From improving your marketing campaigns to increasing your company’s cash flow, there are a number of benefits of using data analytics in business. Through the gathering and examining of business data, for instance, you can better identify business trends, new opportunities for growth, and potential red flags — and in turn make smarter business decisions while improving workplace productivity and cash flow.
Today, our guest author, Poppy Williams of TechBizGuide.com discusses three key benefits of using data analytics to run and grow your organization and highlights a few of the best data analysis tools for small businesses.
What Are Data Analytics in Business?
Before discussing the key ways in which companies can benefit from analyzing their business data, we’re going to take a closer look at the different types of data analytics: Descriptive, diagnostic, predictive, and prescriptive. These are the four primary types of data analytics used by businesses, and each one can benefit small, medium, or large organizations today, tomorrow, and years down the road.
Descriptive analytics, the simplest type of data analysis, looks at the “what happened” or “what is happening”, while diagnostic analytics looks at the “why is this happening” or “why did this happen”. Predictive analytics, as the name implies, look at data to make future predictions — while prescriptive analytics are used to determine the next course of action.
When to use each type of data analysis will typically depend on the situation, but in some cases, you’ll want to look at each in sequential order. A few of the best tools for gathering business data include SAS Business Analytics (SAS BA), QlikView, and Board.
1. Effective Marketing
Now that you’ve learned a bit about the different types of data analytics, let’s discuss the benefits of analyzing your business data — starting with how the information you collect can help you to choose the right marketing campaigns and strategies.
Data analysis, for instance, helps you to better understand your target audience, customer demographics, and the shopping behavior and habits of your consumers. This in turn can be used to inform your marketing strategy and effectively reach your target audience. You’ll get a better idea of how, when, and where your customers shop, discover new products, and interact with their favorite brands.
Google Analytics is the most popular type of marketing analytics tool, but some other options include Kissmetrics, Looker, and Ruler Analytics.
2. Increased Cash Flow
Just as data analytics can help to improve your marketing strategy, it increases cash flow as well — helping you to better manage your accounts receivables, inventory, and sales. As a few examples of how data analytics increases cash flow, it can be used to:
- Predict invoice payment dates.
- Determine when to offer sales discounts.
- Reduce inventory holding costs.
- Identify your most profitable products and customers.
- Improve how and when you collect payments.
To increase cash flow and ensure you’re getting paid on time, consistent invoicing should be used along with data analytics. Stick to a billing schedule that works for your business and use an invoice generator template to easily bill your clients and customers. Many free invoice generator templates can be customized to include your logo, preferred text, and photos — and they can be downloaded in different file formats depending on whether you wish to mail, email, or upload the invoice online.
3. Improved Customer Retention
Analyzing business data — specifically predictive analytics — improves customer retention in several ways. According to Lexer, this type of data can be used to predict the lifetime value of each customer, reduce customer churn rates, predict a customer’s next purchase, and provide a great customer experience overall. Data analytics can tell you a lot about your customers and what you can do to keep them happy and loyal to your brand.
Using Data Analytics Benefits Your Business in Many Ways
If you’re not already using data analytics to run and grow your business, now is the time to get started. Make a list of the goals you’d like to achieve through business analysis, and consider the analytics tools that could be used to obtain the data you need. You might even choose to hire a data analytics professional or see if any existing employees would be willing to learn the basics of data analysis. After all, from business process management to robotic process automation, the business world is always changing, and understanding bpm & rpa requires precise data analysis.
Analyzing business data helps you to unlock valuable insights about your customers, products, and financial performance — and introducing analytics to your company is well worth the time and investment. You’ll improve your marketing strategy, increase cash flow, and boost customer retention, which leads to long-lasting business success.
About the author:
Poppy Williams created TechBizGuide.com to help small businesses make the best possible choice of software that can make a difference. Since 2019, TechBizGuide.com has been seeking and testing software that can give small businesses a boost. It connects you to insights and software to help you do better work.