Benefits of Data Analysis for your Business
Data analysis is essential for your business to improve customer experience, increase sales revenue, reduce purchase risk, and improve high value kpi’s.
Data fuels most of the modern business world. Computers and smartphones produce and store massive amounts of data. In recent years, the amount of generated data has only increased as many people willingly post their personal data publicly online which businesses will happily collect.
Businesses collect data because analyzing the gathered data can provide invaluable insights that can improve sales and profitability. Businesses, irrespective of industry, use and analyze data to find any way to improve profits, the customer experience, or discern any other advantage. Regardless of how a business collects its data, there are inarguable benefits of analyzing data to improve a company’s performance.
1. Anticipate Needs
Businesses are under an increasing amount of pressure to not only attract new customers but to maintain their current customer base. Customers have high expectations and will not settle for companies that do not continuously improve their products. A service or product that does not adapt to meet customer’s expectations will quickly lose business.
Businesses want to keep up with their customers, but it can be hard to gauge what direction the business needs to move in. By analyzing data trends, businesses can anticipate their customer’s needs and begin working on improvement plans sooner. If a business can catch a growing complaint in its customer base early through data analysis, the business can develop a response before the complaint reaches a problematic level.
Customers may never know what their future needs will be taken care of before there was an issue because of data analysis.
2. Risk Reduction
Data analysis helps provide fraud protection and increases overall security. By monitoring data, a business can detect any anomalies and investigate if the data change is the result of criminal or nefarious activity. Once fraud activity is detected, a business can track any accounts associated with the fraud to try and limit potential damage. Data analysis geared for fraud detection is often automated with a program sending suspicious activity for a human employee to review.
Data analysis can even save businesses significant amounts of money. Programs monitoring wind turbines at Duke Energy noticed an increase in vibration after maintenance and alerted employees. Employees were able to fix the issue which saved the company $4.1 million by preventing further damage all thanks to risk reduction data monitoring. Data management and analysis in combination with transparent reporting help keep businesses and their customers safe.
3. Performance Indicators
Data analysis was primarily used “after the fact” for many years where businesses took action and collected data on the action’s reception afterward to inform their next action. While this version of data analysis is still incredibly valuable, real-time data allows businesses to “proactively drive their own destiny, rather than just reflect on it” as explained by Taylor Barstow. Using real-time data analysis lets businesses deal with situations at the moment and respond faster than reflective data analysis allows.
4. Data-Driven Marketing
Small businesses do not have the massive marketing budgets of larger companies, therefore they must be more precise with their marketing and spend money where it will yield the biggest return. Data-driven targeted marketing allows smaller businesses to successfully market their products without breaking the bank or wasting money.
Data analysis provides website marketing insights that can help a campaign cast a wider net and reach new audiences or entire markets. Data analysis may reveal an overlooked demographic or location a business could expand into. Online tools like Moz and SEMRush can help a business understand who their customers are, where their customers are, what their customers want if their customers are happy and much more.
5. More Personal
31% of shoppers said in a survey by Infosys that they wished the shopping experience was more personal with 59% of shoppers believing personalization was a noticeable influence on their purchases.
Customers want to feel like the businesses they buy from care about them personally. A basic way small businesses can personalize their content is to add a field in marketing emails where a customer’s name, collected through previous purchases or user account, can be slotted into the greeting.
6. Showing Relevant Products
Businesses earn a profit from selling products; the more products customers buy, the more money the business makes.
Businesses are constantly looking for ways to entice customers to buy more products and data analysis can offer a way for businesses to appeal to their customers through personalized product recommendations. Businesses can use customer data like location or previous purchases to suggest new relevant products. Displaying winter clothing ads to a potential customer when they live in a cold climate is more likely to lead to a sale than showing the same customer beach attire. This also makes the customer feel like their shopping experience is personalized to their needs, endearing them to the business.
Data analysis is a vast and powerful tool for businesses of any size. Small businesses can use data analysis to ensure they are spending money where it will be most effective. Real-time data monitoring can detect problems and alert businesses so they can act before the issue balloons. Data can also make customers feel their shopping experience is more personal thereby improving the overall customer experience which translates to sales. Data analysis has many applications and is a valuable asset to any business.