Biz Tips: What Are Analytics and What Makes Them So Effective?

Biz Tips: What Are Analytics and What Makes Them So Effective?

Biz Tip:

What Are Analytics and What Makes Them So Effective?

For many business owners and managers, analytics remains a mystery, especially if their enterprise is a newer one or one that has been slow to adopt technology. If you’ve been hearing that you should have an analytics program but don’t know where to start, this article is for you.

We’ll take a look at the definition of analytics from a business perspective and more importantly, examine why analytics is so effective in helping your company reach its unique goals.

The Evolution of Analytics

Analytics is a process where you take data and the underlying facts and present that information in the fastest consumptive model possible. So, what does that mean, exactly? In plain English, analytics converts data to useful information that allows you to derive important insights and take action.

In essence, analytics does for modern-day businesses what savvy entrepreneurs used to do manually or even intuitively without a formal process. For example, successful small-town general store owners in the 19th Century had to live and breathe their business. “Successful” is the keyword here because without understanding the minutiae of the business, store owners would quickly go under.

Not only did these clever retailers know exactly what customers wanted and how to display these items in their stores, they figured out optimal store hours and how to staff their shops for the best bottom-line return. They knew where to place their stores to generate the greatest foot traffic and what was going on in their customers’ lives that might impact sales, like births and weddings.

This all changed after World War II with the onset of “big box” stores. This new type of retail establishment jettisoned presentation, personal service, and often, quality. The idea was simply to offer consumers the greatest number of options under one roof, typically at a competitive price.

By the end of the 20th Century, however, some retailers who wanted to compete with the largest companies like Sears and Walmart understood that by analyzing information and seizing on divined opportunities, they could get a better toehold in the market. Personalization underwent a renaissance, and the retail world witnessed the birth of analytics, which was quickly adopted by other business sectors like politics, real estate, and media.

The Benefits of Analytics

You might wonder why something that mom-and-pop retailers were doing back in the 1800s is a novelty today. To comprehend the full benefit of analytics for modern businesses, you need to remember what major revolution occurred in the 20th Century: the advent of computer technology.

This technology allows businesses to make analytics scalable in ways that were never imaginable before. Imagine trying to run those old-fashioned general store analytics in your head on 1,000 outlets. Impossible, right?

But today’s computer science lets you input or even automatically collect crazy amounts of raw data, so you can manipulate it and hopefully, use it to derive insight that you can then use to reach business goals, usually increasing revenue.

As an example, you could collect age demographics on the shoppers at all your various retail outlets that would let you place age-appropriate merchandise at the right stores or open new outlets in the most profitable neighborhoods. What would take months or longer to do manually, computer systems can do in an instant.

Now, there was a time early in the history of analytics where some adopters got caught up in collecting and analyzing too much data without any specific purpose behind it. That’s still a danger for some businesses that don’t have a roadmap for their analytics program. Just because you can doesn’t mean you should, as the adage goes.

The beauty of analytics shines through when you take the time to first decide what you need to know and how that information will augment your business. Anyone can collect massive amounts of data these days; what you do with it is what separates top companies from the rest.

In addition to removing the labor barrier behind game-changing insights, modern analytics has additional benefits. To start with, it’s an incredibly reliable tool to predict behavior. While there is no 100 percent guarantee, analytics can come close to presaging what customers will do, so you can plot your next move.

Because of analytics’ ability to process enormous amounts of data, you can get as granular as you want. Imagine you’re looking at a cashier’s receipt from a recent customer transaction. Not only can you see what they purchased and when, but you can see whether they used coupons or paid with a credit card–all factors that might influence future endeavors on your part to get them to spend more.

Sometimes random surprises hit you when you look at data patterns or group information. But, as mentioned earlier, the best analytics results emerge when you have an action-oriented approach and a path for where you want your business to head.

Starting Where You Are

You should be able to see by now that analytics is ideal for collecting data, examining it, and turning it into gold for your company. The automation of analytics means there’s no limit to the amount of data you can work with, once you get started.

The scalability of analytics makes it easy to start simple and grow from where you are. That alone may be one of the top benefits of analytics and a reason to start a system now for your business.

Join The Rockstar Entrepreneur Community Now: Start Rockin Now

Similar Posts:

Leave a Reply

Your email address will not be published. Required fields are marked *