We’re all aware that the use of data analytics today is vital for businesses to remain competitive today. However, to what extent? Today we will break down 4 ways how data analytics tools help to build business strategies that will directly impact the bottom line.
1. Build Brand Equity & Increase Customer Loyalty/Retention
Imagine yourself walking into a supermarket, what are your options if you’d like to purchase a shampoo? Probably an entire isle of it. In such an increasingly competitive market, half the battle is won if you’re able to retain customers and capture their loyalty long term. Therefore, companies are trying making use of data analytics tools to take advantage of key opportunities to improve customer experience, influence buying behavior and increase customer retention.
2. Determine Optimal Advertising Spend
Advertising when done well can sell your business like hotcakes. Otherwise, it can burn through your corporate funds very quickly with unsatisfactory results, significantly driving up customer acquisition cost. However, through the use data analytics, you can visualise, analyse, calculate and make sound advertising spends based on your sales metrics. For instance, you can track specific pages on sites that your customer browsed, the time spent on each page and at which page did they fell out. These data will help you determine what and which areas needs greater emphasis.
3. Increase Demand & Basket Size of Purchases
Have you ever wondered how companies like Taobao and Zalora recommend goods that you are looking for? No, this is not a coincidence, neither did they bug your phone, laptop or room. Instead, these companies have developed strong data analytics strategies using machine learning that aim to increase the average size of a basket of purchases. This magical mind-reading tool used by many companies is also known as the Market Basket Analysis, where it is a data-mining tool that seeks to find relationships in customers’ purchasing behavior and recommend complementary goods for purchase.
4. Determine Inventory
As space is always a constraint, businesses need to identify which products to stock in shelves and how much of them to stock to achieve optimal profits and minimising space wastage. This is where forecasting and predictive analytics comes into play as they help to more accurately determine the optimal amount of inventory to stock. Thus, this helps companies better manage their supply chain to remain competitive.