The Importance of Business Analytics
Business Analytics is a process of gathering, analysing and drawing valuable conclusions from the vast amount of data available. Today, businesses, irrespective of their size, are using analytics tools to determine how data can be leveraged to solve problems and increase efficiency and revenue.
12 Reasons Why Business Analytics Is Important
1. Enhance Customer Experience
With the variety of options available, customers are spoiled for choice. To ensure businesses can retain their customer base, they turn to analytics. For example, companies can analyse a customers interaction on their website and past purchasing habits. Based on this data, they can analyse patterns and make improvements to their website performance. This can be as simple as sending a push notification prompting products that customers have added to their shopping cart. This will result in overall better customer experience, and eventually, loyalty.
2. Make Informed Decisions
Businesses often outsource a few of their processes to enhance their efficiency. When it comes to selecting vendors for such activities, they need to know which one will bring more profits. Analytics can help them evaluate supplier performance based on customer ratings, order fulfilment speed, quality, etc. This data will help them decide which one works best for their business.
3. Reduce Employee Turnover
Every year, companies have to bear an extensive cost due to employee onboarding and attrition. To save time and costs, HR professionals can use analytics tools to examine the likelihood of an employee aligning with a companys culture, tracking their performance and how satisfied they are with the new role, and similar factors. Once you know such answers, it will be easier to recognise employees who will stick to your company for a long time.
4. Improve Efficiency
Efficiency is not always limited to employees. Businesses can also analyse other resources to learn more about their performance. For example, a grocery store chain was able to reduce refrigeration costs by merely analysing the temperatures of in-store coolers. It was found that the refrigerators were being kept several degrees lower than necessary, which increased power usage. So, by increasing the temperature, power costs went down without affecting safe food storage. Business owners can learn from such examples and use data to make their resources efficient.
5. Identify Frauds
Finance companies have begun using analytics to reduce fraud. One way they do this is by using data to identify potentially fraudulent purchases, based on the analysis of customers previous transactions. These companies also use predictive analytics to look at customer profiles and gauge the level of risk. This helps rate the risk that a particular customer presents and use this analysis to prevent losses, and builds stronger customer relationships.
6. Cut Manufacturing Costs
One company that has outranked everyone when it comes to using analytics to reduce manufacturing costs is Intel. Initially, this tech giant would perform 19,000 tests on each chip being manufactured. With the advent of predictive analysis, Intel was able to determine which chips need, which tests before their launch. By using the data collected from all of that testing, it has been able to save almost $3 million.
7. Make The Most Of Your Investment
Earlier, business people would rely on traditional marketing techniques to gain and retain customers. However, the internet has changed this completely. Now search marketing has become the most efficient and inexpensive way for businesses to find leads. By using business intelligence, marketers can craft perfect campaigns and strategies, eventually increasing chances of higher ROI.
8. Improved Advertising
Advertising is expensive; hence marketers must know how to get the best return on investment. This is why they use analytical methods such as A/B and C split-testing. When it comes to advertising online, all landing pages, pop-ups, and even product descriptions are evaluated and tweaked to ensure maximum results. Even the way products are positioned on the website is assessed to identify the best location to drive more engagement and sales.
9. Better Product Management
When it comes to retail companies, they have more than a thousand products to offer. So, how do they decide which ones to release at which time? Yes, the answer is data analytics. Such businesses analyse which are the most popular products depending on the region and season. This data is then used to target the right product at the right time, which eventually has a positive impact on sales.
10. Tackle Problems
Whenever a problem arises, a business often pauses the current operations, which leads to a huge loss. To prevent such situations, business analysts help the organization to make an informed decision by providing information that can help identify potential risks and avoid any occurrence of loss. These professionals can use the raw data to detect a malfunction in the existing system, and thus help business owners to fix it at the earliest.
11. Accelerate Through Uncertainty
Look at the current business scenario. Owing to the lockdown across the globe, the business environment is as uncertain as it gets. Almost nobody has an idea when things will get back to normal, and the corporate world will be allowed to resume its operations. At such times, data analytics can be used to resolve supply chain issues, introduce crisis management solutions, optimize costs, and more.
12. Conduct A Competitor Analysis
Today, almost every business has a clear idea of its competitors. An effective way to get ahead of them is by understanding what they are up to, their strategies, USPs, etc. By gathering this data by conducting a SWOT analysis, you can get a preview of how your business is performing as compared to your competitors.