With advancements in technology, businesses now can collect a lot more data than they have ever been able to. In addition, businesses can now collect different types of data from numerous sources. Once collected, this data needs to be processed and analysed to see how it can benefit your business. Data analytics helps with getting meaningful insights from data. It can help with everything from mitigating risks and helping with product development to helping with targeted marketing. Understanding this, let us look at the different ways using data analytics helps your business.
Identifying Untapped Business Opportunities
Analysing data can increase efficiency, but in many cases, it is also used to identify untapped business opportunities. Many of these opportunities often go unnoticed meaning businesses are losing out on new markets, customers and more. When this happens, these businesses lose some potential for growth and profitability. On the other hand, taking advantage of these opportunities whenever they arise can lead to profitability and growth that keeps going and that is governed by intelligent decisions.
Many business leaders can look at data and discern short-term trends. In some cases, they may also be able to make short-term forecasts. However, many are not able to foresee potential issues that can negatively impact their business in the future. These potential issues can distract business leaders from focusing on untapped opportunities, many of which may be sitting right in front of them.
Using computer models and data analytics can help business leaders see these issues, deal with them easily and then focus on potential opportunities. For example, businesses can use data analytics to see shifts in customer demands. Doing so can help them know which products they should either improve upon, focus their marketing efforts on, or introduce into the market.
Data analytics can also be used in human resources. There are numerous businesses using data analytics in conjunction with artificial intelligence and machine learning to find the best candidates for the positions they have. Additionally, data analytics is being used to inform promotions, performance evaluations, professional development, and employee engagement. All of these are internal business opportunities that can help make the business better, more productive, and more profitable.
Better Customer Targeting
The success of a marketing campaign largely depends on whether a business can target the right customers and how well the marketing message resonates with the targeted customers. Businesses have been using data such as customer purchases and social media interactions to predict what they need. They can then push targeted advertising to these customers.
Such targeted advertisement has been shown to increase marketing efficiency by between 15 and 20%. There is a lot of data businesses can use to get to this level of targeted advertising. This data is used together with big data and predictive analytics tools to give a business insights and actionable intelligence on a person’s instincts and behaviours. By getting into the minds of potential customers at this level, businesses can ensure better marketing outcomes.
Improving Marketing Efficiency
Understanding your customers better and targeted advertising are not the only ways businesses can use data analytics to enhance their marketing efforts. Businesses can also use it to see how their campaigns are performing.
The return on investment on a marketing campaign depends on how well the campaign converts potential customers. The ability to convert depends on factors like how the campaign is presented, wording and images used, when the potential customers saw an ad, whether they interacted with the brand beforehand and many other factors.
All of this data is collected and analysed to find out if a business is converting potential customers. If not, a business can see what to tweak so that their campaigns perform better.
Also, data analytics can be used to find out which customer segments are likely to engage with the brand after seeing an ad. This type of data can be extrapolated from a small sample size that then informs a business which types of customers and demographics to target in the future.
Targeting information can be adjusted manually or automatically and be used to develop different advertising mediums and messaging for different segments. Because of how important marketing has become in a competitive business world, businesses are always looking for people who can help them understand the marketing data they collect so they can improve conversions and reduce ad spend and waste.
With a data science master degree from the Worcester Polytechnic Institute, you will have all the data analytics tools to help businesses make sense of all the marketing data they collect. You will learn valuable statistical skills and methods that turn random data into valuable insights for the businesses and organisations you end up working with.
Create Personalised Shopping Experiences
People want to know that the businesses they interact with regularly know them. There is a certain comfort that comes with a streamlined and personalised shopping or other experience. With all the data businesses collect, they can know exactly what certain customers need and when they need it.
Personalised customer experiences are very common in the retail space. Here, businesses use past data to create a persona that tells them what an individual likes. They can then create a personalised experience where an individual sees ads only for what they like.
Some businesses are also using past sale and social media data to predict life stages so that they can recommend the right products. For example, you might see larger diapers recommended if your baby is over six months old.
This also happens when behaviour changes. There are a lot of businesses that use past purchases and changes in behaviour to predict if someone’s life has changed. If it has, the business can recommend the appropriate products and push targeted advertisements through their partners and other channels the individual uses.
Help You Make the Correct Decisions
The success and growth of your business largely depend on the decisions its leader makes. In the past, it was impossible to know how these business decisions would affect your business. Now, businesses are using data analytics to know this and, therefore, make the right decisions.
