While 2020 will soon be coming to an end, the future remains uncertain, and that is the most frightening aspect about the COVID-19 pandemic. The fear of the unknown is what can immobilize many people, especially during a time when the goal of most businesses is just to survive.
The fact that one wrong decision can spell the end for a business places enormous pressure on the shoulders of any business owner. What not many people realize is that data analysis is the answer to this, not only with respect to our current predicament, but also for a post-pandemic scenario.
Data analysis helps businesses assess their current standing and this allows them to more or less make growth potential estimates that help business owners set realistic goals. Knowing what you have, what you need, and what you want to achieve will help business plan accordingly. Knowing what your business’ strengths and weaknesses are will also help frame a course of action that minimizes risks.
Running a business takes more than just making the right decisions. It’s also about being able to convince your team to follow in that decision. When a decision is backed-up by data, and presented in a manner that is understandable, not only is the decision likely to be the right one, but it also gives team members an idea on what to expect.
Since businesses are currently heavily reliant on the internet to attract customers, the need to be able to determine your target market is paramount, especially when you’re working with limited resources. By using data to target campaign ads toward people who have already shown an interest in a certain product, a business is able to maximize the marketing costs. Not only this, but targeted ads have a much higher chance of converting a lead into a sale, which is essential for a business’ survival.
User Experience Personalization
Another big reason to invest in data analytics is to help personalize the experience of your users. This goes beyond simply knowing and addressing your prospecting customer by name. It also involves being able to guess a user’s purchasing habits. A lot of insight can be derived from a user’s previous behavior and this insight can be used to help estimate the factors that influence a user’s likelihood to purchase a product.
In fact, about 40% of US customers claim that they’ve purchased something more expensive than what they planned because of a personalized service. A perfect example of a personalized user experience is when websites suggest products to a user based on that user’s purchase history.
Discovery of New Opportunities
The insight that data analysis provides is not only introspective in terms of helping business owners better understand the condition of their business, but it also helps them make better sense of the industry they operate in. Most business owners already know that riding trends is a great way to garner more attention. However, the problem is that if businesses relied only on the information of others, that also means that their competitors are also aware of upcoming market trends.
This is where the prognostic capabilities of data analysis comes into play. By being able to make your own market predictions, you not only have knowledge on the direction of market trends, but you’re also bound to be one of the very few who are able to benefit from such closely-guarded information.
A good example of this is how food delivery services were able to capitalize on the lockdowns to push their services to prospective customers. They were able to identify a problem (that people needed essentials, but were unable to get them because of stay-at-home orders) and they were also able to provide a solution to that problem (that these companies offered grocery delivery and errand services).
Monitoring the Competition
In a competitive industry, businesses need to be able to gain an advantage over their competitors whenever they can. By monitoring your competition, you’re able to gain insight on the industry. You can find what strategies are good to imitate, and what strategies you need to avoid without having to test them yourself. The bonus here is when you’re able to improve on a competitor’s current strategy, you can get much more out of it than your competitor did.
Monitoring your competition also allows you to respond appropriately to their movements. When you see that a particular competitor’s product is lacking in one key area, you can use this information to make improvements to your own product to attract the prospective buyers who didn’t buy your competitor’s product because of that particular inefficiency.
When a business does well, growth is inevitable. While growth is always a good thing for a business, an expansion may not always be the right thing to do. There are many examples of businesses that expanded too quickly, to the point that they were unable to support their own growth.
Telltale games is a prime example of this. The game publisher took the industry by surprise with its role-playing games, and the company grew rapidly, taking on more ambitious projects year after year. It even came to a point where the games publisher began making games for major franchises such as The Walking Dead, Game of Thrones, and even Marvel and DC. However, despite this rapid growth the developer expanded too quickly, leading to massive amounts of employee crunch time.
It’s important to run the numbers before deciding on a business expansion, as they are a lot of work. There are a lot of additional expenses to factor into a business expansion, whether it’s in hiring new recruits and training them, or securing a new office branch, which translates into additional rent, supplies, equipment, and utility costs.
Running the numbers will help you determine whether you can support an expansion. It will also help you set metrics to determine whether your business is ready to expand so that you don’t waste time waiting to expand.
If you decided to expand too early or your business released a product that isn’t doing too well in sales, it doesn’t mean that your business is automatically going to fail. Data analysis helps business owners make good decisions. That is especially important in damage control, when things are on the line.
When your business encounters a major problem, you need to ascertain your situation before making a move. It’s also important to be able to weigh options accurately.
A good example of this is when car manufacturers are able to discover a pattern in a particular model’s flaws and they issue recalls in response to this discovery.
User reports and the problems indicated in those reports are what allow car manufacturers and dealers to detect vulnerabilities in their models.
One of the things that articles like this overlook is how data analysis can help businesses prevent fraud. Whether it’s in elections or logistics, big data analysis reveals anomalies that would otherwise be undetected. Remember that promises may sound nice, but numbers never lie. Historical data can be used to foresee risky behaviors because of the patterns found in these types of data. It may also be used to confirm the truthfulness of claims.
The Integration of Upcoming Technology
Finally, one of the biggest reasons why you absolutely need to invest in data analysis is because most upcoming technologies are going to rely on it. Artificial intelligence, for example, is going to be capable of learning patterns and trends, but it’s going to take time before it can harness its computing power.
You’re going to be wasting a lot of time if you only collect and process data when the technology becomes available. If anything, data is going to be the foundation of future businesses. Many of today’s big companies earn through data, whether it’s in how Uber is a ride-hailing service despite not owning its own fleet of cars, or how AirBnB provides lodging despite not owning any real properties, or how food delivery companies like FoodPanda, GrabFood and others do not own a single restaurant.
The internet of things is also another technology that’s bound to change data analysis. When more devices are connected to a network, this allows brands to gather more data on their users. The data gathered from IoT-capable devices is likely to provide a more complete picture of a user’s behavior, product usage, and many other things. These types of information can then be used to tweak the ways targeted ads function and may even drastically improve the personalization of a user’s experience.
In a world full of uncertainty, being able to gather and interpret data helps businesses predict trends. These predictions allow businesses to make the right calls and even when there are unknowns, companies like AI Data Innovations are able to help businesses make sense of the landscape they find themselves in. Remember that information is not only power, it is also profit. This applies beyond situations like this pandemic. To wait until the pandemic ends before you begin gathering and interpreting data would leave your business at a disadvantage.