Those who work in the analytics industry often take it for granted that analytics is a crucial part of building and growing a business. Data is becoming more difficult to ignore and the value of it seems more clear than ever before. Take the quote below, which emphasizes the importance of data for a business.
“Information is the oil of the 21st century, and analytics is the combustion engine.”
So why are businesses hesitant to invest in these transformative analytic solutions? It’s because leaders typically don’t have a clear understanding of the business value of analytics. They don’t actually understand what it is they’re getting. Because of this, they’ll often shift the budget towards a higher priority area where the value is clear to them. Small and medium sized businesses (SMBs) face increasing competition and an intensifying expectation to do more with with less. For this, leaders are right to question the value of measurement through analytics.
Here, I’d like to introduce four important business drivers where the ROI of analytics is easily demonstrated. If you’re a leader who is unsure of whether or not to pursue an AaaS solution, hopefully this provides the proof you need.
Grow Your Business with the Right Customers
A business ought to be able to answer the following questions: How many customers have we acquired? How much do these new customers purchase? What is our overall profitability? Without analytics and a robust data strategy, businesses are left with very basic measurements to guide their decision-making. This can be a scary place to be. Analytics provide leaders with the timely information they need to make educated decisions they feel confident in. Decisions that will move the needle for their business.
Understand Your Marketing Attribution
Department-store magnate, John Wanamaker, once said: “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.” An effective marketing strategy reduces adverting spend. Analytics provides the insight to allow for this.
Increase Revenue from Existing Customers
Acquiring a new customer can cost 5 times more than retaining an existing customer. This becomes very important when it comes to understanding consumer purchasing patterns, preferences, and expectations. Growing your customer base is great, however, keeping your existing customer base is invaluable.
Make Smarter Decisions Faster
One of the main problems plaguing businesses is that important data is buried in spreadsheets that answer the wrong questions too late to be useful. By the time a problem is identified, it’s likely been occurring for months. There are significant cost savings to be had when problems can be identified and addressed closer to real time.
These are just a few of the main business drivers that show the ROI of analytic efforts. There are often industry specific measurements that should be taken into account. If you’re wondering where to start, the simple answer is to just start. We’ll help you identify and develop a solution that best matches your needs and budget.
