Data-Driven Decisions - Why They Are Crucial to Your Performance and Credibility - Part I
First things first … What is data-driven decision making anyway? At the core, it is making a decision that can be backed up with verifiable data. A data-driven decision sounds like this:
“We have 67% fewer covers on Monday in the buffet than our next-slowest day. We lose an average of $32,000 from that outlet every Monday, compared to the other days when we lock in an average profit of $3,700. We also only have 45 people coming to the buffet on Mondays, compared to an average of 300 on the other days—let’s close the buffet on Mondays.”
In contrast, a non-data-driven decision to close the buffet on Mondays would sound like this:
“The buffet doesn’t look very busy on Mondays, and it seems like we have too much staff and not enough guests—let’s close it on Mondays.”
Big difference, right? If your approach to making business recommendations sounds more like the non-data driven decision approach, read on. If you start using data to back the reasons that you think the team should do what you say, you will receive the following benefits:
• Increased credibility
• More efficiency (shorter meetings, faster decisions)
• Increased revenue and profit
• Decisions will start going your way
• Less time spent recovering from bad decisions that were preventable
All of these positive outcomes kind of sound like magic—except it isn’t. It is data brought to life via your insights. Why does making data-driven decisions matter so much? Data and all of the beautiful reports in the world don’t mean anything if there isn’t a team to look at the reports, understand them, and use them to make decisions. In their 2012 feature on big data, Andrew McAfee and Erik Brynjolfsson describe the opportunity and report that “companies in the top third of their industry in the use of data-driven decision making were, on average, 5% more productive and 6% more profitable than their competitors,” even after accounting for several confounding factors. The good news is, if you don’t make data-driven decisions, you aren’t alone. Most people don’t (even if they pretend as they do). And if you figure out how, it can give you and your casino a major competitive advantage.
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About the author
Sarah helps clients meld data science and human behavior to grow revenue and increase profit. She was selected as part of Raving’s Database Analytics team for her exceptional analytical, quantitative and problem-solving skills and deep experience in data driven marketing. Meet Sarah this January at Raving's 20th National Indian Gaming Analytics & Marketing Conference.