There is no denying the fact that data is now part of doing business. Businesses are collecting as much data as they can with the aim of gaining an edge over their competitors. The use of big data has become a necessity for most businesses and is now the basis of growth and competition for businesses that leverage it. In this article, we are going to look at how businesses are using data analytics to get ahead of their competition.
The Correlation Between Analytics and Competitive Advantage
Competitive advantage encompasses the factors that make a business or its goods and services superior to those of their competitors. In other words, competitive advantage answers the question of why customers should choose your business or its goods and services over your competitor’s. Common ways of gaining an advantage include reducing the cost to pass the savings on to the customer, improving old products and services and developing new ones, as well as improving customer experience.
Data and business analytics can help businesses identify new areas to get an edge or to improve upon existing advantages. In this way, a business’s position in the market is either strengthened or sustained if the business is already a market leader.
Finding Ways to Cut Costs
Price is a huge factor when people are deciding whether to purchase your products and services. Businesses can use data analytics to find areas where they can cut costs and pass the savings onto their consumers to gain a competitive advantage. They can do this by leveraging the vast amounts of data they already have about their processes.
Analytics can show areas where there is a lot of inefficiency, flaws and bottlenecks, which is a lot harder to do using other methods. By doing so, businesses can focus on removing these inefficiencies, flaws and bottlenecks as a way of cutting costs.
Making the Most Out of Consumer Data
As businesses have shifted their focus towards their customers, they have been collecting a massive amount of consumer data and information. To remain competitive, businesses should use this data to come up with solutions to issues customers may be having, improve their products, and enhance buying experiences.
A better understanding of customers through market segmentation done through data analytics can offer insight into buying preferences and habits. Businesses can analyse their web presence, for example, to gain insight about new and returning customers as well as the average duration and bounce rates on their websites.
Additionally, businesses can use customer insights to direct marketing expenditures. They can use data to determine if the campaigns they are carrying out are helping bring in new customers or are just wasting money.
The ability to extract meaningful data and insights from large sets of data makes it easier to better understand customers, which is a skill that most businesses are after. This demand will continue to rise as more businesses realize the gains that they can make by making better use of customer data.
To gain the skills businesses need in this area, you need a degree with a focus on analytics – preferably a business analytics degree. The MSc business analytics programme from Aston University prepares you for a role in analytics through relevant real-world case studies, business applications and hands-on experience using today’s technologies.
Better Use of Resources
In a world that has become as competitive as it has, businesses have to be creative in how and where they deploy their resources. The areas in which they deploy these resources should be those that help the business gain a competitive advantage, such as spending more money on product development or hiring the right talent. Data analytics can help businesses identify areas where their resources are not being deployed and utilized as efficiently as possible and help them rectify the situation.
Big data can give an insight into a business’s operations that might otherwise be forgotten. These insights can then be passed on to the right individuals so they can find ways to make better use of these resources without having to cut any costs.
Improved Customer Service
Customer expectations have changed a lot in the past few years. Thanks to online businesses, customers are used to a personalized service and expect a higher level of service than they did a few years ago.
Fortunately, businesses now can rely on data to provide better customer service. One area this is happening is in product recommendation. Using predictive analytics, businesses can accurately use a customer’s history and purchase behaviour to predict what they are likely to buy. These recommendations can then be included in a personalised marketing campaign.
By ensuring that the products being marketed to a customer are the ones they are likely to purchase, businesses can help improve customer satisfaction with their marketing campaigns. An added advantage is that customers are much more likely to engage with a business if they know that the business is not generalising, but instead taking its time to cater to their individual preferences.
Analytics is also being used to predict what questions customers are likely to ask. This allows businesses and their customer service agents to have a list of questions customers are likely to answer at hand when a customer gets in touch. This helps reduce the amount of time an agent spends answering questions, thereby helping improve customer satisfaction.
Additionally, this data can be used to create knowledge bases where customers can find the information that they need without having to get in touch with a customer service agent.
Every business that wants to survive must have a competitive advantage in a certain area. That may be through having cheaper products and services, making the most use of the resources they have available, or being able to make the most of customer data and information. Business analytics helps businesses gain the insight they would otherwise not be able to if they used other tools. These insights allow businesses to make decisions or changes that help them gain an advantage or strengthen their position in the market.