Today’s businesses are overflooded with heaps of data. These structured, semi-structured, or even unstructured data of customers, social media interactions, sales, operational data, and what not. Data is the king but still most of the companies find it challenging to smartly transform this raw data into actionable insights that can actually magnify profitability.
If you are facing this exact problem, let me introduce you to Data Analytics and Business Intelligence (BI). It’s not just a tool for accurate reporting but serves as a strategy-driven engine for driving more return on investment (ROI).
This blog is all about using Data and BI to make better decisions and minimize costs, all while multiplying revenue. Here is how expert business intelligence consultants do it. But before that, let’s understand what ROI actually is in terms of DATA.
What is ROI for Data?
Return on Investment, in simple terms, means measuring the gain or loss of any investment made in that particular area. When we explicitly talk about Data Analytics and BI, here’s what the investment includes:
- Infrastructure (Software, Hardware)
- HR (engineers, data analysts, consultants)
- Time and Training
- Licensing & Implementation Expenses
On the other hand, below are some of the many forms of ROI that businesses may receive:
- Heightened Operational Efficiency
- Better Customer Targeting
- More Conversion Rates
- Cost Optimization
- Growth in Revenue
Driving Business Impact with Data and BI
As per McKinsey, data-driven businesses are 23x more likely to gain customers, 6x more likely to retain customers, and 19x more likely to earn profits.
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Accurate Predictions
Data analytics significantly helps in future event forecasting. Hence, organizations can easily forecast demand by analyzing a variety of data like historical sales, industry trends, customer preferences, customer behaviors, etc.
For instance, cloth retailers can easily predict how many dresses will they sell in the fall season, analyzing the data of the previous year’s fall season.
Better Customer Understanding
When dug more, that data reflects what the customers are actually interested in. What are their likes, dislikes, preferences, choices, and much more. Therefore, companies can easily analyze which products will the customer purchase together when they visit frequently.
With the help of this data, one can customize their goods, services, and even marketing efforts. For instance, OTT platforms do analyze viewers’ interests and suggest a personalized selection of movies and series based on viewers’ interests.
Personalized Marketing
By accessing a lot of customer data and interests, companies can create personalized marketing strategies to target a particular set of customers. Enterprises can create custom email campaigns based on customer behaviors, purchase history, trends, etc.
This results in more engagement and conversion rate while staying light in the pockets. Hence, businesses can gain more while minimizing acquisition costs. Businesses can also save on allocating the right resources at the right time to the right places.
Accurate Financial Insights
Advanced analytics empowers the finance teams to get real-time analytics of KPIS, spending behaviors, future financial trends, etc. This helps businesses to act quickly upon inefficiencies. They can also save on unnecessary expenses. This leads to proactive-decision making due to the identification of high-performing areas.
At the end of the day, it fuels profitability and results in sustainable growth.
Real-World Examples – Data First Decision Making
Below are two of the most influential real-world case studies that help you understand how businesses gain 5x to 10x profitability with Data and BI.
Netflix
Netflix strategically uses data to retain its customers. This enabled them to rule the streaming service market with over 301.6 million active subscribers. Due to the growing global competition, they worked on rendering extra-ordinary user experiences and encouraging users to stay on the platform. They continuously examined various factors like:
- Date
- Location
- Watching Hours
- Users’ Interest of Movies or Shows
- When the user pauses or restarts content
Such marketing analytics strategies can help create accurate suggestion algorithms. This helps to enhance the viewer’s experience. Did you know, 80% of customers followed the recommendations the company found after analyzing the results of the algorithm’s implementation.
Amazon
Amazon is another great example of a data-informed decision-making use case. This eCommerce giant also blends behavioral analytics methods with clients’ previous transaction data. Using this information, it offers precise product recommendations to users.
Using accurate analytical data, Amazon aids users by suggesting products during the buying process. It offers end-to-end suggestions from product browsing to checkout to render personalized customer experiences.
For instance, Amazon might suggest pens and pencils to the customers who already purchased a diary during checkout or via email, a few days later.
In A Nutshell
Businesses that are smart to recognize their data and transform it into useful insights not only ace the competitors, but also the market. They can easily anticipate market changes. And can quickly act upon customer needs. Hence, they can uncover new opportunities before anyone else does.
From optimizing operations to minimizing costs, this is the ultimate way to discover untapped revenue streams. As today’s digital economy becomes more and more data first, the data and analytics first organizations are meant to have a win-win situation.
Want to Turn Your Data Into ROI?
At DynaTech, we have Data and BI specialists who can help you smartly use your data. Our business intelligence and analytics services are powered by Microsoft Technologies. We transform your data into strategic assets. Connect with Experts today.
