What does data analytics mean to your business? Is it that thing you do because your competitors are doing it? Or is it driving real value for your business?
In today’s digital and data-driven world, data analytics can be the make-or-break point for your small or midsize business. It’s how you give value to data, how you translate massive quantities of information into usable, actionable opportunities. Data analytics is most valuable to organizations when data analysts are given specific parameters and best practices on how to use the data – and you can only do that when you understand the importance of your data. You can’t make data-driven decisions without it.
So here are four key ways that data analytics can make or break your business.
1. Data analytics can make your business more competitive in the market
You’ve been collecting data for years, whether you know it or not. Now it’s time to use it to your advantage. By investing in data analytics and making it a priority in your organization, you’re already setting yourself ahead of competitors who don’t. And by using your data analytics, you can find new opportunities that your competitors won’t, allowing you to move ahead of your competition.
Data touches every aspect of businesses now, from development to marketing to sales. Not only does data analytics provide insights into your company’s success, but it aids in the decision-making process across all departments. Accessing data in real-time gives every arm of your business a competitive edge. Want to know how to improve your customer service? Ask the data. Want to build better-functioning products? Look at the data. Need to identify the most successful sales funnels? The data knows all.
2. Identify new opportunities, markets, and market trends
What’s that lurking in your data? Oh, just new opportunities, unidentified markets, and hidden market trends. With data in your corner, you can better understand your market and make marketing decisions based on the personality of a customer or their buying preferences. Fender Guitars used data to uncover an untapped market a few years back and improved revenue when they started marketing towards that group.
Businesses can even use data analytics to run market scenarios that can help them identify and recognize new opportunities that have gone untouched. Data can help you analyze external and internal factors that could help or hinder your product when market trends change or shift, allowing you to remain competitive in the market.
3. Predictive analytics helps companies avoid costly problems
Do you ever wish you had a Magic 8 Ball to tell you when a problem was on the horizon so your company could avoid it? Enter predictive analytics. Whether that problem is internal and with the product itself or external with the market, using predictive analytics in your business can help you avoid or prepare for potential issues and problems.
If your support center receives a handful of calls or messages about the same issue with your product, it might not be noticeable right away. But with predictive analytics, you could potentially extrapolate the likelihood of more people experiencing the same issue and release an update to fix it before it becomes an overwhelming problem. Use analytics to predict customer churn. Use it to predict changes in the market.
4. Data analytics can help reduce costs
Every company wants to make more money than they spend. But have you been using your analytics to do that? Analyzing your own business as well as your market can help you find ways to reduce production and operational costs and improve your bottom line. Find opportunities to reduce employee churn and the costs that come with recruiting and onboarding new hires. Uncover new marketing and advertising avenues that require less spend. Build better products, features, and services that people want to buy.
Analytics can also help you fight fraud and provide your customers with a stronger sense of security. And if you can provide cost-saving measures to your customers in the form of automated alerts, fraud detection or prevention, and more, you can turn them into long-term customers and save on the cost of having to get new customers to replace those that left.
There are countless more reasons why data analytics is essential to business in this day and age. These four reasons are just the tip of the iceberg. And in the end, they all amount to the same thing: Without data analytics, your business could be dead in the water. Don’t let data analytics be the thing that breaks your business.
For other ways to use data to boost your business, see “Analytics 101: How to Unlock Future Growth for Small and Midsize Businesses.”