How to use data analytics to give your growing business a competitive advantage
Did you know that 2.5 quintillion bytes of data are created every day? In today's digital age, where everything is tracked, how important is it for a business to maximise its use of data? The short answer is very.
Data analytics allows businesses to leverage data to improve their decision-making capabilities. This has led to a spike in data strategy uptake; Gartner predicts that this year will see 90% of corporate strategies focusing on information and analytics as critical components compared to fewer than 50% in 2019.
Is your business making the most of the data you collect?
What do we mean by data analytics?
Data analytics is the processing of raw data to extract useful information to make informed decisions. So, how do companies collect data?
Many gather data, actively or passively, from sources ranging from customer engagement to web tracking and metrics from digital marketing campaigns - and many more. Each of these data sources provides valuable information that, when connected, gives a 'big-picture' view of your customers and the business.
However, the challenge with collecting large quantities of data is that valuable information can be lost if not used effectively. Raw data needs to be processed into easily interpretable insights. And data analytics does just that.
The process is straightforward:
- Set an aim, outlining what you need to know. Knowing what you want to achieve helps pinpoint your focus without getting overwhelmed with the amount of data you have. This can become the starting point for, or an extension of, your data strategy.
- Clean data so that it is standardised and consistent across the business. This increases the data's usability by dealing with white spaces and duplications, enabling connectivity across different business parts.
- Use software to analyse the cleaned data so that it answers your questions. Many newer tools are designed to interpret the data at a global level, giving you a holistic view across the different dimensions of the business.
So how is this data analysed?
Types of data analytics
The nature of the analytics depends on the maturity of your data collection and analytics capabilities. These are the main types:
Exploratory analytics
This process has little initial direction and focuses on exploring data to find relationships and connections that can be used to draw conclusions and develop hypotheses.
Descriptive analytics
This provides businesses with a clear picture of past events or a real-time status. Examples include a view of a marketing campaign; a dip in sales, or the results of a new launch.
Diagnostic analytics
To take it one step further, data can be analysed to explain why something happened by identifying the variables that caused the event.
Predictive analytics
Now looking to the future, predictive analytics provides insights into what will happen next if the status quo remains unchanged. This involves a combination of diagnostic analytics, artificial intelligence, and machine learning.
Prescriptive analytics
This is the most advanced form of data analytics and can be used to suggest business strategies. It comes up with interventions to upcoming issues and responses to new trends.
Data analytics can provide a multitude of insights into a business that can then be translated into action. How could your business benefit from data analytics?
Data analytics fosters growth
Data analytics provides a detailed picture of what is happening in a business. For example, it can be used to show the success of marketing campaigns and how a particular result was achieved. This information can be used to inform future campaigns and refine business strategies.
It provides valuable insights into customer behaviour, characteristics and purchase habits. These insights help businesses shape their offering and improve their marketing campaigns, product development, customer services and more. It takes the guesswork out of the relationship between the company and its customers.
It can identify barriers to success. Issues are brought to light quicker; mitigations can be implemented swiftly, thus minimising damage. This has budgeting benefits but also helps leaders implement a 'fail fast' approach.
As you can see, a wide range of business decisions can benefit from data analytics. Strategy is informed by reliable information, increasing the chances of its success. The next move can be confidently determined with a clear view of the business's past, present and future.
How to get started with data analytics
Consider what conclusions could be drawn from the data your organisation has access to. There are opportunities to learn from the past and predict the future when it comes to your operations and the needs of your target market.
Implementing a data strategy is essential to successful data analytics. Not only does it set guidelines for handling data across the organisation, it also ensures no insight is left undiscovered and all areas of the business use data to its full potential.
