observe what it’s trying to tell you. If data analysis sounds like pulling teeth, however, you’ll be relieved to know that AI tools have made it significantly easier to analyze large amounts of data and make more informed decisions.
You Can’t Trust Your Gut
Decisions made solely based on your gut instinct will always be made based on the most limited dataset out there: your own personal experience, which could be subject to biases and influences.
For example, let’s say your sales report tells you that a specific product of yours is hot right now, so you invest some marketing into the product to increase sales. The problem here is that you’re relying solely on the sales report, and it’s subject to various biases, including recency bias (where only recent events are considered) and availability bias (where you rely on things that come to mind first rather than the whole picture). Simply put, your biases will always be skewed toward what you want to be true rather than what is actually true.
The sales report is only giving you part of the picture, when instead, you want to consider the following questions:
- How often is the product purchased, then returned?
- What is the profit margin of the product vs the marketing invested into selling it?
- What if your customers can get the product at a discount elsewhere?
We could go on and on, but suffice it to say that the more data you have for making business decisions, the better those decisions will be—and relying on your gut instinct is going to hold you back.
AI Can Help You Pull More Value from Your Data
Obviously, it can be a bit daunting to review massive spreadsheets, but with the right tools and the right data, you can glean incredible insights that help your business make better decisions moving forward. While you might not be able to cross-reference and compare thousands of stats and figures at the same time, AI certainly can, so why not take advantage of it?
Questions to Ask Your AI Model
“Who is my most valuable customer, actually?”
You can only get so much information from a quick glance. You instead want the big picture that only AI can give you. You’ll want to know which customers have accumulated the highest lifetime value, as well as what behavior determines that LTV. Look at how often they’re purchasing your products or services, how often others are referred to your business, and how often they return purchases or use a discount. With all this in mind, you can create a profile for your ideal customer and then target people like them moving forward.
“When is my cash flow most likely to destabilize?”
With AI, you can pull together all kinds of historical data to determine when your business is likely to experience financial ups and downs. Data analysis offers you the ability to make better decisions based on what actually drives your business’ profits, and smart use of AI systems lets you build a plan to respond to the slow seasons with grace rather than fear.
“Are there any purchases that my customers pair together?”
Some products just go better together, and with AI, you can discover which of your own products or services are purchased in a pair. You can then use this data to put together offerings that offer more value for customers. You can also use this information to put together communications designed to enhance and promote these offers, giving you more opportunities to sell in the long run.
Make Better Decisions with the Right AI Tools
If you’re sick of dealing with today’s problems and would rather shift to a more proactive strategy, using AI can be something to consider. Pick just one of the questions above and reach out to us for help in using your technology to accomplish more.
Our managed services are designed around the very concept of proactivity, and we’re happy to lend our expertise to those we work with. Reach out to us at 978-798-6805 to learn more!
