Data plays a crucial role in the improving the performance of businesses. It harnesses its power to provide accurate and timely information either about the business itself or its operations and customer interactions. Its importance therefore cannot be understated. However, many remain mystified about how big data analytics actually work and why more businesses are using them.
What are big data analytics?
Simply put, data analytics uses raw data to find trends or patterns that translates to knowledge. Raw data can include:
- a list of parking locations,
- the number of transactions entered into each month, and
- the amount of revenue collected per annum.
Big data analytics takes this information in its unprocessed form, and processes it. It transforms this information into a more digestible and usable format. It can also draw its own conclusions from the data to provide you with new information. Primary by looking at any correlations between data points. For Example, a parking location operating in a city centre as opposed to a more remote location.
Why this is important
Data analytics is important because knowledge is power. There is a potentially vast amount of data that can help business owners make better, informed business decisions. In harnessing the power of data, it can lead to new opportunities that add value. As such, the benefits of data analytics can be broken down into the following:
- The development of new products,
- Targeted Marketing, and
- Faster decision making,
all of which serves to reduce wasted cost and increase efficiency.
This area benefits from the use of data because it informs teams about the types of products people are typically using,. Mainly, how they are using them, and their experience engaging with the product. According to market research company Zogby Analytics, roughly 6 in 10 respondents in a study said that online ads helped them discover products and offers they otherwise would not have known about.
Whereas traditional methods may have require participation in surveys or manual review. This takes place within the tech space at a much quicker pace and with a larger source of information. Therefore, meaning businesses are better informed at an earlier stage about the success of a product or service.
Customer interactions have dominated the field. As you may have seen on Social Media platforms with targeted advertising, it serves as a strong example of how data-led decisions can increase business exposure and therefore revenues.
According to statistics gathered by Google’s Economic Impact branch, for every $1 spent on Google Ads, businesses earn $2 in revenue. This demonstrates the power of paid search ads and tagging buzzwords specific either to your customer needs, or products and services.
Faster Decision Making
According to a survey of more than 1,000 senior executives conducted by PwC, organisation that are significantly data-driven are three times more likely to report significant improvements in decision making than those who do not rely on data.
In fact, in 2017 McKinsey estimated that 35% of Amazon’s consumer purchases could be linked back to how the company recommended products to consumers. This is all driven by data analytics and machine learning techniques.
The evidence is clear. Data driven companies stand to benefit much more than their traditional counterparts. As the infrastructure supporting the use of data analytics develops further. Undoubtedly, solutions will increasingly be as a result of data-led decision making.