What does it mean to be “data-driven”?


Digital Decisions

Everything today is digitized. Most business interactions with customers and partners take place in digital environments – especially during the pandemic — and many processes and operations are further enabled by computers. As a result, all companies have an ability and opportunity for nearly every aspect of their businesses to become data-driven, including sales, marketing, or customer success. 

Being data-driven means making decisions based on information, rather than your gut. It’s all about looking at the data at your fingertips — how customers behave, what web visitors search for, and what customers ask for in their emails – and applying the scientific method. That includes measurement, experimentation and modifying a hypothesis based on new data.  

For example, you might look at trends in your business and try to make predictions. If you’re able to see something consistently happening, you’ve identified a trend to which you can now react strategically. You can make smart decisions or adjustments in the business based on this information. If you’re successful, you continue. If not, you can reanalyze the data, look for more signals and find a broader way of examining whatever it is you are trying to uncover.


This type of approach revolutionized baseball. The “Moneyball” era heralded a shift in conventional baseball scouting practices from evaluating players by instinct to using statistical analyses to build competitive teams. This strategy changed the sport, and now it’s revolutionizing business. 

For example, large, sophisticated companies with dedicated marketing teams can constantly scrutinize a massive amount of data about their ads. They use this data to slowly automate everything and make business decisions algorithmically based on the signals within this firehose of information. In the process, they are moving from the top of the marketing funnel further down into the sales function. As I’ve said before, marketing is consuming sales.  

The shift to everything being data-driven is inevitable; this is what happens when software eats a space. That doesn’t mean this change is easy. It requires a cognitive shift that can be difficult for people who have always operated according to their gut. If the conventional instinct is to whittle a list of 10 good ideas to two, being data-driven means testing all 10 ideas and seeing what works. If you have 100 different ads, you don’t narrow them down to your favorite five. Rather, you run all of them, analyze the results and make decisions.

Always Improving

There is another side to this cognitive shift: In a data-driven business, you’re never really done improving. Since you’re constantly monitoring signals, there is always an opportunity to make things better. In a more conventional approach, you may set a goal, reach a point where you feel successful and then you might stop — at least temporarily. 

The shift to data-driven is a continuum, which you may need to constantly remind yourself and your employees. That’s why every team needs a data analyst to help navigate these uncharted waters — someone who can analyze data signals and help the company make decisions in response. At a large company, that may mean a data scientist in every department who can identify and strategize around the diminishing returns for data optimization. They can help clean up business processes and free the team that’s executing from the need to also make strategic decisions.

Trust Your Gut

None of this is to say that our gut instincts are not important. Our instincts are based on our lived experiences, where our bodies gather information that we use to make decisions. But the shift to digitized processes and interactions isn’t going to change any time soon. Every company will become data-driven at some point. Those that don’t may be left behind.

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