As a sector, we take it for granted that using analytics to create and expand a successful company is essential. We believe that having an annual analytics budget is clear, given the significant debate around big data, artificial intelligence, and the development of analytics technologies.
Yet when it comes time to secure funds for the analytics budget for the next year, we frequently encounter unanticipated pushback and opposition. This is due to our difficulty communicating and proving analytics’ economic benefits and return on investment (ROI). Additionally, the funding is allocated to higher priority areas where the business value is evident and measurable when top executives lack explicit knowledge of the business value of analytics.
The five most significant business drivers listed below make it simple to show the value of your data analytics work. If your executive team requests evidence of the business improvement, you may get all the evidence you want here.
Get More of the Right Kind of Customers
Without rich data and powerful analytics tools, businesses can only measure the most thorough top-line and bottom-line influence of any marketing effort. These include inquiries like:
- How many new clients have we added?
- How much do these clients buy?
- How profitable is our company overall?
The most basic measures are routinely used to make poor business decisions without sophisticated analytics. This causes us to pause and consider if the clients we are getting are the correct customers to begin with and instead focus on the lowest cost per customer acquisition.
Even with a greater cost per acquisition, the ROI of obtaining more of the appropriate clients means that:
- Higher rates of repeat purchases are seen.
- The rates of consumer attrition are lower.
- Customers who are chosen carefully will typically outperform those who are purchased for the least amount of money.
Media Mix Modeling and Marketing Attribution
The data will reveal the ideal marketing mix ratio by enabling you to test a combination of marketing options that produce the most results for the least amount of money, at least in digital marketing, when combined with solid analytics tools and professionals.
It is possible to quantify and attribute the commercial value of adequate marketing attribution and media mix modeling, which cuts significant advertising expenditure, to the data analytics employed and the analysts who carried out the analysis.
Increased Revenue from Current Clients
A new client might cost up to five times as much to acquire as an existing one. Your analytics will help you upsell, cross-sell, increase purchase frequency, and validate that generally accepted statistic with your data. When correctly examined, the data will offer a better knowledge of what your present consumers require and what other customers purchased.
A/B Testing Promotes Growth
When used correctly, analytics provide the power to isolate factors and test hypotheses from top-of-funnel activities down to the conversion point.
Marketing executives must implement rigorous analytics tracking program to monitor the effects of their marketing decisions and budget allocation in the modern, digitally native eCommerce environment.
Investing in analytics is the cornerstone for doing statistically meaningful A/B testing to improve website conversion and conducting top-of-funnel A/B tests on advertising vehicles. You are operating blindly without good analytics in place, and those using the data to enhance and strengthen consumer relationships continuously will surpass you.
Moving at the Business Pace
Analytics use data to speed up processes as well. Without manual analysis, we may start accelerating recurring purchases by applying machine learning and pattern recognition. Today, finishing a deal quickly might be the difference between losing it. There is a measurable potential cost for company latency (without analytics) and higher purchase frequency by removing any obstacles to completing the present transaction.
It is time to direct our data analytics consulting rigor toward why we measure things in the first place for their business worth. Contact us at SG Analytics, and we will guide you.
