Data analytics in the 21st century is the closest thing we have to the oil rush of the 1860s. Data is an incredibly profitable asset, but only if you know how to use it. Like oil, data needs to be refined before you can monetize it. And in today’s digital economy, the world produces about 79 zettabytes worth of oil every year.
You can sit on it and watch your neighbours and competitors get rich. Or you can learn how to take advantage of data as well.
This article will show five of the most powerful ways data can be harnessed to drive business growth.
Image Credit:- The business of big data (Statista)
1. Data spearheads all lead generation
It doesn’t matter if you have the best product or service in the world if you don’t know how to reach your customers.
Your customers are busy people who don’t want to hear from you unless it’s worth their while.
Knowing what they want and how to reach them can mean the difference between a dead business and the next trillion dollar enterprise.
With the advent of data analytics services, businesses can now use channels such as social media to find out what customers really want.
Facebook, Twitter, Pinterest, LinkedIn, YouTube and every other platform can be data mined with applications to fetch the age, gender, email address, geographical location, and even political affiliation of millions of customers.
Additional tools can be used to organize this data into simple, easy to understand information that segments the consumer base according to any desired criteria.
With this, businesses can quickly determine how to prospect for customers. They can track the effectiveness of campaigns they use to reach out to customers with innovative techniques like split testing.
Metrics such as bounce rates, dwell time, and even tools like heat-maps can help you understand what your customers are really thinking about as they read your website.
This is the same as having someone look over the shoulder of your customers and asking them questions about what they’re interested in as they peruse your website.
This provides incredibly practical, useful information that could be used to boost profits if understood and implemented well.
2. Data tells you what works and what doesn’t
As your business grows, you will have many different heads in your organization debating about the best possible course forward.
Out of the countless decisions you can make, how do you know for sure which one leads to profits and which one leads to dead ends?
As a rule of thumb, any good data on hand beats opinion and speculation.
The power of your business lies in micro data that others are failing to take advantage of, not macro data.
This is the data obtained from surveys, personalized trackers such as cookies, revealing data such as user age, ethnicity, location, and political affiliations.
Making informed decisions based on micro data will yield exponentially more powerful results because you have concrete, hard images of what your customers are like.
This leaves less room for guess work and the ability to target specific individuals based on specific tastes.
3. Data analytics services mitigate risk.
Every enterprise involves risk. Being a business owner means facing the prospect of employee theft, legal liability, uncollected receivables and unpaying customers.
Facing too much risk recklessly can lead to early bankruptcy. Only 45% of businesses manage to survive their first 5 years after all.
So what is a business owner supposed to do? Never take risks?
It’s all about tactical risk mitigation. Data analytics helps businesses understand the specific risks that affect them with predictive measures that can then be channelled into preventative measures.
Consider a retail business; theft and shoplifting are non-trivial problems for many businesses. Especially ones with low profit margins.
To resolve this problem, an enterprise can run a statistical model that predicts actions and events to determine which of their store-fronts is at higher risk of theft.
The business can then use this information to tactically increase security expenditure at the right places to target and mitigate risks surgically.
Also, consider the costs involved in the manufacturing of a product. If a business overestimates a product’s demand or if it fails to perform well due to market factors, corrective action can be taken.
Data analytics can determine the appropriate price for a clearance sale to reduce inventory at their stores. Even going so far as to ensure product lines in the same business don’t undercut the product for sale.
4. Personalization is the biggest driver of the consumer experience
The consumer profiles gained through data analytics allow a business to create an incredibly personalized experience.
A retail enterprise can put this data to good use. Sales data can be combined with social media campaigns to create targeted campaigns focusing on the biggest customers.
Behavioral analytics models can optimize the consumer experience even further. Predictive models can be used to push last minute product additions to shopping carts to increase sales intelligently.
Image Credit:- Growing complexity of data to boost growth (Businesswire)
5. Data analytics is the new heart of security
All businesses face security risks that can vaporize years of profits in just days.
The hardware and software complexity means highly skilled security professionals are mandatory, not optional. And the rise of constantly new disruptive tools in the market leaves room for fresh new zero day exploits that can tank even the most well protected business.
Thankfully, a platform as a service model can help businesses to experiment with protection models to see which one fits them best.
Data analytics can be used to visualize, predict, and audit logs to determine the course and origins of an attack.
Combining this with statistical models, monitoring tools, and predictive data analytics, businesses can detect breaches the moment they occur so that security teams can take immediate action.
The bottom line
Data analytics is invaluable in helping businesses assess their strengths, the target market, and the competition.
You can take full advantage of data, but it’s essential to involve professionals who can help you turn it into actionable solutions.