No matter the size or complexity of your business, one thing remains true: you are collecting data. With the rise of the internet and cloud storage, companies today are storing more and more data than ever before. But just storing data isn't enough. As Peter Drucker famously said, "If you can't measure it, you can't improve it."
The purpose of business analytics is to take all of your data and put it to work for you. Collecting information is just the beginning. Breaking down that information and attaching meaning to it is where the real magic happens. By measuring trends and correlations, you will be able to get a better picture of what is really happening. With this insight, you can then begin the process of improving.
Being in the marketing industry for a number of years, I know all about collecting data. The hardest part has always been breaking down that information into meaning. Sadly many focus just on vanity metrics instead of digging into the "why." For example, most digital marketing reports will show a graphic of traffic to a website. While seeing the traffic amount is nice, it doesn't answer any question. The real question to ask is "why is our traffic trending in a certain direction?"
Business analytics is the practice of getting to the real answers behind your data. For instance, using the website traffic example above, we can pull in a number of different reports to get to the bottom of our traffic trend.
The first step would be breaking down the traffic by source: direct, organic, social, referral, email, etc. This will help us see how each medium is impacting our traffic.
These are tough questions, but getting to the bottom of them will help make sure that you are investing your time and resources more efficiently. The next step is to then overlay what marketing actions you've taken over the time period you are analyzing to see if there is any correlation.
Let's say email drove more visits than social over the last 30 days. If we layer over the email marketing data with the traffic numbers, we can begin to see which emails worked and which didn't. Assuming all the emails were working would be a bad move. If we look at the data, we might see that one email preformed really well while the others are just doing OK. We can then look at what worked with the great email and use what we've learned to grow this area even more.
By taking the time to dig into the data, we can really begin to build a strategy that will lead to faster growth. If we had just looked at traffic and saw growth, we would have assumed what we were doing worked. But by analyzing the data, we were able to pinpoint what was actually working. This means we can focus more on the areas that are producing and tweak our overall strategy to produce results.
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