Using predictive analytics, they can plug some data and know the likely effects of making certain business decisions. Predictive analytics is often used in tandem with prescriptive analytics to help a business know what to do in case one of the predictions does not go according to plan.
A common use of data analytics and predictive analytics is in predicting what is likely to happen if a business changes its pricing strategy or products. Pricing and product improvement are two of the most common areas where competition occurs between different businesses.
Tweaking your pricing strategy and product offerings can have a positive or negative effect on the business, and you need to know which is more likely before you make the decision. In case these models produce a hypothesis, you can do A/B testing to validate the hypothesis produced. The data collected can help inform you whether to push forward with the changes or not.
Data Analytics Can Help with Operation Streamlining
Operational efficiency is crucial for businesses that want to keep growing. Operational efficiency calls for all parts of the business to work together to keep productivity and output up while keeping the cost the same or reducing it.
Gathering the right type of data can help you pinpoint areas of inefficiency in your business and eliminate them. Your supply chain, employees, business processes and IT infrastructure are some areas where inefficiencies can cripple operations and bring your business to a halt.
Collecting the right type of data can help you see supply chain bottlenecks that can impact production, the sourcing of materials, and product supplies. Also, data analytics can help you predict where future issues may arise, which gives you time to get ahead of these issues before they happen.
For employees, you need to know if there is some sluggishness with certain employees, conflicts within departments or when an employee is not hitting the required metrics.
Business process data can help you see areas where to introduce automation and optimisations in your business processes. Automation and optimisation can help remove many of the inefficiencies that cost in business operations and are something every business should look into.
Lastly, it is quite challenging to improve business efficiency while using outdated IT infrastructure. Data analytics can help you identify which technologies are outdated, thus causing inefficiencies. It can also help you see whether the cost of investing in new technologies and IT infrastructure will be worth it in the long term.
Reduce Risks and Setbacks
Businesses face all kinds of risks every day. These risks range from employee and customer theft to employee safety, uncollected receivables and legal liability. To protect themselves from these risks, businesses must understand them and then take preventative measures. Data analytics can help businesses do so through statistical models that help predict which stores are at the most risk. Once this is determined, a business can know the amount of security to use at certain stores and even whether it would be best to abandon that store altogether.
Setbacks occur when a business is not able to sell a physical product due to certain issues with the market. When these setbacks occur, a business can incur huge losses. Data analytics can help make market predictions that help the business know how much product to order or manufacture, so the business is not left holding stock it cannot sell.
In cases where there is excess inventory, businesses can also use this tool to know how much to price their products to help clear the inventory without incurring a loss. If inventory issues are common, businesses can develop models to help them know when to start taking measures to help prevent recurrent problems.
Tailored Customer Service
Many people base their decisions on whether to engage with certain businesses and brands depending on their customer service. Having insights into your customers and their needs can help you tailor your business’s customer service to serve your customers better. Personalised and helpful interaction with a customer service agent can help customers build a bond and relationship with the business, which benefits the business down the road.
Having all the data you can collect on customer preferences, interests, and concerns in one central database allows all customer service agents to have this data as well. This ensures seamless and standard customer service for all customers.
Data Analytics Can Drive Product Development and Innovation
For a business to remain competitive, it must continuously improve its products or introduce new ones to the market. Gut instinct is no longer an option if a business wants to compete in the highly competitive business environment of the 21st century. To improve a product or introduce a new one, businesses must collect a lot of data on consumer trends, customer expectations and preferences, customer feedback and what their competition is doing.
Once this data is collected, businesses can use data analytics to sift through it and find out what their customers want. Once established, the business can move on to ensuring they give their customers exactly what they need, whether it be improving existing products or introducing new ones.
Help Improve Security
Apart from the risks discussed above, security is a serious risk that all businesses must think about. We live in a world where security threats and breaches are lurking everywhere. To protect themselves, businesses can use data analytics to find out what happened in the past.
IT departments can use data analytics to process, parse and visualise their activity logs. Doing so can help them identify the origin of an attack as well as how it progressed through your infrastructure. Using statistical models, IT professionals can also check abnormal behaviour on your infrastructure thus helping prevent attacks. These models can be run continuously for full real-time threat detection and prevention.
Big data analytics is something businesses cannot ignore. It can help a business maintain or improve its position in the market while ensuring it remains safe while servicing its customers the best way it can. Data analytics gives businesses a competitive edge that should not be ignored, not to mention all the benefits outlined above.