In today’s fast-changing and unpredictable business environment, companies must take decisions swiftly and make them count. Business analytics provides a competitive advantage, enabling decisions that are fact-based, real-time, and rooted in a single source of truth.
Analytics supports good business choices at critical junctures during decision-making. Whether to help with the context, prove or disprove a hypothesis, or chart an intelligent course of action, data analysis is often worth its weight in gold.
Data analytics is a fast-rising priority globally, and there’s a greater focus on the value of big data and the experts who can extract that value. Here’s a granular look at how to use analytics for decision making.
1. Set Realistic Goals Using Data Analytics
There’s a wealth of information available to any business that’s ready to embrace it. Data is probably the most important resource a business can possess. With data, you can drive change with positive outcomes and support your business’s growth.
Setting goals for your business will involve guesswork without the right information. You don’t want your business goals to be a moving target, shifting from time to time. This is where data science, data analysis and predictive analytics come into play.
With analytics, you can assemble data from historic trends and previous activities. You’ll have a clear idea of what your goals should and can be right from the start. This ensures that you don’t miss opportunities to help your business grow.
By analyzing historical data and industry trends, you can model potential future outcomes for your company. Data analytics also makes it very clear when certain goals aren’t possible. Data analysis shows both weaknesses and strengths that you can improve on to grow your business.
Analytical exploration clarifies the view
One thing that’s often said of business analytics is that it presents “the big picture”. It lets you consider more factors, relationships, and entities before reaching a conclusion. At the same time, analytics sharpens the viewpoint of managers and CEOs, allowing them better appreciate problems and potential solutions.
Business intelligence is critical in business because great information enables excellent decisions. Business problems are rarely isolated incidences – they typically have several contributory factors. However, the process becomes compromised when conclusions are drawn from incomplete facts or too-small sample size.
Data analytics allows everyone to step back and see what scenarios feed into the problem, then come back with a better understanding. This expanded view helps companies identify root causes more accurately and plot a suitable path forward.
2. Use Data to Build a Foundation for Decision Making
It’s important for every business decision to be grounded in solid data. Data analytics can provide you with key insights that help you make the best choices to serve your business and customers.
A decision-maker’s intuition and experience are valuable, but decisions that affect a business ought to rely on data. You can’t make good decisions about inventory management, pricing strategies and other business factors without data. Even when it comes to hiring people, actionable data can help you assess how many people to hire and how best to deploy them.
Businesses that perform data analysis are three times as likely to report that their decision-making has improved. By incorporating data analytics into your business decisions, you’ll reduce risks and gain a competitive advantage. You’ll also feel more confident that you’re improving your efficiency and business profits.
Business data provide solid evidence
Data doesn’t lie. When properly analysed, data backs up assumptions or disproves predictions, providing the backbone for accurate decisions. Data-driven decision-making (DDM) is the reliable, scientific approach.
Making hypotheses is one of the primary stages of problem-solving and decision making. For instance, when confronted with a crisis, good business leaders will theorise about what could be wrong from the nature of the situation. But going on to act using untested hypotheses will create bad decisions and poor outcomes for the company.
Instead, organisations can employ business analytics to assess the underlying data and test assumptions. Accordingly, a hypothesis may be confirmed or refuted by data, or the results may point to a more relevant line of inquiry. In either case, the company can move forward with confidence, knowing that its conclusions and decisions are backed by strong evidence.
3. Know Your Target Customers Using Analytics
Every marketer will tell you that one of the keys to success is to identify and understand your potential customers. If you don’t who they are exactly, you’ll have trouble finding them and pitching the right message. Analytics provides customer insights that help businesses consistently make sound marketing decisions.
Monitor social media
Analytics tools can also provide in-depth information on what people are saying about your brand online. You can track your brand mentions and hashtags on social media. Social media websites provide analytics to measure the effectiveness of ad campaigns on their platforms.
You can get data on where your audience is from and what their interests are. These platforms also let you know what devices your audience is using and provide important demographic information. You can use this information to optimize your website and manage content.
If your brand is trending online, you can gather and analyze information that will help you leverage this in the future. With billions of people active on social media, analytics can help you reach out to the right audience. This will help you boost traffic and drive conversions to help your business grow.
Find your ideal demographic
There are many ways to identify your ideal demographic with analytics. Data from your existing customer base and social media are valuable sources of information. You can study your competitors’ audience as well. There’s also publicly available data that can be helpful. By using marketing analytics to study your audience, you’ll get rich and insightful information.
There are many tools that make it easy to gather data about your audience. You can add Google Analytics to your website. Facebook and other social media platforms also offer solutions for businesses. You can also add analytics plugins to your site to understand user behavior. You’ll know how people interact with your products and the type of content that creates the most engagement.
Once you’ve determined your ideal demographic, you can provide tailored content and solutions. In this way, leveraging data analytics can lead to more conversions.
Segment your audience
You can also divide your audience into distinct groups with marketing analytics. This provides great value for your business, helping you avoid forcing irrelevant content on your audience.
