Is your Data Interpretation Guiding you to Wrong Business Decisions?

You must have heard this phrase “data is the fuel that drives a business”. But is this statement true? Be it big data, data science, data mining, anything related to ‘data’ is considered the god of everything, but is it so?

Data is good as long as it can provide valuable insights which can lead to an action. Data if interpreted badly can lead to disastrous business decisions. For example, if the data in your report indicates that all the sales are closed from cold calling, it is obvious that you are going to make your decisions based on that information. But you don’t realize that you are using the wrong data and most of your leads are actually generated and nurtured from marketing emails which is ultimately closed via cold calling. Now you have decided to hire 20 more employees in business development and do nothing for email marketing. You invested your money, time and resources in a completely wrong direction. You are bound to make the wrong decisions if you use faulty data.

How is Data Wrongly Interpreted?

  • Choosing wrong data: If you don’t realize the correct parameters on which you are analyzing your data, you are bound to make mistakes. For example, if you are a website owner and you are getting only 1 conversion from 100 page views. So, it isn’t ideal to increase the number of page views, but to focus to increasing the rate of conversion. Choosing the right data metrics according to your data needs is the precise way to go.
  • Aggregating data from multiple sources: Combining data from more than one source can be tempting, but you have to be extremely careful of the sources that you are selecting. For example, it is a wrong practice if you combine data from campaigns which have different objectives for its ROI like conversion ads will obviously have a higher ROI than the ROI of the views on a video. Hence, be very careful before selecting the sources that you want to use the data from.
  • Defining the level of success: The way you define conversion, the cost of conversion and the expected ROI on a single conversion, all depends on your understanding of the value of conversion. There are people who are discouraged by a 25% conversion rate and there are people who are happy about a 5% conversion rate. The goal should be to improve continuously. A 5% conversion rate after four months of performing below 2.5% should be considered a success.

Poor data quality can lead to bad business decisions, substandard sales forecasts and loss of overall business. For leveraging data interpretation in the maximum way possible, you must avoid the wrong approach to make data driven business decisions. A failure to do so will lead you to make biased choices or foster a poor data culture in your organization. There is no denying in the fact that by harnessing data in the correct way, you can take your business to new heights. And to reach there, you would need the help of the right tools and techniques. You can get high level of accuracy and prevent misleading interpretations with the accurate software applications, and grow your business with the data interpretation that you need.

Riya Basu

Riya Basu, a core member of the content team at, has previously worked with several brands related to lifestyle, travel, education and f&b. She is a YouTuber who creates videos around fashion, food and fitness. A photography enthusiast, she loves to write stories around people and places.

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Riya Basu

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