The huge amount of data that businesses generate contains valuable insights into how successful a business is, and data analytics is the way to unlock them. It can help businesses with everything from identifying and mitigating risks to personalising a marketing pitch for individual customers. Here are some of the other ways data analytics can help your business:
1. Make Informed Business Decisions
One of the main ways data analytics can help your business is that it can help you to make informed decisions based on evidence and research. This can help businesses reduce financial losses. There are two main types of data analytics used by businesses that want to make more informed business decisions:
- Predictive analytics
- Prescriptive analytics
Predictive analytics can be used to indicate what might happen if changes occurred in a business, and prescriptive analytics can help a business to see how it should react to these changes. For example, a business could model changes to product offerings or pricing to see how these changes would affect customer demand. After collecting sales data on the changed products, the business can use data analytics to see how successful the changes were. Business owners can then decide whether these changes should remain in place and whether or not they should be rolled out across the business.
If you want to increase your understanding of data analytics and you want to be able to make more informed business decisions, then why not consider studying for a master’s in business analytics? This course will give you all the tools, techniques, and strategies you need to understand and harness data-driven decision-making.
2. Offer a More Personalised Customer Experience
Another way data analytics can help your business is by helping you to offer a more personalised experience to your customers. Businesses collect customers’ data from a range of different channels, including e-commerce, physical retail, and social media platforms. They can then use this data to create comprehensive customer profiles. The information they collect gives them insights into their customers’ wants and needs and helps them to provide a more personalised experience.
If we take a retail clothing business that has an online store as an example, the business could analyse data collected from social media channels with its sales data to create targeted social media marketing campaigns that promote e-commerce sales for products that customers have previously shown an interest in.
Businesses can also choose to run behavioural analytics models on customer data. This will allow them to improve the customer experience even more. For example, they could run a predictive model on online sales data to work out which products they should recommend to customers at checkout to increase sales.
3. Improves Efficiency in the Business
Businesses can improve their operational efficiency by using data analytics. For example, gathering and analysing data about the supply chain can allow you to see where any bottlenecks or production delays originate from. It can also help you to predict whether these problems will occur in the future. Or, if a demand forecast shows that a certain vendor will not be able to meet the required volume of products for a certain season, a business could replace or supplement this vendor to prevent delays from occurring.
Data analytics can also help businesses optimise their inventory levels. It allows them to identify optimal supply for all of their products based on things like the holidays, seasons, and trends in the market.
Business analytics can effectively answer any doubts companies have regarding their business operations. It gives them a clearer insight into what is happening in their business so that they can make better decisions quicker instead of getting blindsided by incorrect guesswork.
4. Improve Security
Most businesses have suffered from a data security breach of some kind in the past. Businesses can use data analytics to find the cause of these breaches by looking at and reviewing relevant data. An IT department of a company can use data analytics to determine the course and the origins of an attack. This information can then be used to prevent breaches from occurring in the future.
5. Reduce Labour Costs
No matter what size of business you own or run, cost is an essential factor. All businesses are different and need varying sizes of investments at different times. For example, a gift shop near the sea may see a rise in sales in the summer months when people visit for a summer holiday.
On the other hand, flower shops or jewellers may see an increase in sales on valentine’s day or during the marriage season. This means that not only do businesses need to put in extra investments and effort at certain times of the year, but they also need to be flexible with things such as their employees.
Data analytics can help businesses to create a strategy that allows them to invest the right amount of money at the right time into resources like manpower. This can help to alleviate the risk of cost overheads and can allow businesses to make better use of resources to maximise ROI.
6. Mitigate Risks
There are risks in all areas of business. They include things like uncollected receivables, employee theft, legal liability, and employee safety. Data analytics can help business leaders understand these risks. Not only that, but it can also help them to put in place preventative measures to stop them from occurring again. For example, a business could run a propensity model to determine which of their stores are at an increased risk of theft. The business could then use this information to work out the amount of security required within their stores, or even whether they should move their security from another location.
Data analytics can also be used to limit the number of losses a business incurs after a setback. If a business overestimates the amount of demand for a product, they can use data analytics to find out the optimal price for a clearance sale to reduce the amount of stock they have. Businesses can even create their own statistical models that automatically make recommendations on how to overcome these types of problems.
Data itself is merely just facts and figures; it is not especially useful to a business in this form. Data analytics organises, interprets, and analyses the facts and figures collected by an organisation before presenting them in a meaningful way. It can help businesses to see how well they are performing. It can also help them to make more informed decisions about their future. Make sure you’re making the most out of the data you’ve collected.