Nowadays, data is everywhere. It is a commodity of incalculable value. Almost everything you do results in the creation of new data. For example, when you withdraw money from a bank, data is created and stored. Similarly, when you visit a website, you create data that Google and other third-party companies can store and use.
Raw data is not beneficial without analysis. It has to be processed to get meaningful information from it. In the past, software and hardware limitations would force data teams to spend exuberant amounts of effort trying to properly prepare data for analysis, prior to delivering it to the business users for decision-making. With the revolutions made in cloud data warehousing and data pipeline tools, it is much easier to capture and analyze data from multiple sources and make real-time decisions. To that point, businesses no longer have an excuse to make gut feel decisions on most items. In fact, doing so can have negative consequences and potential legal ramifications, especially if you are publicly traded or in a regulated industry. Here are seven reasons why every business should have a data strategy:
1. Improve efficiency
It's easy to see waste in agriculture or manufacturing - unused metal or poorly harvested crops leave consumers feeling underwhelmed by providers. With most companies having a technology offering today, it's harder to visually see waste but the reality is that it is there, typically masked as "research and development" or "customer acquisition costs". All this leads to higher prices for end users and typically a less than stellar user experience.
A firm collects data about its internal and external environment. Analytics helps to make sense of the data and attain insights into finance, sales, marketing, product development, and other functions.
You can use the processed data to improve your operations and performance. You get invaluable data to help you collaborate better, perform better, maximize product offerings, and outdo competitors.
Analytics can also help businesses identify operational areas with problems and those that are error-prone. For example, it can identify areas that need improvements such as employee productivity in a specific department or gaps in product development before users experience frustration.
2. Identify business opportunities
Ever feel like some companies just know what you're thinking and deliver the perfect email promotion right after you thought about their product or industry?
Mining sales, marketing and customer utilization data helps to identify opportunities in business and capitalize on them. Less ad clicks = less cost, allowing companies to generate higher profits or pass savings through to users. In addition, one of the greatest benefits is a better customer experience during the sales process, leading to higher net promoter scores and further reducing acquisition costs through organic traffic and positive brand recognition.
3. Cost reduction
Among the main benefits of data and analytics is reducing costs. When is the last time you got a call or email from a vendor you purchase from saying something like this:
"Dear Awesome Customer,
We've made a serious investment in data analysis which has led to us understanding what you want better. So, we were able to build a better product, acquire more awesome customers like you leading to economies of scale, and because of that we're able to discount your current solution. Here's $50 a month back in your pocket.
Awesome Company who will be in business a long time"
You wish, right?
Data analytics saves money by identifying efficient ways of doing business and eradicating inefficiencies. Additionally, it aids in the development of products that fit the market and meet consumers' needs. Don't waste resources on products that don't appeal to the target market. Be that awesome company and give your clients happy news like the message above. Even better, tell them their price is reducing AND you're adding additional services due to the investments you've made in your business.
4. Improve the efficiency of marketing efforts
Data analytics help businesses develop customer-centric marketing campaigns. Think about this next time you get hit with an advertisement.
- How clearly did the company convene their message?
- Did they understand what you were looking for and clearly articulate a solution?
- When they chased you around the internet presenting ads, did they tell a story or hit you with the same clickbait over and over?
Enterprises who know what customers want craft effective campaigns. They can customize their campaigns to target their customers effectively and appeal to them. All sounds good, in theory, but using data to get a deep understanding of who your customer is and what their decision-making habits are will be critical to crafting a successful message.
5. Inform decision-making
Analytics offer the ability to make decisions quickly and accurately. Your decisions are not delayed because a data analyst has not completed processing your data. Getting refined data almost immediately allows you to move faster and stick to deadlines without the risk of making emotionally-driven, misguided decisions. The result is smarter decisions and improved business performance and profitability.
6. Development of new products and services
Product and service analytics give you the ability to identify customer needs and expectations leading to a better product for your end user. Analyzing the following is a great start to understanding where to go with your product next. Hint - tracking change over time for better results:
- Total product utilization
- Client net promoter score
- Application adoption
- Natural language analysis on customer feedback and 3rd party reviews
- Customer churn
- Product churn
Understanding the present state of the business and trends of product/service utilization helps predict future outcomes. You can develop products and services that meet customer needs. Alternatively, you can trigger demand and create products and services to meet it.
7. Increase competitiveness
"If the art of war were nothing but the art of avoiding risks, glory would become the prey of mediocre minds...I have made all the calculations; fate will do the rest."
- Napoleon Bonaparte
Running a company is risky. Starting a company might be slightly masochistic. Analytics helps companies collect and process data to eliminate as much risk as possible and feel confident in their decision making. Better still, Forrester reports that 60-73% of all company data goes unused for analytics! Being one of the companies that takes the extra time to do the math, ask the right questions and look for evidence based answers before action gives a competitive advantage by informing decision-making, cutting costs, and increasing operational efficiency.
Also, a business can identify gaps competitors aren't covering and leverage them. Using analytics, firms can improve customer experience to ensure maximum customer satisfaction. This gives enterprises an advantage over competitors.
The ease of access to data is revolutionizing economies. For the first time in history, small businesses have access to data to stay competitive with their large business counterparts. Enterprises are leveraging data analytics to deliver additional value to their customers and stay competitive against smaller, more nimble companies. Positive outcomes like making better decisions, increasing profits, and improving efficiency are all windfalls of using data to make decisions. If you are looking to implement or revitalize your data analytics strategy, contact the experts at Helios for all your data and analytics needs.