In a world of evergrowing marketing and businesses swinging up and down with each financial quarter, “data analysis” has become the buzzword here, and rightly so. Analyzing data can boost performance, efficiency, and profitability for various businesses, especially those in the small scale magnitude.
This is because data analytics plays an instrumental role in the collection, transformation, and analysis of data to achieve insights that will help make possible predictions about a potential future, which will further drive well-curated decisions. Let us understand more about data analytics by undergoing the benefits, challenges, and some suitable examples of the same in an efficient manner through this blog.
Understanding Data Analytics:
In its core essence and simplistic terms, data analytics is all about making the right sense of the enormous amounts of information you have access to regarding your business. Just look at your business as a puzzle with endless pieces. Data analytics will collect all these pieces, categorize them based on the different parts of the business it contributes to and finally put them together to present a way bigger picture. It’s also kind of like the analogy of a detective cracking a case by aligning all the clues of different peripheral issues together.
If it were to be a person, then, a data analysis tool is your go-to advisor for all your critically important business decisions as a small business owner. Instead of taking a leap of faith over hunches and gut feelings, you are put to awareness about the real-world information extracted from all your business activities. This serves as evidence for all the successful decisions and lessons for decisions resulting otherwise.
Let’s say you are a small-scale business owner with fashion accessories being your niche. Your website analytics show up that a specific design of earrings has become the major point of a high CTR (Click-Through Rate). So, how does data analytics help you? Well, it just did by revealing to you the product which is most likely to scale your business well for a particular period. Besides, it will also take a step forward to reveal to you why is it so important. The reasons can be many, like a recent fashion event, a celebrity endorsement, and much more. Now that you have this information, you can adjust your marketing efforts accordingly to capitalize on the trend.
It is important to note that data analytics are not considered to replace human decision-making, rather it helps to facilitate better decision-making. The precision of scaling and the direction of the business ultimately remains in the hands of the owner. Analyzing data accurately is just your passport to navigating the dynamic waters of the business world, one data point at a time.
The Benefits of data analytics for small businesses
Data analytics can help small businesses achieve the following benefits:
- Understand customer behavior and preferences: As a small-business owner, categorizing your customers based on various parameters such as purchase history, demographics, feedback, and online behavior can help make a more localized sales funnel for each kind of customer that interacts with your business touch-point such as an ad banner or a sponsored post online. This is where several business analytics services can help you carry out this work efficiently. It can facilitate you in tailoring the products, services, marketing, etc. to fulfill the different needs and expectations of different kinds of customers. Besides grasping what’s happening and working right now, data analytics have their way of giving out patterns of what can happen and work in the future as well.
- Extensively Record KPIs: Key Performance Indicators (KPIs) are crucial for understanding efficiently where a business, especially a small-scale one, is heading for growth. They should not be dealt with ignorance at any cost and therefore, it is important for any company to monitor and measure them on a regular basis. They are essential in the immediate identification of inefficiencies and opportunities. Thus, data analytics solutions for small businesses can help you carry out exactly this kind of work with ease. Some important examples of KPIs include sales, revenue, costs, etc. The KPIs can be measured based on a timeline i.e. monthly, quarterly, or even annually.
- Enhance decision-making and problem-solving: Facts, evidence, and analysis are the core aspects of business analytics service providers. These 3 concepts give a clear vision to drive small businesses into a well-informed stage concerning their growth. You can easily figure out what can go wrong, have a holistic look at your best options, and thoroughly check and test the risks and rewards before implementing the final decision.
- Gain competitive advantage and innovation: In terms of competitor analysis, data analytics can play a huge role in delivering mind-blowing insights on the various aspects of your competitor’s intriguing performance. You can learn from both the successes and failures of your competition. Therefore, by analyzing data, you can fill out the gaps in your business in no time by experimenting with a familiar approach that has already been tested and worked out successfully for one or many of your competitors.
Example Data Analytics for Small Businesses
To illustrate how data analytics can revolutionize small business operations, here is an example of how small businesses have used data analytics to achieve their business goals:
A small-scale business that provides traveling services used SAS to gather and analyze customer data from high authority sources such as loyalty programs, travel websites, and booking systems. The travel agency counted on this data to group its customers based on their traveling behavior and choices for both one-way and two-way transport bookings. This sort of grouping helped the business to draft some customized packages that can be launched as part of a campaign during the summer holiday season. This attempt to personalize the traveling experience for the customer was also put forth to be the agency’s USP- unique selling point. As a result, they crafted new products and services that increased their customer retention and acquisition by 25% in merely two years.
Conclusion
Data analytics are significantly instrumental in facilitating small businesses to understand their customers more effectively so as to provide a better experience in exchange. As a small business owner, when you analyze the relevant data with the right tools and techniques, you can aim flawlessly aim for maximum customer acquisition or retention depending on your business goals, primarily by optimizing the necessary parts of the sales process, making bold decisions backed by undisputed evidence and reaching out openly for innovation. Despite the potential challenges one can face with data analytics, you can also take vital measures to overcome them at the same time.
