Unlocking Business Growth: Why Signals Matter More Than Data

Data is everywhere. If you work in a business environment, you’ve likely heard the term “data” 50 or 60 times already today. Articles, meetings, and colleagues constantly emphasize its importance. But here’s the truth: data, as a standalone concept, is pretty useless. To truly unlock growth and actionable insights, there’s a more valuable idea to focus on: signals.

Why “Data” Isn’t Enough

The sheer volume of data available to businesses today is overwhelming. Your company collects countless data points across operations, marketing, and customer behavior. But simply having all this information doesn’t inherently lead to better decisions or outcomes.

Many businesses fall into the trap of looking at all their data in aggregate, attempting to derive insights from the overall picture. While metrics like total revenue or profit are useful for understanding where your business stands, they don’t tell you where to go next. What’s missing is a framework for identifying which pieces of data matter most for driving success. That’s where signals come in.

What Are Signals?

Signals are patterns within your data that point to specific actions or outcomes. Unlike raw data, signals provide direction. They highlight what’s working and what’s not, enabling you to focus your efforts where they’ll have the most impact.

Think of data as noise—it’s infinite and scattered. Signals, on the other hand, are the meaningful threads within that noise. They guide you toward decisions that lead to measurable growth.

For example, after launching a signal-based analytics approach with a client in late 2023, we saw their revenue jump from $1.9 million to $3.7 million in just one quarter. That growth wasn’t a fluke; it was the result of identifying and acting on specific signals within their data.

How to Identify Signals in Your Data

Finding signals requires a deliberate approach. Here’s how to get started:

1. Focus on Specific Patterns

Every business generates vast amounts of data, but not all of it is useful. Signals often emerge from the overlap of multiple data dimensions, such as:

• Behavioral data (e.g., how users interact with your product)
• Demographic data (e.g., age, gender, location)
• Firmographic data (e.g., company size, industry)

Combine these dimensions with performance metrics like conversion rates or unit economics to identify patterns. For instance, you might discover that a specific customer segment consistently converts at a higher rate when exposed to certain marketing messages.

2. Avoid Isolated Data Analysis

Many companies analyze data in silos: accounting data here, marketing data there, customer data somewhere else. This fragmented approach obscures the connections that create signals. Instead, focus on the intersections of these data sets to uncover meaningful insights. For example, the overlap between accounting data (e.g., purchase history) and marketing data (e.g., campaign engagement) might reveal which channels drive the most profitable customers.

3. Use the 80/20 Rule

The Pareto Principle—that 20% of inputs often lead to 80% of results—applies to signals, too. Look for the small subset of data points that drive the majority of your outcomes. By narrowing your focus to this critical 20%, you can amplify your results. Go a step further and focus on the 20% of the 20% (4% of data points) for even more concentrated impact.

4. Experiment and Iterate

Signals are not static. Once you identify a promising pattern, run experiments to refine your understanding. Test variations to see if tweaking certain factors leads to even better results. For instance, if a particular email subject line performs well, experiment with similar phrasing to maximize engagement.

The Risk of Ignoring Signals

Businesses that fail to focus on signals risk spinning their wheels. Looking at data as a monolithic whole can lead to generic strategies that don’t move the needle. Worse, making decisions based on isolated data sets can lead to false conclusions and wasted resources.

By contrast, businesses that prioritize signals gain a competitive edge. They’re able to:

• Double down on strategies that work
• Quickly identify and fix underperforming areas
• Innovate through targeted experiments

Bringing It All Together

To transform your business, stop viewing data as an end in itself. Instead, see it as a resource for uncovering signals. These signals are the golden threads that guide you to smarter decisions and faster growth.

Here’s the takeaway:

• Don’t drown in data. Look for patterns.
• Combine dimensions. Overlap different types of data to find signals.
• Act on what matters. Focus on the 20% of data points driving 80% of results.

By shifting your mindset from data to signals, you’ll unlock the true potential of your analytics and set your business on a path to sustained growth.

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