Uncovering hidden trends and patterns: Three reasons why ‘data-driven’ matters
We use the word “data-driven” [a lot!] to describe the strategic recommendations we provide to financial institutions and retailers. And, the truth is, with so many buzz words in our business lexicon, our beloved ‘data-driven’ may be interpreted by readers as another puffed up word that carries little weight. Conversely, some people may even assume that we’re referring to a fully-automated decision tool, with no qualitative input woven into our insights.
Instead wondering how you interpret it, allow me to explain what we mean when we use the phrase ‘data-driven’ and why it’s so important to include analytical insights into your strategic decisions.
What is it?
Data-driven = analyzing market, customer, and branch/store data to uncover trends and patterns and infusing these insights with industry expertise to craft custom strategies to best serve an organization and its customers.
What is the impact?
1. Remove subjective bias – So many of the executives and managers with whom we’ve had the privilege of working are very skilled at what they do. With strong business acumen, they’ve been successful at growing their businesses. One part of why they’ve been so successful is because they know their business so well. Yet, this same internal entrenchment, may also blur their sight line to broader trends and indicators.
2. Learn from what you have already built – If you’re already operating one or several locations, glean insights from the best custom data source around – your own market and customer base. By assessing current operations, you will be better equipped to determine which strategic steps fit your unique situation. Use data to answer key questions, such as:
How far do your customers travel to a branch/store?
How often do they visit? What types of transactions do they conduct in person?
What other channels are they using for transactions?
If you’re just getting started, and don’t have your own primary data, secondary data – such as industry benchmark or market demographic data is available to guide your decisions. Take the time to learn from the market and from others before making strategic decisions that could be very costly to correct. (Hint: It’s a lot cheaper to invest in site location research than it is to build a branch/store in a poor location and end up closing it).
3. Layer data and experience – Data nor experience, alone, provide a complete view into what is happening and how to move forward. The beauty of a well-crafted strategy is in the union of the two – layering information from qualitative and quantitative findings to build a strategy to best serve your organization.
What does it look like?
Perhaps Sam, at branch #5, is an amazing manager. You know that his extra attention to detail, his competent team, and their commitment to customers influence the strong revenue growth at this location. You could accept that Sam and his team’s efforts are contributing to the strong branch performance. With no further analysis, the knowledge ends there. And you’re not wrong, Sam and his team are certainly contributing to growth.
And, with a data-driven market and customer assessment, you would also learn that non-target population has been moving into the neighborhood due to several new employment centers opening, that transactions and fee income have increased due to non-customers cashing checks, and that customers have been choosing this branch over another due to poor service at a nearby location.
What opportunities might you be missing if you didn’t uncover these additional drivers?
When we’re all moving full steam ahead, trying to check off our ‘to-do’ lists, keep up with the next guy, and hit our goals, it may feel counter-intuitive to pull back and take a deeper dive. It may even be intimidating to wrestle mountains of data and figure out which angle to assess and when. What is the cost of not taking a systematic look at your institution to learn more about what lies beneath the surface?
#data #datadriven #marketdemographics #customerexperience #networkoptimization #customerpatterns #analytics #transactions #discovery #retailbanking #channelprofile #bestpractices #branchtransformation