Is Your Data Golden Goose or Fool’s Gold?
2.5 quintillion bytes of data created everyday !!
*Quintillion is 18 zeros.
I read somewhere that if you write this data onto Blu-Ray disks and stack all these disks, the stack would be 4 times the height of the Eiffel Tower.
Sure, you want to mine out wisdom from the belly of Mt. Dataville.
But not all of it. For example, shoe makers are interested in people’s footwear preferences. But if you run a nail salon, you don’t need that data.
Similarly, all the data that you get thrown at you in business meetings and via reports isn’t relevant either.
And there is a high probability that your golden goose data is lost somewhere, while you are left standing with fool’s gold in your hand.
That’s worse than having no data at all.
The solution?
Understanding what data matters and whether the data that you have is worth anything or not.
In this article, I’m going to tell you about both those things. Read on.
3 Signs your data is fool’s gold
If you see these signs with your data, immediately stop, drop that data, and roll away from it.
Data everywhere, wisdom nowhere.
If your desk and drives are filled with Excel sheets but you are still confused about your next move, your data is definitely fool’s gold.
The purpose of data extraction, data collection, or even data mining is not to complicate things, but simply decision making. If your data isn’t simplifying decision-making for you, it isn’t worth anything.
Your data comes from unreliable sources
Let’s take an example. Say, you run a local bakery. You are considering investing in a new coffee machine which is expected to bring in more footfall to your restaurant.
There are two types of data that you can use to decide whether to make the investment or not.
● One is research published by the coffee machine manufacturer. The report says that bakeries with coffee machines can expect 50% higher foot traffic.
● The second one is a survey of your local target audience which suggests that people are unlikely to change their current coffee buying habits and will hit Starbucks only.
If you go with the data from the 1st source (which likely is skewed and not focused on your locale), you stand a risk of making the wrong call.
Thus, if you don’t evaluate, analyze, and assess the sources from where your data is coming from, you are most likely relying on fool’s gold.
The data is irrelevant to the kind of decisions you want to make
You could know by heart the location of every mole on your target audience’s body. But would that help you prepare a marketing campaign that will get them to buy your wireless headphones?
So then if the data you have about your audience doesn’t relate to their business decision-making behavior, it is a waste.
How to get golden goose data — 3 easy ways
While finding a goose that lays eggs of gold is tough, finding data that’s gold is relatively simpler. That is if you know the 3 easy ways to do that.
Before seeing what the data says, ask who is saying it
Data sources matter almost as much as the data itself. Why? Because the source decides the validity and context of the data.
The same figures could mean different things to different people based on their biases and/or motives.
Say there is a 3% fault rate in of the machines you plan on investing in. The sellers of the machine are likely to tell you that the fault rate is only 3% as again the competing products 3.5%.
However, this 3% fault rate can be portrayed as disastrous by another service provider who offers solutions for correcting this defect in the machine.
So should you buy that machine with a 3% fault rate? It depends on a thorough analysis and only then the data will guide you in the right way.
Update your data often
People’s preferences change. Often. So if you still think pre-teen girls love Hannah Montana, you might be a bit behind the times.
But data suggests that it is the most-watched show on TV by 9 to 14-year-old girls.
Well, that data is from 2006. The ‘girls’ are now grown-up adults who wouldn’t be interested in buying the Hannah Montana-themed notebook covers you planned on launching.
Today, the girls you want to target are probably watching Stranger Things on Netflix.
So you need to change your data with the changing calendar to make sure it is worth considering for decision-making.
Don’t force the curve or fall for vanity metrics
Let’s take an everyday business example.
Your marketing team suggests that you create an Instagram account for your small business where you can post fun reels to attract more eyeballs.
You agree. The Instagram account gets created. Your brand’s reels go viral.
And in the quarterly meeting, your social media team pats their backs on scoring high on KPIs like likes and views on Instagram.
But take a look at your sales department. Are they as enthusiastic? Probably not because the social media buzz isn’t generating quality leads.
The social media team has the right data. But that’s a vanity metric. You don’t need just likes on social media. And forcing the data curve to show that good work has been done won’t make a difference.
What you need is the data about how many people shop from your business via social media. That’s the golden data that will help you understand what works and what doesn’t.
So make sure that you don’t use data to validate the decisions taken but actually check if your decisions yielded great results by analyzing metrics that matter.
A Recap
Much like how the goose who laid golden eggs, data also yields results over the long run. You might only see a few insights coming to you every day with “golden goose data”, but over the longer run, your small data-driven decisions will bring you a great business fortune.
So stay patient and passionate, learn how to spot fool’s gold data, and make the most of your golden goose.
