New entrepreneurs starting their first business will often be overwhelmed by the sheer volume of things on the agenda. Some of your tasks and concerns are obvious, yet there are plenty of other elements of a business that need to be taken into account. Mainly, the biggest problem is understanding all the different jargon that gets thrown in your face. People will ask you about various things, and you aren’t 100% clued-up on them.
One thing that often gets mentioned is the idea of business analytics. If you’ve never run a business before, you might not be familiar with the concept. Some of you may understand what business analytics refers to, but are you aware of why it’s so important to your organization? This guide will explore things in more detail, helping you learn why business analytics is essential for modern business.
What is business analytics?
Thankfully, business analytics is a rather simple concept to understand. Businesses produce and have access to lots of data every single day. This can include marketing data, customer data, data on your sales, etc. Business analytics is simply the process of taking all of this data, analyzing it, and coming to conclusions that improve your business.
How can you carry out business analytics?
In practice, business analytics tends to work via various software programs. This is because software is the easiest way of gathering lots of information in one place. Much of the work is automated for you, delivering you sets of data to then draw conclusions. Technically, anyone can use business analytics to create solutions for a business. However, it is mainly recommended that a qualified business analyst handles the task. Still, nothing is stopping you from getting your own online analytics degree and handling all of this yourself. It’s up to your personal preference; many business owners like gaining analytics qualifications to let them understand the inner workings of their business better than ever before.
What are the benefits of using business analytics?
Or, to phrase this question another way: why are business analytics so important for modern businesses? What benefits will they bring to your organization? Let’s take a look at some of the key things you will enjoy when you start analyzing and making sense of your business data:
Make better decisions
Perhaps the underlying benefit of analytics is that it lets you make more informed decisions on just about everything. Before, you might make decisions based on hunches or instinct, possibly even by your own interpretation of how things are going. Now, you literally have the data in front of you telling you how things are. You can identify certain patterns or key things, using the data to empower your decision-making. Whenever important decisions need to be made, you can do so with more confidence after analyzing the data at your disposal.
Improve your marketing strategy
Business analytics comes in handy when marketing and advertising your business. Largely, this is down to the sheer plethora of data at your disposal in the marketing/advertising realm. You will be able to analyze so many different aspects of your target market, identifying patterns that help you develop a more effective marketing strategy. Your analysis lets you know the main areas to focus on, the marketing methods that will be most effective at reaching new customers, and so on. It will create a strategy that brings in more leads, converts them, and helps you make the most out of your budget.
Reduce overhead costs
You forget that business analytics can be applied to any facet of your company. For instance, you can analyze all your financial data to figure out how to reduce overhead costs in your organization. The data will quickly help you identify different areas of your company where money can be saved – or at least put to better use. The example above is a great indicator of this; analyzing your marketing setup helps you spend less and spend more effectively. You can also analyze things like your suppliers to find out if there are more affordable and cost-effective options out there. Put simply, if you’re spending too much and decreasing your profit margins, business analytics can help you gain control and lower your overheads.
Provide a better customer experience
Using business analytics doesn’t just impact your business, it impacts your customers as well. Think about all the information and data you can collect relating to customers. You’ve got information on their interactions, purchasing habits, and so on. By looking at this data, you can develop strategies to give your customers what they want. Something as simple as seeing someone’s purchasing history and sending an email pointing them to similar products can be hugely beneficial. Or, looking at how people interact with your site and making changes to your site to enhance the user experience. Things like this contribute to an all-around better customer experience, making them happier. As we all know, happy customers are loyal ones, contributing to regular purchases.
Understand and beat your competitors
Lastly, you can use analytics to compare your business to others. A critical part of running a business is understanding how your competitors fare against you – and vice versa. To do this, you need to analyze your rivals and see what they’re doing compared to what you’re doing. It’s a simple way of ending up with lots of information to compare against your own data, finding out if you are performing better than them. This is super helpful as you can figure out what your rivals are doing well, then implement changes to your business to elevate you above them. Business analytics helps you learn more about your competitors and what it takes to beat them.
To conclude, business analytics is a critical part of every modern organization. You need to make sense of your business, and this starts by analyzing as much data as possible. When you have access to all of this data, you can spot trends, find key information, and use it to develop ideas and strategies that benefit your company.