Turning data into pound isn’t just something for big corporations now. Thanks to relatively inexpensive software and easy-to-use, drag-and-drop tools, pulling data and analysing it – with the goal of growing your business – has never been more uncomplicated.
In other words, even if numbers make your head spin, you can still understand data and make business analytics work for you.
What is business analytics?
Business analytics is the process of looking at and assessing the wealth of data your company already has at its disposal and using it to make data-driven decisions. It moves beyond just looking at numbers to see what happened. Instead, business analytics also endeavours to give insight into why things happened and suggests what steps to take next.
What are the benefits of using business analytics?
In just a few years, the implementation of data analytics has skyrocketed. Big data adoption jumped from 17% in 2015 to 59% in 2018, a whopping 42% increase. Nevertheless, a recent survey also found that many businesses are not tapping into the data that they already have at their disposal. Between 60% and 73% of all data within an enterprise goes unused for analytics. It’s a startling number when you think about the potential benefits to small businesses.
Here are just a few:
- Keeping you on budget. If you’re like most small companies, your marketing budget is tight. Using business analytics helps you maximise every pound by helping you get to know your customers better, anticipate their ever-changing needs, get an edge of the competition and bring innovative ideas and products to the marketplace.
- Better decision making. Not sure how to use your marketing budget? Or which keywords are most effective? What about predicting your biggest sellers over the holiday season? Business analytics uses data to inform decisions and improve accuracy, efficiency and response time.
- The ability to measure accomplishments against overall goals. Business analytics gives you a clearer image of goals and objectives. By using data visualisation, businesses can track their current and past performance against key performance indicators (KPIs), goals and objectives.
- Staying in the know. Business owners and marketers can use analytics to track trends, customer behaviour and market shifts. This data will allow you to keep on top of things and make changes dynamically when and if supporting data indicates it’s time.
- Building efficiency. Nowadays, the speed at which businesses can garner data is lightning fast. Thanks to business analytics, you can identify any breakdown in progress or performance in almost real-time, saving time, money and resources.
What are the different types of business analytics?
Think of business analytics as happening in three different stages:
- Descriptive analytics. Digs into your data and uses KPIs to show you the current state of your business. For example, real-time information about your customers’ demographics, interests or purchasing behaviour. Maybe it’s sales numbers or financials. It could be social metrics like how many Facebook likes, Tweets or followers you have. Descriptive analytics doesn’t try to establish cause and effect relationships. It’s essentially cold, hard numbers.
- Predictive analytics. This type of analytics goes one step further. It tries to predict future actions based on trending historical data. Here are a few examples:
- Use past information to work out what types of products your customers might be interested in based on recent numbers, and whether they are likely to purchase again.
- If you have a limited budget for your marketing campaign and can’t afford to offer discounts to everyone, based on description analytics, predictive analytics could inform you about the customers who are most likely to buy your product.
- Prescriptive analytics. This form of business analytics can show you the best course of action for a given situation. While descriptive analytics shows what has already happened, and predictive analytics tries to forecast what might happen next, prescriptive uses that information to give you potential solutions based on similar situations (Year-on-Year data, seasonality data, product launch data). For example, ticket sales for a Christmas show are lagging compared to last year’s sales. Prescriptive analytics may suggest a need to lower prices or add a matinee performance in response.
User-friendly analytics resources for small business
- Google Analytics. Google is king when it comes to analysing your online world, whether it’s your website or social presence. Still, a recent study found that less than 30% of small businesses use website analytics, call tracking or voucher codes. About 18% of small businesses admit to not tracking anything at all. That’s where Google Analytics can come in to play. You can sync your Google accounts (including AdSense) to get insight into ROI on marketing, ad campaigns and more. Best of all, you can try the basic version out for free, which may be powerful enough for your small business. If you need more in-depth analytics down the line, you can upgrade later.
- Easy-to-use software. With today’s intuitive tools, business analytics has never been more natural. Nowadays, there’s plenty of reasonably-priced apps – like Power BI – that lets you easily transform data into visuals, and then analyse and share them with colleagues on any device, giving you unmatched insights. In addition, software like Visio lets you bring ideas life with easy-to-read diagrams created from various sources, including your existing Excel data.
- Built-in email and spreadsheet tools. Chances are, you have some basic data-gathering capabilities already at your fingertips. Many spreadsheets have easy-to-read charts and graphs on board that’ll help you better understand (and present) your data, via formatting, sparklines and tables, plus capabilities for creating forecasts with just a few clicks. The same goes for email. Find one with a lightweight Customer Relationship Manager (CRM) tool built-in, and you’ll be able to easily manage customer data, including emails, meetings, calls, notes, tasks, deals and deadlines in one place. CRM data can hold a treasure-trove of invaluable information about your company’s customers, and sales and marketing operations.
Every type of business can benefit from using business analytics. No matter which tools you choose in the end, gaining better insight into your data will help you stay on budget, on task and in-the-know.