Embracing and applying analytics properly will help you to find insights and patterns in your business that you would not normally find. Your sales may be reaching its potential. Maybe you have a feeling about something that is going on with your sales or how you manage inventory, but without using a proper analytics methodology, you could go in the wrong direction. After you collect the right data and analyze it, you will find the problem much more easily; then you can profit from it.
I encourage you to embrace and integrate analytics into your business, no matter what your business is. As I said in my second post to this blog about Knowing Your Numbers, “Analytics is the science of finding applicable patterns and relationships in data and experimentation.” Analytics is about linking data together in an unconventional way that leads to a discovery about your business, which provides for better decisions and more statistically significant predictions.
Over the last several years, my own belief and reliance on analytics has grown significantly. When I worked in the Pentagon and with NATO, we relied on data first before we made a recommendation on what was included in the annual budget or how we executed a financial decision. Data plays a role to eliminate guessing. You will probably be surprised when you collect and analyze data instead of pulling the trigger on a decision prematurely.
“Knowledge has to be improved, challenged, and increased constantly, or it vanishes.” -Peter Drucker.
Here are a few ways that analytics can help:
- Analytics will change your decision making. Once you know the proper metrics for your business and collect relevant data regarding those metrics, your entire approach to decision making within your business will change. It will be more scientific, more deliberate, and more measurable. For your brick and mortar business, analyzing foot traffic per hour, how that traffic moves in the store, and conversion rates will help you to plan labor better and how to design your store layout.
- Understand behaviors and activities. Customers act in a predictable manner. The data you collect can usually provide patterns to behaviors your customers are doing in relation to your business. Website click behavior on your products can be analyze to recommend related products for your customers. Once you recognize these patterns, you can market your products accordingly. Additionally, once you recognize who your customer is and their associated demographics and how much they spend, you can target and develop your marketing to them. You can arrange your store, both brick and mortar and on-line, to match their habits to the offers you provide.
- Find a competitive advantage. In the market today, insights into your own data may provide the key to a competitive advantage, controlling costs better, and the overall improvement to your top and bottom lines. Your niche can be marketed better if you know the associated numbers, particularly if you know where you are spending your money, if you know your conversion rate and your foot traffic trends throughout the day, on each day and on the weekend.
- Supports your business strategy. Insights into your data should support your strategy. Your projections of sales and traffic should be more accurate based on your new analysis. Because you will be data focused, your business strategy will be much more in sync with your vision and the goals you want to achieve.
Once you are collecting and analyzing relevant data for your business, you can combine that with industry assumptions to improve your forecasts, projections, and your annual plan. Continue to update your long term strategy and how you target your customers. On-line resources about your industry are available including government resources about the economic conditions about the United States and rest of the world. No longer should you be guessing about the next decision or how you develop your strategy. The goal is to maximize your profits and to keep more of your money.
What is preventing you from integrating analytics into your business? What have you done so far to improve your decision making through analyzing your data in a different way?
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Copyright 2016-Stephen McLain