Big data has become something of a buzzword in the business space over recent years. However, it’s more than just a passing fad; big data is the future.
Entrepreneurs are no stranger to building something from scratch and working with what’s available to them, then refining the process later. It’s time to rethink that strategy and start using data from day one.
Here’s how entrepreneurs can use data analytics for success.
Better Systems and Project Management
Using data and statistical analysis helps create more efficient work systems and processes. In other words, an entrepreneur who uses data will be better at identifying and eliminating waste while highlighting opportunities for improvement.
Statistical and data analysis is nothing new in the world of business. It’s one of the founding principles of the highly-acclaimed Six Sigma methodology, with introductory coverage as early as the Lean Six Sigma White Belt program. Entrepreneurs can use this approach to improve systems and processes within the business, to subsequently improve outputs.
Improving processes within the business ultimately leads to better efficiency and profitability overall.
Understanding Customer Behavior
AI and machine learning have created an incredible opportunity to capture data about customer behaviors. These insights into consumer behavior present opportunities for impactful up-selling and cross-selling campaigns. With this information, you can create targeted individual campaigns that highlight product offerings that go well with browse or purchase history.
Using tools to hyper-segment customers and better understand their motivations provides clarity about the overall customer experience.
For example, high-level analytics might show how many customers are bouncing rather than transacting on your e-commerce site. Deeper analytics could show you a connection between bounce rates and loading time on your transaction page. Digging deeper could identify a link between bottlenecked traffic to your loading page, especially during peak times. Using this data, you determine that the best path forward is investing in better bandwidth before the holiday rush.
Outlining Hidden Barriers and Opportunities
When it comes to running a business, you don’t know what you don’t know. Data analytics can showcase hidden barriers and opportunities.
The example above regarding website bottlenecks is a prime example of a hidden barrier. For another example, consider the factors impacting sales at a restaurant. Unexpected metrics, like the weather, could be a potential barrier to hitting sales targets. You might discover that your customer base doesn’t want to leave the house on a rainy day. Creating a marketing piece for rainy days could help curb their behavior.
Diving deep into your analytics might also highlight a potential market that you have yet to explore. Perhaps your target demographic is women aged 18-34, but you discover a small yet engaged segment of men aged 25-40. This data insight shows an opportunity to customize offerings and cater marketing campaigns to that group.
Better Understanding of Competition
Conducting a SWOT analysis is an integral first step in entering a market, but what comes after? Data analytics can help an entrepreneur better understand the competition and the industry at large. Understanding the data about what competitors offer, what they do well, and where they’re falling short can help entrepreneurs create a strategy based on those parameters.
Accurate Forecasting and Future Planning
The more data you have about the past, the more accurate your strategies for the future. Data analytics helps entrepreneurs make data-driven decisions and preparations to identify future needs, trends, and financial requirements.
Why Data Analytics Creates Successful Entrepreneurs
In essence, data analytics provides the framework to create invaluable information that entrepreneurs can use to move their business forward. This data will help them push through lean times, strategically expand the business, make processes more efficient and profitable, and become more accurate in all areas.