Data analytics solutions are vital for decision making in a business, because they mean that a company can use actual numbers for their projections and models rather than relying on guesses and intuition. This allows managers to prepare for changes in their environment, providing a more accurate view of the impact of different business options.
The key to using data analytics solutions is to have a set of procedures designed to gather, process and model the information available to you. If your business doesn’t yet use data analytics solutions, here is a handy guide to how to use it.
Gathering the information
You can’t use information to make your decisions without gathering the hard numbers in the first place. Your sales records will be the most effective source of information, but you should also find a way to gather demographics information on your customers in order to properly analyse your customer base. Working out whether your customers are returning is also valuable.
You can gather this information for your data analytics solutions by offering a rewards program that requires customers to give you some information about themselves, and provides an incentive for making repeat purchases. Supermarket rewards cards are an excellent example of this, as they inform the retailer exactly what you buy and how often you buy it.
It is a lot harder to track one-off purchases, because you can’t really offer an incentive to these people. If you run an e-commerce business this is easier, because you can track the IP address and figure out some information based on that. If you ship your products you also get a physical address for the shipping order.
Processing
Once you have gathered what you need for your data analytics solutions, you need to put it into a useable format. This will obviously differ based on what kind of information you have collected, but it is an essential step in coming up with data analytics solutions.
If you have collected information about your customers, it is best to make them unidentifiable to your processors. If you are examining demography, for example, group your sets by suburb or city rather than direct address. In your grouping of everything you know about each person, remove their name and give them a unique number.
The kind of information you often want about your customers will include demographic traits (i.e. age, gender, area etc.), spending habits, return rates and frequency of different purchases. You can also cross-reference the different pieces of material you gather to get a more complete picture of your customer base.
You will need specialised software to make the most of all of the material you have gathered, and to properly organise it to tell you whatever you need to know. Once the material is organised properly you can use it to build models and find potential advantages and threats to your business.
Using the data analytics solutions
Once you have collected and organised your information you need to figure out what to do with it. This is the part where all of your hard work pays off, because you can use hard numbers to make better predictions and, ultimately, decisions.
You can use the gathered statistics to work out your business’ strengths and weaknesses, as well as look for future opportunities. As an example of how this can be useful, a thorough examination of your records might reveal slight downturns at around the same time every year. This means you can prepare for this trend to continue and be confident that it will be only temporary.
Data analytics solutions are fantastic for helping your business to make better predictions about the future and therefore more informed decisions.