As consumer confidence shrinks alongside household budgets, just about every sector of the consumer economy is becoming more competitive. In the past, a small business could sometimes afford to carry a little extra inventory, or buy ads without a marketing strategy, or default to pricing products in line with competitors. Today, you need every advantage you can get. When it comes to financial decision-making, data can provide valuable insights that you’d miss relying on intuition and experience alone.

In the past, data analytics was only for the big businesses that could afford both the software to collect data and the experts who knew how to analyze it. Now, customer relationship software (CRM) puts that power into the hands of small businesses. When you use these tools to help you collect and analyze financial data, you’ll make more confident decisions, gain an advantage over your competitors, and, most importantly, improve the customer experience.

What Is Financial Data?

Financial data covers all of the money coming into and going out of your business: expenses related to operations, marketing, inventory, and payroll, to name a few, as well as revenue. This data comes from various sources: your bank accounts, credit card accounts, invoices from vendors, data from your point-of-sale system, and so on.

A CRM system can connect to these various sources to provide your business with a single source of truth on all financial questions. Rather than bringing together information from a dozen different websites and apps while also digitizing a trail of paper invoices and receipts, CRM integrations keep it all in one place so it can be analyzed holistically.

Make Better Decisions

Data analytics is like a microscope for your business. You know there are inefficiencies somewhere, but you just can’t see them. Data analytics brings all of those small issues into focus so you can see exactly where your business is succeeding and where it can improve.

Analyzing this data across time can help you more accurately determine peaks and troughs in revenue throughout the year so you can better focus marketing and sales efforts while adjusting inventory seasonally. You can do this through common sense—if you run a garden center, you know it’s going to get busy in springtime, and you’d better stock up on your poinsettias for Christmas—but data analytics can spot subtler trends the naked eye might miss.

More Accurate Pricing

Pricing strategy is one of the trickiest aspects of business strategy. There are so many factors to consider: manufacturing and shipping costs, competitor pricing, consumer preferences (including what your customers would be willing to pay for your products), standard markups for your industry and sector, what particular value you bring to the sector that can affect the price of your products…the list goes on.

A data-informed approach to pricing helps to bring all of these factors under control and bring clarity to the ones that are the most important to your business. With a smart CRM, you can bring all of your enterprise resource planning data, social media analytics, website analytics, sales data, and business intelligence data into one place and create sophisticated statistical models that show you what you might have otherwise missed.

More Accurate Forecasting

In the past, we had to rely only on our experience, and maybe what we read in trade publications or the news, to make decisions that affect the future of our business. When we make decisions that way, there’s a whole lot that we don’t see. Using data for financial forecasting fills in our blind spots and mitigates our biases (we all have them). It also helps us better understand new situations, ones we don’t have much experience with. All of the hidden opportunities that data brings to the surface can give your business a vital competitive advantage.

Go Beyond Intuition

That’s the real value of data analytics: filling in your blind spots and giving you something more than intuition. You gain more confidence in your decision-making when you know which perspectives the data supports or does not support. Your years of experience in business and all of your hard-earned expertise then become valuable in interpreting the data and building a strategy around it.