Estimated reading time: 7 mins
Many people are learning about the benefits of data analytics and big data. One of the main benefits being that you can use the data collected to drive operational performance in your company. Edward Demming used the quote:
“In God we trust, everyone else brings data”
This is quite fitting really. The challenge with data analytics is not in the gathering of the data, the tools we use to analyse it, or how we structure it, but instead the challenge is working out what problems we need solving in the first place.
An Example of Business Analytics Used to Increase Business Growth
A brilliant example of a company that has used data analytics to increase growth is From You Flowers. This company is an eCommerce floral company. The company CEO, Michael Chapin, decided not to outsource his analytics; instead, he built a team within his company. He employed some of the top graduates from around the country and then provided them with over 10 years of data he had collected about the business.
Michael made sure the data analysts knew that every part of his business could be optimised.
The results speak for themselves:
- Before using analytics, the business was steadily growing at 10% each year from 2002 to 2011.
- Since Michael introduced an in-house team of analytic specialists, the business has grown by 30% every year for the past 5 years.
Many businesses could benefit from following in Michael’s footsteps. Employing a business analyst is a brilliant way of finding out the weak points of your business. You can then make changes to improve them. Another brilliant idea is to train as a business analyst yourself. For example, Aston University Online offers an online Masters in Business Analytics, which will teach you everything you need to know and give you a better understanding of data analytics. This course will teach you to:
- Evaluate and assess – you will learn to extract meaningful information from the data you’ve collected.
- Predict and project – you will learn to estimate potential outcomes, anticipate patterns and model scenarios.
- Prescribe solutions – you will learn to guide your business decision making.
- Develop – not only will you be able to improve your business; you’ll also develop as a person. You’ll learn new communication, consultation, presentation, leadership and business skills.
From You Flowers is a brilliant example of how data analytics can increase business growth. There are a number of areas where the data analysts employed by Michael used analytics to transform the business performance. This transformation led to:
- Increased profits
- Improved customer satisfaction
- Boosted revenue
- Improved customer retention
Below are some of the areas they and your business could look at:
1. Improved Service Level Performance
From You Flowers use a network of florists to complete their orders, as well as having distribution centres of their own. Data analytics have enabled them to work out their ability to meet their customers’ demands. Most customers looking for flowers are often looking for same-day delivery. Data analytics have allowed this business to look at the impact of traffic patterns and how long it takes each supplier to deliver in major cities. This has then allowed them to fulfil commitments, or refuse business where they know that they cannot meet the delivery times, or next day delivery promise.
This could be used in your business too. It will help you to work out which suppliers are able to help you meet customer demands, and which suppliers aren’t reliable. By using the best suppliers, you will be able to improve customer satisfaction.
2. Better Order Fulfilment
There are many factors that can determine how good a business is. Some of the factors that might determine how good a florist is might include:
- The day of the week
- The time of day
- The products available
By being able to keep an eye on your supplier performance, you will be able to gain a better understanding of which of your suppliers will be able to give you the best chance of an order being successfully filled, depending on location. This increases order fulfilment.
3. Provide Your Customers with Maximum Value
You can use the information you’ve gathered from your customers to see which ones are likely to come back and provide you with more business. This allows you to make the most out of your marketing investment. Knowing your customers well and marketing directly to them will help you to build a strong long-term relationship with them. This in turn:
- Increases the chances of repeat business
- Maximises their value to you
4. Improves Supplier Management
Keeping track of refund requests and customer complaints will allow you to get rid of suppliers who aren’t performing well, either from:
- A product quality perspective
- A timing perspective (not meeting demand)
This all helps your clients get the best quality products on time. Clients who are happy with the service or product are far more likely to return for repeat business, so getting this right is important.
5. Cut Down on Costs
Many businesses (like the flower business) are seasonal with certain days or times in the year, having a lot more demand than other periods, e.g. flowers are likely to be more popular on days such as Mother’s Day or Valentine’s Day. A business like this needs to look at how they can use the data they have collected to reduce costs in their business. One way you can do this is by employing staff on a flexible basis. This way you can choose when you need them to work, i.e. the busy periods.
Switching the analytic focus on the business will help improve your staffing levels and in turn, will help to cut down on your operational costs.
6. Improved Advertising
All advertisements are A/B and sometimes C split-tested. All pop-ups, landing pages and product images are reviewed to see how effective they are before tweaks are done to improve results.
Data analytics will even look at the position of products on your webpage in order to work out where they should be placed in order to increase engagement and sales. Advertising and marketing can cost a lot of money, so it’s important that all businesses know what works well and what doesn’t. Data analytics can give you this information.
7. Improved Product Management
There are hundreds of thousands of products that a business could offer. Data analytics can help you to work out which products are the most popular and tell you if they become more popular at a certain time of year. This data will help you market the right products at the right time, which in turn will help boost your sales.
How Can Business Analytics Help Businesses Who Want to Expand?
Growing a business can be extremely tough. It takes a lot of work, dedication and insight into the future. The majority of successful businesses have become successful because they know the needs of their customers, know how to market to them and know where they’re located. In order to find this information out, most businesses collect data. They use this data to inform, drive and incite action. These are the 5 main ways you can help your business expand by using the data you’ve collected:
- Expansion planning – If you’re wanting to expand your business, then it’s a good idea to collect information on your customer base, employee payment, equipment and asset maintenance and delivery scheduling. All of this information can help you create a detailed expansion plan.
- Identify your audience – You can use the data you collect to work out who your customers are. You can find out what people think about your business and brand and where your customers are located. This information will help you to find your perfect demographic. It can then be compared with the available census data to give you an even clearer view. Once you know your audience, you can then look at other things such as your competitors. This will allow you to choose an area that offers you the most in terms of customer potential and expansion.
- Produce a business plan – The information you collect provides you with information about what’s happening in the world right now, but you also need to find out how well your business is performing. Business analytics can help you forecast trends in turnover, sales and growth. You can use this information to develop a business plan.
- Develop your marketing campaign – The information you’ve gathered on your competitors and customers will help you to design a marketing campaign that is aimed at your target audience. You will be able to narrow down the messaging tone, branding details, and consumer preferences, e.g. the offers that will make you stand out from your competitors.
- Take action using predictive insights – Business analytics can provide you with predictive insights that will help you stand out from your competitors and optimise your expansion. This will help you to take negatives in your stride, overcome them quickly, and improve performance in the long run.
Whether you want to increase sales or expand your business, it’s a good idea to spend time analysing the data you’ve collected about all the different areas of your business. It’s amazing just how much you can learn about your business by looking at the data you’ve collected. What are some of the unexpected discoveries you have made, and which areas of your business are you going to analyse next?