The importance of data analytics. Data analytics is a powerful tool for businesses that learn how to use it well. As reported by Keboola, data-driven organizations are 19 times more likely to make profits and retain customers at a rate 6 times higher than competitors. In this article by Let’s CEO, we focus on three core business areas where data analytics should be implemented and utilized on a daily basis.
Running a business in the free market exposes one to numerous risks such as inflation, creation of new technologies, the emergence of new competitors, etc. But, the risk of cyber threats stands out for businesses of all sizes. What is a cyber threat? It is the possibility of your business being targeted by malicious attacks by hackers which can cripple core systems, lead to data theft and negatively impact revenue.
The importance of data analytics can play a prominent role in safeguarding your business from cyber threats in the following ways:
- Machine learning algorithms can be used to analyze the performance data of your networks, and servers to create a baseline that represents a benchmark for optimal performance. A notable drop in these levels can point to an anomaly in the system representing a cyber threat. For instance, your website traffic may drop steeply, or network speeds could be slower than usual.
- Artificial Intelligence can be used as a real-time threat detection system as well. Analyzing user data on your network can highlight potentially harmful actions and issue a timely alert. This safeguards the business from insider threats or negligence.
In addition to these preventive measures, having a recovery plan is imperative to effectively manage situations when the business is under attack. Your recovery plan should include a timeline of when the data-recovery process should be initiated, the name of stakeholders who will oversee this activity, and a list of applications to recover first.
Customer retention is the process through which a business keeps its existing customers, converting them into loyal users who continue to buy products/services for the long term.
The best way to retain customers is by providing them with a personalized experience, which can be achieved by the following methods:
- Descriptive Analysis: This method involves the analysis of historical data to find customer trends and patterns, which can be used to curate personalized offers, and create targeted marketing campaigns.
- Diagnostic Analysis: This type of analysis will provide deep insights into the why of a customer’s decision-making process. Machine learning algorithms can find correlations between various factors such as an increase in sales within a particular period. With these insights in hand, your business can connect with customers at the right time and increase conversions.
As reported by UXcam, 1 out of 5 products in the market fail to meet customer expectations. This is an alarming statistic, especially for small businesses that cannot afford to waste resources on an unsuccessful product.
No product is perfect from the beginning, however, meaningful changes can only be made by thoroughly understanding customer demands and preferences. Here are two ways to incorporate the importance of data analytics in your product development process:
- Understand User Experience: A deep dive into user data will provide insights into why they purchase certain offerings and refrain from engaging with others. When evaluating new product ideas, steer clear of those with characteristics that customers deem unwanted and channel greater resources towards diversifying in successful categories.
- Conduct Thorough Tests: Data collected during product testing should be thoroughly scrutinized and used as a benchmark for making future development decisions. Whether it be product design, packaging, features, or any other component, analyzing and incorporating customer feedback will play a key role in making the offering a success.
When considering the importance of data analytics analyzing data is the key to unlocking the true potential of your business. By implementing these data analytics strategies you’ll develop a competitive advantage and safeguard the business from internal and external threats.
The Importance of Data Analytics
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Cherie Mclaughlin- The Importance of Data Analytics
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