Data is an extremely powerful tool for smaller businesses. Not so long ago, proper data collection and analysis would have been out of the question for most mortgage brokers. However, times have changed with the coming of the digital era. Now, you can collect valuable information simply by installing Google Analytics on your site or by using an external application to analyse wider trends in mortgage lending.
Companies that make data driven decisions have a better chance of making choices that lead to revenue growth. In a study, MIT professors Andrew McAfee and Erik Brynjolfsson found that companies that were primarily data driven benefitted from 4% higher productivity and 6% higher profits than their non data driven competitors.Find out more about using data with our two part podcast on data insight. Listen to part one and part two.
Data is an invaluable asset for streamlined, effective decision making. Here are 6 ways that data can help mortgage brokers make winning decisions:
Data can guard you against your biases
It can be difficult to verify the logic that we use to make a decision. Often we make decisions based on a ‘hunch’. Although we might not be aware of it, these so-called hunches generally reflect unconscious mental biases. These biases restrict our thinking and hamper our ability to make alternative choices. By using data, we ensure that we are making decisions that are informed by hard information rather than instinct.
It’s important to remember that even when using data, you can read into it a version of events which fits with your understanding of your business and its trading environment. This is a psychological phenomenon known as confirmation bias. To reduce its effects, consider sharing the data that informs your decisions with a few people in your team, taking into account their opinion. This will make the feedback you get around data much more credible, letting the numbers speak for themselves.
Define your objectives
Having clear objectives improves your chances of getting the most out of your data. Set out a clear strategy that outlines how you will use data to fulfil your business needs.
Also, take time to define your Key Performance Indicators (KPIs). KPIs refer to metrics that a business can measure to track their progress towards their overall business objectives. Most businesses track several.
A suitable KPI for mortgage brokers could be application approval rate, which you could calculate by dividing the number of approved applications by the number of submitted applications.
Ask the right questions, get the right data
Knowing in advance what questions you want to use your data to answer will help you focus on the right data. This means you won’t be wasting time and resources collecting and analysing the wrong data.
Have a look at your business and think of the questions you need to answer. This could be something like, “Is my website generating leads effectively?” Then you know what kind of data you need to collect; in this case, data about how visitors use your website which you could collect through Google Analytics.
Whatever your question, try to focus on your ideal data. By this, we mean the data that will give you the most accurate answer to the question.
Analyse and understand
After you’ve collected your data, you then need to read through it to extract meaningful insights and create analytical reports to enable you to make effective business decisions.
Remember to bear in mind the context in which you collected your data when analysing it.
For instance, if you are trying to measure the success of your social media pages as part of your lead acquisition strategy and were measuring social media impressions, you’d need to take into account other factors that might see a boost in activity that wouldn’t impact your firm’s lead generation.
Here’s an example: let’s say you had a boost in impressions because of a job vacancy you posted. It would be worthwhile disregarding this data as it wouldn’t have a direct impact on your lead generation.
Present data in a meaningful way
As much as it’s crucial to collect the right data, using it in a way that demonstrates how it informs your decision making is equally important. Presenting it in a clear way that other people can understand will ensure that your shrewd data wizardry doesn’t end up an untapped and dusty resource.
By using data visualisation software, you can create a powerful online data dashboard that you can use to drive your business decisions. This will give you an ‘at a glance’ overview of your business performance that you can use to cultivate a fast decision making process using real-time data.
Keep learning from your data
Verifying data and ensuring you are tracking the right metrics enables you to break away from a ‘gut feeling’ based approach to decision making. But even when you’ve come to a data-based conclusion, remember to step back and look at the data from a different perspective. Be flexible in how you relate to it and be wary of cases when you use data to leap to a conclusion that supports your ingrained view.
When dealing with data, an open posture which enables you to take multiple perspectives is best. This way, you can continue to use data as a tool that helps you make winning business decisions without being trapped by it.