Business analytics processes pull data from a variety of sources in order to guide future company strategies and directions. The right analytics can give insight into consumer purchasing and demand, resource utilization, surpluses and shortages, and supply chain operations, among many other key elements of business operations. Using analytics, you can identify how to improve existing processes and markets as well as delve into new areas and opportunities.
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Business growth depends on a full and comprehensive understanding of your customer base, your business capabilities and your competitor operations, especially when the market is down and the economy is struggling. Identifying market demands is an important first step toward tailoring better products and services for your audience.
In this guide, learn about the importance of analytics for better understanding your customers and outperforming your competition in a difficult market.
Top 6 ways to leverage data analytics for better business outcomes
1. Self-service analytics for subject matter experts across departments
To make data more accessible, IT must remove barriers for business groups and enable a high level of self-service analytics at the enterprise scale. While not every layperson can be a data expert, to get the most out of data analytics, you should identify subject matter experts in each department who can master the information and some level of enterprise analytics strategy.
They should be able to channel this knowledge into providing the feedback, insights and business context needed to develop effective data assets for their teams to use. These data assets will serve as a well from which other employees in that department can draw the right conclusions and make better business decisions.
2. Better efficiency and cost savings
Saving money and reducing expenses is always essential, but in an economic downturn, it can make or break a business. A strong analytics strategy can help identify more effective measures for sales and marketing, customer interactions, transaction processing and operational endeavors that are usually more resource intensive.
You can use analytics to monitor your operations — see what’s working well, what might need to be improved further, and what is substandard and in need of immediate correction.
3. Improved inventory management
Inventory and supply chain management are operational areas where analytics strategies can measure and greatly improve performance. The goal is to build a solid inventory management strategy based on analytics to eliminate inaccurate records, optimize the ordering process to prevent shortages and surpluses, and otherwise prevent mistakes that can damage your business.
With data analytics, you can upgrade operational efficiency to avoid stockout, set proper stock levels, empower order fulfillment, set accurate product descriptions, and eliminate excessive warehouse deliveries and errors.
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Data can also serve as a foundation for future predictions. You can plan out your future inventory needs based on weather trends, traffic patterns and consumer demands. For instance, knowing a hurricane is poised to touch ground in Florida can alert you to avoid shipping to/from this region until the threat has passed. Keeping tabs on market habits and upcoming changes will ensure you improve your inventory management process and reduce expenditures.
4. Stronger lead generation strategy
Lead generation is the foundation for organizational survival in a down market. As your customer base is likely to shrink, it’s important to bring in fresh clients to stay afloat. Knowing what customers want and which channels they use to find your products and services can help position your organization to be in the right place at the right time, so to speak.
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Social media outlets like Linkedin, YouTube, Instagram, Facebook, Twitter, Pinterest, LinkedIn, YouTube and Instagram can be tremendously useful resources for obtaining useful prospective customer data. Businesses can use these outlets to quickly analyze how potential customers reach their sites and which channels they use to make purchases.
Data analytics can also assist in measuring the efficiency of your marketing and lead-generation techniques. It can identify what’s working well and allow you to focus on areas that need improvement. Metrics such as a “click-through” and “bounce rate” allow companies to determine how new clients are interacting or might interact with existing sales mechanisms and online resources.
5. Competitor analysis and customer feedback
Almost every business environment involves a degree of competition, especially in a down market where customers are looking for the brand that offers the best deals and lowest costs. It’s an economy based on survival of the fittest, so it’s important to identify your primary competitors.
From there, you can use data analytics strategies to identify their strengths, then analyze their practices and operations. Through this process, you’ll be able to see what’s working for them and then improve upon those concepts to win over customers for your own business. Understanding what the market expects and how to offer improved products and services to meet or surpass customer expectations is the best path forward.
SEE: Report: Leveraging data analytics to gain competitive advantage in your industry (TechRepublic)
Data analytics can help pinpoint where your client traffic comes from, where they visit after they leave your site and your client conversion rate. This allows you to build better operational models in response.
Competitor analysis and customer feedback opportunities are seemingly endless with the right data analytics tools and practices in place. You can gather input and formulate surveys to measure customer satisfaction and identify performance improvement opportunities. You can also collect feedback or even conduct surveys to better understand how your products and services are performing against similar competitors in the market.
6. Data forecasting and automation for future planning
The success of any business lies in evolving for future customer expectations; this evolution is made much easier with data forecasting strategies that focus on future trends and customer needs. Decision-making based on past and current data, as well as a focus on the strategy of improving future data collection and interpretation, can increase your knowledge of potential and existing consumers and how to expand the business.
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Optimizing and automating tasks, such as supply chain, customer service, order processing, manufacturing, sales and marketing, and transaction processing, helps pave the way to free up resources to focus on what’s coming over the horizon as well as what’s happening in real-time.
The importance of a strong analytics strategy in today’s market
As the threat of a global recession looms, it’s especially important that companies become well-versed in the art of using analytics; a strong analytics strategy can help these businesses prepare for and combat impending economic slump.
Spenser Skates, CEO of Amplitude, had this to say about analytics and their connection to the economic landscape of today:
“In today’s economy, every dollar spent counts more than ever. Companies need to find success with less. When there is less to invest with, where you place your investments is the difference between surviving and driving growth.
“With lean budgets, companies are often tempted to go for ‘quick wins’ through sales and marketing investments. This is a mistake. The dollars spent on sales and marketing do not compound over time, but the dollars you invest in product will. A downturn is actually an opportunity for innovation.
“Think of Uber, Airbnb and others born out of the 2008 financial crisis. Do not be afraid to invest in innovation now. Yes, it is harder with limited resources, but while you stop innovating, your competition won’t. And innovating when you don’t have much to invest forces you to get better at understanding what’s working and what’s not.
“This is why digital analytics is so essential in down economies. Giving companies the power to understand what product decisions actually improve the customer experience is the key to unlocking retention, LTV and growth — and nothing is more powerful today.”
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