You’ll be able to create better products and make your communications more personalized. Tools like Google Analytics will help you learn more about your audience. You can use it to analyze search queries that lead to your site. This helps uncover your users’ intent. Once you know what your audience is looking for, you’ll be in a better position to meet those needs.
Create mass personalization
When you’ve segmented your audience with the help of analytics tools, you can create mass personalization. You can set up tools to automatically and effectively personalize email marketing content. You can automate and personalize ad content to target large groups of people and create personalization at the same time. This boosts your business’s reach and impact, driving up conversions.
Personalization is powerful. 74% of marketers agree that targeted personalization drives up customer engagement. By using data to drive your marketing efforts, you can set up relevant experiences across your customer’s purchase journey.
4. Business Analytics Delivers Piercing Insights
Business analytics not only provides better information; it can also deliver game-changing insights. Using data science to correctly clean and visualize data can help organisations uncover hidden connections, forming the basis for intelligent action.
For example, a KPMG report on trends in infrastructure discussed how companies use predictive analysis to anticipate and resolve operational issues. One of the surveyed companies, a mobile network operator, noted that it leveraged big data to foresee outages seven days before occurrence. Predictive analytics saved costs and boosted operational efficiency.
Another way that companies employ business analytics is to analyse and predict customer behaviour. For example, an e-commerce company can implement analytical models to understand what products customers buy and why. Machine learning also helps the company predict what other products would sell or even answer more profound questions about the viability of a business line.
Unsurprisingly, organizations that employ data in this manner fare 85% better than peers and do nearly 25% better in overall margins. Having insights at this level provides such refinement and accuracy to business decisions; it almost feels like cheating.
5. Use A/B Testing for Major Calls
Business analytics is invaluable for companies faced with critical strategic decisions. Sometimes there’s great information that helps characterise the problem and enough data to formulate viable strategies. But it might not be clear what plan works best.
When the option is between A or B, analytics can reliably tells businesses where to go. Here’s an example of such data-driven decision making.
Uber upgraded its Customer Obsession Ticket Assistant (COTA) in 2018. The company used prescriptive analytics to determine whether the tool’s new iteration – which uses natural language processing and machine learning to improve agent speed and accuracy in responding to support tickets – would be more effective than the previous version.
Through A/B testing, which compares two choices and their outcomes, Uber concluded that the upgraded tool enhanced support speed and accuracy and increased customer satisfaction.
Without business analytics, the company would have been reduced to educated guesswork, which might have had negative revenue and brand impact. But with the insights gained from data, they could work smart and generate millions in revenue along the way.
6. Apply Business Metrics to Learn from the Past
Data analytics tell you about the health of your business. You’ll have a clear idea of whether you’re on the road to achieving your business goals, what’s happening in your business, and what you should do to make it thrive.
Business analytics enables forward momentum for companies and is also great for ongoing monitoring and measurement. Business decisions take time to prove themselves, so there’s a need to assess impact and key takeaways, particularly for major judgment calls.
Companies can select, monitor, and measure the right metrics to determine if the effort was a hit or miss with their analytics capabilities. So, they not only gain the support to make intelligent decisions but can also accurately reflect and come away wiser.
It’s easier than ever to get pertinent data that affects your business. There are tools developed by data scientists that you can easily embed on your website. You can automate data collection and analysis, and get sophisticated reports on your own dashboard.
Lift revenue and shrink costs
Analytics plays a major role in decreasing business costs and increasing revenue. It’s vital to ensure that you are using important resources as effectively as possible. One study shows that companies that adopt data-driven marketing strategies can increase revenue by 20% and reduce costs by 30%.
As MicroStrategy reports, organisations that bake analytics into their decision-making process earn more revenue and enjoy better outcomes. These companies can act quickly, safely, and profitably using descriptive, diagnostic, predictive, and prescriptive analysis.
Analytics is useful to monitor e-commerce activities, ad campaigns and multi-funnel channels. It allows you to measure their performance and effectiveness, making it easy to see what works and what doesn’t. You can stop campaigns that aren’t bringing in results, figure out which keywords are driving traffic, and put resources into better keywords and campaigns.
7. Embrace Analytics to Drive Business Growth
Embracing data throughout your organization has clear benefits. You create actionable insights by adding analytics tools to your websites and business processes. You can track different activities and create measurements that produce actionable data.
The saying “what isn’t measured can’t be managed” is truer than ever these days. Without analytics in place, you’ll be feeling around in the dark. Data analysis helps you understand what works for your business and what doesn’t.
But these insights don’t extract or interpret themselves. Companies rely on data science and skilled business analytics experts who can crunch numbers and distil contextual value that aids company goals. If you’re interested in helping businesses work smarter and faster, taking a business analytics course can be a way to broaden your skillset and progress your career.
Make data analytics a strong part of your business by implementing it at every stage. You can do this by getting the right tools and hiring qualified people. Encourage your entire organization to make decisions based on data as well. When you introduce analytics to your organization at every level, you’ll pave the way to business growth.