In today’s business environment, one misstep can mean the difference between growth, stagnation, or going under. Because of this, business owners are using every tool available to gain an edge against their competition.
The best resource a company has is raw data, and their best tool is effectively analyzing that data for use to their advantage. The trend of testing data analytics in business is no longer a trend or a test. It’s a necessity.
Whether you are a part of a large company or the entrepreneur behind a small business, how you use your data can affect every aspect of your business. So why not use it to your advantage? Let’s explore how data analytics can boost your business’ growth.
Lower Your Costs and Raise Your Revenue
Businesses seeking ways to spend less and increase revenue should look at what the data says about their operations. Knowing where to allocate resources helps growth. This can work as a short and long term solution if you analyze the data correctly.
For example, businesses can use data analytics to predict staffing needs for peak and off seasons, which helps reduce operating costs. They can mitigate e-commerce delivery costs by using a DIFOT (Delivery in-full, on time) measurement to locate disruptions in a supply chain.
Management analytics can help increase revenues by revealing effective workplace policies that keep employees happy and more productive. Does your data show that letting your employees work from home a couple of days a week increases productivity? For most businesses, it does.
Upgrade from a Target Market to a Target Audience
Businesses who understand their customer demographics and target market save tons of money on ad campaigns because they don’t waste resources in areas that won’t net buyers. However, times have changed, and big data and data analytics have taken the concept of a target market one step further.
Using demographics, a business could create a target market profile of air travelers from 40–50 years old who make over $50k per year. The profile uses age and income and could also use gender and ethnicity.
However, a target audience profile is much narrower and uses data to integrate aspects like behaviors, social status, and even emotional patterns.
Using an audience profile, a travel agency could market a package trip to Nashville to an audience of air travelers 40–50 years old who shop for value airline prices and enjoy country music. The second profile clearly a more effective use of marketing resources.
Effective Advertising and Social Media Marketing
Using analytics in advertising isn’t just a money saving and market deciphering tool. It is also a way to maximize the effectiveness of your digital marketing tools through a variety of other elements.
Data analytics can tell you where to place products on your page to get the best click-through rates. It can help you assess the effectiveness of your product images and let you know if pop-ups are a good option to collect email addresses.
Email marketing campaigns can use analytics to assess metrics like open rates, click rates, bounce rates, unsubscribe rates and spam complaints. These metrics tell a business how to keep email lists clean and how effective their messaging is. Continually sending marketing emails that bounce or report as spam won’t help the business grow.
Last, you can use social media data for your digital marketing campaigns to take advantage of trending topics. Businesses can use social media to build brand awareness and then use the analytics of those brand campaigns to study customer interactions. Those interactive metrics can directly drive growth if used to their full potential.
Personalization for your Existing Customers
While marketing to new customers is necessary for growth, it’s also important for businesses to take care of their existing customer base. With data analytics, you can create personalized experiences that boost customer service.
Analytics can help businesses suggest specific products to customers when they’ve logged into their site. In addition, a business can analyze a customer’s website navigation and purchase preferences to create a fully personalized experience.
Hotels are using software to create these interactions through chat-bots. The customer conversations with the chatbot provide an excellent source of data. And the next time a customer uses the chatbot, the software can respond with user-specific messages.
It may seem Orwellian, but these experiences are important to younger audiences who grew up with personalized digital advertising and services.
Scaling and Expansion
Any business looking to grow must also think about expansion. That means new locations, new products, and alternative marketing plans. Fortunately, data analytics can give businesses the insights they need to expand and scale their operations.
For example, if you were opening a coffee shop in a new location, analytics could help you find a location matching a range of ideal traits like:
- Proximity to suppliers
- Demographics and Target Market
- Taxes and Zoning Regulations
- Level of Competition
In addition, a business can scale their expansion using analytics to automate ordering and reporting. Expansion is a great way to integrate alternative systems and analytics can help a business prepare and create systems that transform it into a turnkey operation.
It’s no secret that inventory management helps balance the books of a business, but why shouldn’t it be a factor that helps growth too? Integrating data analytics into inventory management systems can drastically improve operations.
If a customer can’t purchase a product because you’re out of stock, odds are they will find the product somewhere else. Using predictive analytics, businesses can forecast demand patterns from factors like holidays, sports events, and even weather.
For example, a pizza restaurant near a sports arena could use analytics to know how much dough they need to cover the spike in demand that occurs after a football game. This prevents customers from going elsewhere for a slice.
On the other hand, analytics in inventory management can also help manage cost by preventing overstocking, waste, and shrinkage. If your analytics show that you repeatedly receive damaged products from a supplier on Tuesdays, it would be in your interest to bring it up with the supplier to solve the issue.
Customers want to get the best bang for their buck, and business owners must balance customer satisfaction and price to grow. A big problem with this is that the data tied to price optimization is often unstructured.
Growth in the modern marketplace requires that businesses structure this data into a price optimization plan. This allows for growth through faster price adjustments because of market fluctuations. Then, businesses can identify products that can sell at higher or lower prices to match customer expectation.
Even if a business lowers a price for a sale, it’s better than a lost sale because of invariable pricing. In addition, the analytics can help a business keep track of many products and create automatic shifts. Grocery stores have been at the forefront of this shift in price optimization through machine learning.
As businesses continue to explore and refine how they use data, their practices will become more efficient. Don’t miss out on any opportunity to grow your business or you may find yourself left behind. Use the tips above and continue to research and explore fresh ways you can use data analytics to grow your business.