Have you ever thought about how big companies like Amazon and Netflix seem to know/understand your need so perfectly that they have it in either list or suggestion even before you begin the search for it?
Or that ad they serve on Facebook and Instagram talking about something you have been searching for?
A look at data analytics holds the answer. In fact, organizations that harness analytics beat their peers across nearly any metric that matters!
But where do you start?
In this blog, you will learn the basics of how to use data analytics to grow your business faster. Let's dive in!
The Importance of Data Analytics Today
The present times are the data explosion. Digital data production grew from just 2 exabytes in the year 1986 to an incomprehensible 64.2 zettabytes produced all around the globe on a yearly basis by 2020. That translates into trillions upon trillions of bytes!
However, the data may be growing at a staggering rate, so having the right approach is important and critical. As with crude oil, raw data needs to be refined to generate value - that is, you cannot drive any valuable insights and actions from it.
This is where analytics comes into play, examining raw data to reach conclusions that can help others make decisions.
In today's data-driven world, businesses simply cannot afford to forgo analytics if they want to stay competitive. Take a look at these powerful statistics:
- Companies that adopt data-driven decision-making are 6x more likely to retain customers and more profitable than competitors.
- Many businesses recognize the need to manage unstructured data more effectively.
- Organizations leveraging analytics reduce costs by an average of 8% while boosting revenues by 10%.
No need to say more, the numbers speak for themselves. Analysis of data plays an important role in achieving the best-ever performance & results.
The Main Types Of Data Analytics
Having discussed the tremendous importance of analytics, the next question is what types of data analytics are best for your business?
Descriptive Analytics
This looks at and analyzes past data to understand what has happened. Reports, dashboards and metrics help distill raw data into digestible formats.
A view that is backward looking such as this helps to answer questions like:
- Track your historical sales over the past year if possible.
- What were the most returned products?
- What are the monthly variations of your website traffic?
Data has to be transformed into information that you can use, and this process is the step before breaking through to more advanced analytics. Before anything else related to predictive analytics, this is an important first step.
Predictive Analytics
Descriptive analytics tell the present based on knowledge of the past; predictive forecasts what is to come. Statistical modeling and machine learning. This is the work of finding patterns in data, so we can predict what may happen next.
- What could predictive analytics uncover for your enterprise?
- Based on historical data, projected growth in sales
- Risk of churn - which means customers who are likely to not renew their subscriptions
- Projected traffic to your website and conversion rates
Predictive insights give you the ability to take action before things go wrong or opportunities are lost. Even better, predictive analytics is now widely available to organizations of all sizes thanks to the capabilities of today's AI.
Prescriptive Analytics
Prescriptive analytics suggests or recommends further courses of action to take advantage of future opportunities. It integrates predictive analytics forecasting with optimization algorithms and AI to recommend revenue-generating actions such as:
- Targeted sales and marketing campaigns
- Dynamic pricing to maximize profit
- Automated changes to website content
Prescriptive analytics helps you decide your next steps, with data-backed recommendations. Eliminates guesswork in making critical business decisions.
High-Impact Applications Across Business Functions
Having done that, let us dive into how you can implement an analytical toolset across key departments which will lead to spur growth on the company level.
Marketing Analytics
Analytics is essential for modern marketing teams to ensure campaigns are effective and ROI can be proven. These have specific applications like:
- Web analytics to optimize site experiences using data like page views, bounce rates, and conversions.
- Campaign analytics to gauge the performance of initiatives across channels like email, social, and paid search.
- Marketing attribution to quantify each channel's influence on conversions.
- Predictive lead scoring to identify high-value prospects using past behaviors and attributes.
Marketing analytics takes people out of their heads - now teams can spend how they want and see what works.
Sales Analytics
In the case of sales teams, analytics allow them to make sure that they are only spending time on leads with the highest conversion rates and optimizing their entire process. Use cases include:
- Sales forecasting and projections based on historical pipelines and closed deals.
- Lead prioritization and scoring using factors like demographics, engagement, and predicted lifetime value.
- Opportunity analytics tracking deals progressing through the pipeline.
- Sales rep performance tracking with metrics for calls, emails, opportunities created, and deals closed.
These kinds of insights enable managers to guide reps toward lead prioritization and also recognize areas for coaching.
Customer Analytics
Unique visibility into buyer needs, behaviors and satisfaction is provided by customer analytics. Applications include:
- Customer segmentation to group customers into cohorts based on common attributes like demographics, behaviors, and preferences.
- Churn analysis to identify at-risk customers based on predictive indicators.
- Customer lifetime value modeling predicting future customer profitability.
- Sentiment analysis of customer survey responses, reviews, and social media chatter.
It helps you offer personalized experiences to the customers. That heightened satisfaction leads to referrals and repeat business while lowering churn rates.
Operational Analytics
Analytics helps optimize costs and processes for finance teams and operations leaders. Use cases include:
- Supply chain analytics to minimize inventory and supply chain costs using demand forecasting and inventory modeling.
- Workforce analytics to track employee productivity, retention risks, training needs, and hiring demands using HR data.
- Cost and profitability analytics to identify the most profitable products, customers, and sales channels.
Analytics converts ERP, HRIS and accounting systems data into operational excellence. The business operates in a lean and effective manner.
So it should come as no surprise that analytics can add value end-to-end across the organization, from marketing to operations and everything in between. To be truly effective, it needs to tear down data silos and get insights out company-wide.
Best Practices to Make Insights Actionable
The advantages that analytics drives are distinctly brilliant, and yet many companies do not take action on the information we generate. Below are some best practices for using analytics to ensure that it accelerates growth, rather than the other way round.
Get Leadership Buy-In
Moving to data-based decision-making needs a cultural shift. Ensuring that executives and managers show full commitment to analytics initiatives and set a data-driven example.
Invest in Analytical Tools and Talent
A healthy mix of analytical resources also means that money must be spent on less technical BI platforms like Microsoft Power BI in addition to the data analysts and data scientists.
Focus on Business Outcomes
Relate every analytics project to fundamental business objectives such as increasing sales, minimizing costs or enhancing customer loyalty. Stay away from technicalities.
Foster a Data-Driven Culture
Help employees read data, ask the right questions, and support decisions with data. Manage performance and make fact-based rather than gut-based decisions the easy choice.
Make Insights Consumable
With customized dashboards, graphs and reports for every decision-maker role, demonstrate complicated data in a digestible way. Unless the information is digestible, it does not get acted on.
Always Test and Optimize
Establish A/B testing methodologies and process owners to track critical metrics for adjustment. and to achieve analytics excellence takes persistent effort.
By following these best practices, your teams will convert analytical insight into improved business results on a consistent basis.
Consult the Experts at Edvido
Make use of experts like Edvido to increase the likelihood of you getting analytics right.
Founded in 2019, Edvido is an expert agency that connects enterprises with vetted partners for marketing, advertising & technology. With their data-driven matching algorithm, you connect your business with agencies and consultants that offer the ideal mix of skills and experience to help drive results.
Edvido makes it easy to find analytics experts you trust to execute initiatives as designed, from conception all the way through implementation and beyond. With their unique end-to-end solutions, they promise that they will enable you to get maximum ROI with your analytics investments.
