The Importance of Data Analysis in a Business
As a business owner, data analysis allows you to know more about your business and your customers
We live in a time where there are endless amounts of information available with just a few clicks! Computers and the internet have made it very easy for us to collect and access data of all kinds. As a business owner, you could use this information to know more about your business and improve.
You can collect data for a variety of aspects of your business, including product research, sentiment analysis, market research, and much more. We're going to go over why it's essential to utilize data analysis in your company.
When you gather information about your clients, you start to understand who they are, where they live, their age, gender, and spending habits. You'll figure out which group is the most profitable for your business.
You'll then know who to market to when advertising your business. You can then focus on those people and give them the best deals because you already know they are spending money with you.
You could also use this data to target potential clients that fall into your customers demographic. You won't waste time reaching out to people who probably won't buy your products.
Improves Customer Service
You can use sentiment analysis to understand what customers think about your business online. Sentiment analysis is taking texts and analyzing if it's positive, negative, or neutral text. If you have more negative comments, you can see why.
Then, you could see where you need to improve in your company. This will enhance your customer service because you'll know which things to address. You can then use the sentiment analysis at a later date to see if where you've approved with what your customers are saying!
Predicts Customer Behavior
You can't just focus on the now if you want your business to succeed in the future. You could use data analysis to predict how your customers will behave in the future. Every business wants clients to continue spending money with them after their first purchase.
Data analysis can show you how many people click on your website more than once, which can predict that they'll probably be back in a few months. You can look at those customers to create loyalty with exclusive deals for them.
Then, with the customers who only visited your site once, you could come up with other plans on how to get them to commit to being a return customer. It's possible you might need to change some things on your website also.
For example, it could be taking too long to load. It was studied by Google that if your website takes 1 to 3 seconds to load, you'll lose 32% of your potential visitors. If it takes 5 seconds to load, you'll lose 90%!
Aids in Decision Making
When you have data to look at, making business decisions will be more comfortable because they are supported by facts, with the data collected you can see what works well, and what you need to improve or get rid of completely.
If one product is selling really well, you might want to invest more time and energy into developing items similar to it. On the other hand, if something is hard to sell, you can discontinue the product or reduce the price.
From the data, if you're seeing that customers want better service or need more of something, you could invest in training your employees to meet their expectations. However, if people are happy with their experience, you can save your money and spend it on improving other areas of your business.
Knowing how your company is doing based on facts, not just feelings will make decision making so much easier for you!
The Bottom Line
Overall, businesses should look into data analysis to get an accurate report on how their company is doing in many aspects. This information can bring light to things you might not even have known hurting your business.
You can use this data to understand the demographics of your customers, improve your customer service, predict your customers' behavior in the future, and help you make business decisions.
Alon is a Tel Aviv-based Cheif Marketing Officer who supports b2b tech startups in capturing customers’ (and VCs’) attention through marketing based on data-driven storytelling.