According to a Deloitte survey, The Analytics Advantage, 49% of businesses assert that the greatest benefit of using analytics is better decision-making. Another 16% of businesses believe that its greatest benefit is better enabling key strategic initiatives. Nearly two-thirds of respondents say that analytics play an important role in driving business strategy.
Companies now have access to more data than ever. Whether your independent software vendor (ISV) business is a start-up or an established company, data-driven insights can deliver significant business benefits. It’s like a roadmap to your company’s success.
Businesses collect a wealth of data every day, through customers’ mobile app usage, website traffic, interactions on social media and more. Companies must take advantage of this to deliver the experiences customers are looking for. If you’re not measuring it, it means that you’re ignoring the little nuggets of gold residing in your systems.
Here are the five top benefits of data analytics for an ISV:
- Finding new customers
How does a young business find more customers? Gathering data on how customers interact with a business’s website, mobile apps, social media pages, emails, paid ads, and customer service routes, allows you to begin targeting new prospective customers. Data such as purchase histories, product use information, and metrics on customer satisfaction are also helpful, enabling you to target your efforts in the right areas.
- Increasing customer retention
Customer retention analytics can be used to create competitive advantage. For example, an ISV that develops an app can monitor the number of times people use the app each day, as well as the times that they are not likely to do so. You can increase customer retention rates through push notifications and in-app messaging, improve commitment and strengthen customer loyalty. Notifications may include announcing new features and updates and offering additional benefits on top of the advantages of the app.
- Improving customer service
ISVs can improve engagement with customers by using analytics to monitor when users need assistance and which areas, or functionalities are queried regularly. Using this data, features and functionalities can be added to meet end-user expectations, which will drive up customer satisfaction and improve the user experience significantly. For example, data drives every decision at Netflix, from creative and marketing to its phenomenally successful original content arm. The company uses analytics is to gain insight into its 130 million worldwide streaming subscribers base, optimising its market, and ultimately delivering a better product.
- A marked competitive advantage
A major competitive advantage of data is that it provides a precise way to identify what is working well within certain elements of your company and then make strategic decisions based on this information. Tracking and analysing marketing data can help to inform a successful marketing strategy. Social data can help the marketing team within an ISV to identify high-performing content based on audience, trends on different platforms, and the effectiveness of a brand’s social media activity, allowing you to determine whether LinkedIn, Facebook, Twitter, or Instagram, or a combination, work best for your business.
- Predicting sales trends
Cash flow is critical for ISVs, particularly in the start-up phase. That is why it is critical to have the ability to predict sales trends. Data analysis allows you to make predictions about possible futures, using algorithms and machine learning to identify the likelihood of future results based on historical information. Using data mining and modelling to make visualisations, you can more easily identify patterns and trends. Analysing data with artificial intelligence and machine learning can help you to identify threats and highlight opportunities.
What is the best way to analyse data?
Data-driven decision making (DDDM) is simply information-based decision-making. It uses grouped historical information to analyse trends and make decisions for the future based on what has worked for the business in the past. It is valuable in making a business less vulnerable to risky decisions that go wrong.
10 ways to apply DDDM:
- By using data instead of emotion, it guards against your biases.
- It allows you to use data to clearly define key objectives.
- How you gather data is important. It must be embedded in your culture and carried out with discipline.
- Once your strategy and goals are set, you will then need to find the questions in need of an answer, so that you reach these goals.
- Once your strategy and goals are set, you will then need to ask the right data analysis questions so that you achieve these goals.
- Analyse and understand the data to ensure you make the right decisions.
- Verify the data and make sure you are on the right track. Do not be afraid to step back and to rethink your decisions.
- Use data visualisation software to enable your team to interpret the data and use it to make the right decisions.
- Be sure to apply the findings to business decisions and that you make decisions aligned with the company’s mission and vision. This is about turning the data into action.
- DDDM is an iterative process. Never stop examining, analysing, and questioning your data-driven decisions.
This first appeared in Retail Brief Africa: https://retailbriefafrica.co.za/five-benefits-of-data-analytics-for-your-business/
[Photo by Markus Spiske on Unsplash]