How to Use Business Analytics to Smoke the Competition [Podcast Transcript]

Data is everywhere!

“There were 5 exabytes of information created between the dawn of civilization through 2003, but that much information is now created every two days.” That’s a quote by Eric Schmidt, who we all know from Google. OK, great. That’s a lot of data but how are you using the data you already have to grow your business?

Business Analytics is often confused with business reporting. Reporting tells you what happened. Analytics is the practice of creating insights. Insights are the interpretation of reports that drive change, or better yet, innovation in business processes.

Knowing that that your website conversion rate is low is good information. It at least gives your focus some direction. Knowing that the conversion rate is lowest on mobile devices is now good information with some context. You now have a specific area to dive into. Knowing that tracking parameters get removed from URLs when mobile device visitors come to your site from in-app browsers is [next slide]

Insight or an understanding of the root cause creating the undesirable effect of a low conversion rate. You now have an actionable problem to fix.

These are the kind of answers Querybridge can bring to your business [next slide]

But we can also help you ask the right questions.

For instance, when it comes to marketing do you know how much incremental revenue that 30% off promotion is generating? What product should you advertise to a customer who just purchased, say, a ride-on lawnmower from your e-commerce shop? Or a little black dress? Which channels create valuable customers? Not just high average order value transactions but VALUABLE customers? [next slide]

Can you look at your product portfolio as value segments? How much is each segment worth to your business? What channels drives that segment? Do you have products that sell well creating a high volume of revenue but create an equally high volume of complaints? Which products attract repeat purchases? [next slide]

When customer do become repeat purchasers do they have a different experience from first time customers? Do you have way to identify VIPs? What percentage of your customers only buy during promotions? What percentage of your total revenue comes from your Top 10% of customers? We have hundreds more questions just like those but the most important one [next slide] is how are you innovating and staying ahead of the competition?

I’m a huge Deming fan but I’ve come to believe this quote is now outdated. At the time, he believed the Producer was responsible for innovation. If we look back to Henry Ford his quote about asking the customer what they wanted and the answer being a faster horse aligns with this quote from Deming.

I believe with technological advancements; customer ARE in fact telling you how to innovate. Most businesses Just don’t know how to listen. [next slide]

By creating an Analytics Center of Excellence or Analytics COE you can gather insights that drive innovations targeted at the 3 primary ways of growing a business. If you can get more of the right shoppers and convert those shoppers to becoming customers and then show those customers additional products or services that are a perfect fit, you reached e-commerce excellence and will beat your goals year after year.

As a secondary impact, your marketing will become more efficient. Your first party data now becomes a competitive asset. No-one has your data but you. That’s an unfair and desirable advantage! Last but not least decisions are no longer best guesses based on experiences that may not apply or even be outdated. You’ve now moved on from looking at information on events that have already transpired, like your weekly and monthly reports, to looking forward at campaigns and features that will grow your business. Can I say it again? Innovation! [next slide]

Going from Information to Innovation is not a light switch change.

It’s not a process that most business can swallow in one gulp. It requires focused change management and a phased approach. These steps are accretive, building on top of each other to shift your business analysis paradigm.

Most business have already built their rear-view mirror with descriptive analytics. What happened last week? Honestly, who cares? It already happened. You don’t drive in traffic using the rear-view mirror. Yet, this is the phase many businesses are stuck in.

Those that have learned to ask WHY it happened so they can manage the cause of the effects are practicing diagnostic analytics. Just as quickly as business leaders are asking “why did we have a bad week?” They should be asking “why did we have a good week?” Understanding the cause allows for attempts at repeating the cause and having better weeks!

Now things get really interesting with predictive analytics. This gives you a look into the future to make better decisions. You can now ask “what if” questions like “what if I increased marketing spend in channel x by 30%?” “What would happen if removed product line A?”

With only descriptive analytics at your disposal, you’re at the mercy of hind sight. While the vision is clear, the result has already arrived. Predictive Analytics also allows for predictive marketing.

Remember when we asked the question of “What product should I advertise to my ride-on lawnmower customer?” Intuition would likely answer, a garden hose, grass fertilizer or maybe being more on-the-nose with lawnmower oil. How shocked would you be to learn,

for one client, the answer was patio furniture?

Of course, we can see the connection after the data highlights it. A residential customer with a large enough yard for a ride on will likely want to enjoy their yard. However, before the analysis, patio furniture was not on the Family Feud board.

If Descriptive analytics is a rear-view mirror. Prescriptive analytics is GPS with live traffic avoidance and fuel efficiency routing. Now you can ask the question “how do we hit $100 million dollars in sales?” The answer will likely look like “sell 20% more of product line X with a 10% increase in budget for marketing channel A and a 10% budget decrease for channel B.” THAT is a prescription for your revenue ailment.

As data processing and storage becomes cheaper and more accessible, competing with data insights will become status quo for all business sizes.

For more information about data-driven marketing or creating an Analytics Center of Excellence for your business, please drop us a line at hello@querybridge.com