/ Business intelligence and data analytics: how to operate effectively in the digital marketplace
Business intelligence and data analytics: how to operate effectively in the digital marketplace
Modern business (both large and small) utilizes massive amounts of data. From marketing to internal operations, digitized data is used to measure everything. The practice of taking data and utilizing it for business purposes is called business intelligence (BI).
The benefits of data analytics and BI are vast — and companies that take advantage of this technology are reaping the rewards. In this article, we will look closer at how data analytics can help businesses operate effectively in the digital marketplace.
The need for effective data analytics
Data is currently being generated at an astonishing rate, and this trend will only accelerate with time.
All businesses have access to vast stores of data that can be used for BI purposes, from marketing campaigns to operations, and financials. For example, a marketing firm can utilize big data for lead generation and more effectively target consumers who are searching for their products online.
Data is also now available from third-party sources such as news articles and social media posts. By monitoring this data as well as internal company data, the insights gleaned provide a greater understanding of how the business works as a whole and how it can improve relative to the rest of the industry.
5 benefits of data analytics for businesses
The benefits of data analytics are vast and varied. Companies that take advantage of this technology are able to improve their bottom line, increase efficiency, and understand their customers better.
Some specific benefits of data analytics include:
1. Data-driven decision making
The first and most obvious benefit of data analytics is that it allows businesses to make data-driven decisions. Analytics provides insights into past performance, current trends, and future possibilities. This information arms business owners with the knowledge they need to make informed decisions about where to allocate their resources—and what strategies to pursue.
Use case: Let’s say a business wants to increase its online sales. By analyzing data about customer behavior, the business can understand what products are being searched for, what pages are driving conversions on their website, and how much traffic is coming from social media. Armed with this knowledge, the business can create targeted marketing campaigns specifically for increasing online sales.
2. Improved efficiency
Data analytics can help companies improve their operations and increase efficiency in various departments, including HR, finance, marketing, sales, purchasing, and operations.
Managers who use data analytics are able to make informed decisions about the best course of action for any given scenario. Instead of following gut feelings or instincts about how to handle a certain situation, the manager can look at the data and see what actions led to positive outcomes in the past.
Use case: Let’s say a company is considering hiring more employees for its marketing team but does not want to over-hire or under-hire. By analyzing previous employee performance and retention data, the business can get a better idea of how many employees it needs to achieve its marketing goals.
3. Enhanced customer understanding
Another benefit of data analytics is that it helps businesses better understand their customers. Analytics can identify customer trends, preferences, and buying habits.
Businesses can use this information to create more targeted marketing campaigns, products, and services. Businesses can also use this information to personalize the experience for their customers, offering rewards or faster service based on past behavior.
Use case: Let’s say a clothing store wants to understand its customer demographics better. By analyzing data about website activity and social media interaction, the business would be able to learn things like which age group spends the most on its website or what social media platforms are being used to discuss their products.
4. Increased Revenue
The fourth benefit of data analytics is that it often leads to increased revenue. This happens in two ways: businesses can sell more products or services to current customers and attract new customers by understanding them better.
Use case: Let’s say a business sells home appliances online. By analyzing data about customer behavior, the business can identify which types of appliances are most frequently purchased together and thus create a package deal that might help sell more products to the customer.
As another example, imagine a landscaping company analyzes its data and sees that its website is not getting as much traffic as it should be. In this case, the business could take steps to increase its web traffic, such as writing quality content or leveraging social media. This would improve traffic volume on their site, increase trust with potential customers, and be a great source of lead generation.
5. Improved Business Relationships
Finally, data analytics can benefit businesses by strengthening their relationships with other companies in their industry.
By understanding how one company is performing compared to others, a business can identify where it sits in the marketplace and analyze how it can improve its performance. This is valuable to companies as they compete for customers and as their industries evolve.
Use case: Consider a company that directly competes with an up-and-coming player in their market and finds out that they are not getting as much traffic or conversions as the other business. By analyzing the data, the company can understand what it is doing wrong and how to improve its marketing strategy.
If your business is not currently using any form of data analytics, the first step is to collect data. This could mean installing a new software program, tracking certain metrics more carefully, or taking stock of data your company already has access to.
Start small with a few goals in mind and build from there. Once you have a good understanding of how customers are interacting with your products or services, it will be easier to identify where improvements can be made.
With the data in hand, your analysis methods can be implemented. By utilizing a business intelligence platform, your company can quickly identify trends as they emerge. The platform can also automate specific processes, so you don’t have to spend as much time manually reviewing data.
While it may require a significant investment of time and effort to implement a business intelligence strategy, the benefits will be well worth it. Your business will not only operate more effectively in the digital marketplace, but you’ll also be able to make more informed decisions that will lead to increased revenue and improved business relationships.
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