3 Key Small Business Areas That Can Be Optimized Through Data Analytics
Data analytics is the practice of collecting and analyzing data to gain insights regarding business performance. Through data, analytics businesses gain valuable information regarding customer behavior, operational efficiency, supplier relationships, and more which can be utilized to make informed decisions to streamline business processes and improve customer satisfaction levels. In this article by Designworks, we’ll explore key business areas where data analytics should be used and the benefits that it provides.
Developing Sound Marketing Strategy
In 2023, customers are using more social media apps than ever and businesses need to develop a strong presence on each of them to achieve business goals and outperform competitors. Moreover, to ensure that marketing efforts are effective, there are a host of KPIs (key performance indicators) that need to be tracked consistently, such as:
- Conversion Rate: This measures the percentage of visitors who purchase interacting with an advertisement or other types of promotion. A low conversion rate points to issues with messaging, or targeting which should be promptly addressed to make higher sales.
- Customer Lifetime Value: Commonly referred to as CLV, this measures the total value a customer brings to the business through purchases, referrals, etc. throughout their relationship with you. If your CLV is lower than expected, consider upselling or cross-selling products to increase your spending with your business.
- Customer Acquisition Cost: As the name suggests CAC represents the expense incurred by the business to acquire 1 customer. Ideally, your CAC should be lower than your CLV and can be improved by targeting your paid and content marketing efforts toward the right set of audiences with engaging messaging and a clear CTA.
Working with experienced marketing professionals such as graphic designers and social media managers is a great way to improve these metrics as well. However, clear communication regarding your expectations and customer preferences is key. Sharing image files over email can sometimes degrade quality, leading to poor execution of marketing campaigns, solve for this with a JPG to PDF converter, which retains the source quality and protects sensitive data through encryption.
Improving Website Performance
In addition to being a platform to educate customers on your brand and offerings, websites need to serve as digital storefronts 24/7, 365 days as reported by Forbes. The reason for this is simple, online sales have increased in prominence and will continue to do so in the coming years. However, managing a successful website requires consistently tracking its performance and taking prompt action to fix any issues that arise. This is part of your data analysis strategy, particularly in using process discovery to uncover areas in need of improvement. You can learn more about this concept when you click here.
Here are the best website metrics every business should track:
- Bounce Rate: Visitors leaving the site after spending only a few seconds on a single page is counted as a “bounce.” A high bounce rate means that there is something fundamentally wrong with the website such as slow load speeds, bad messaging, confusing navigation, etc.
- Website Uptime: While the ideal website uptime is 100%, scheduled maintenance can reduce this to 98-99%, as reported by UpTrends. However, under no circumstance should your website be down for prolonged periods, as this can lead to losing out on a large number of sales opportunities and a negative impact on brand image.
Tools such as Google Analytics are great for tracking website metrics as they provide real-time data analytics results which can be used to promptly solve issues.
Managing Inventory Efficiently
Data analytics can help businesses efficiently manage their inventory, by providing insights into current inventory levels, and customer demand patterns, and laying the groundwork for order forecasts. Insights garnered from analysis of inventory can help prevent over and under-stocking, resulting in minimal wastage of time, resources, or labor. Additionally, the customers will benefit from products always being in stock, resulting in consistent repeat purchases and year-round sustainable sales.
Through data analytics and process discovery, small businesses can improve their performance in key areas such as inventory management, marketing, and website performance. But, in addition to making internal changes, working with professionals becomes necessary as well, especially to get the most out of marketing campaigns. When working with external experts, remember to communicate well and use PDF as the go-to medium to protect data from bad actors.
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