Data-driven decisions unlock the true potential of an organization’s information by empowering people to make more calculated moves. What major business initiatives are you undertaking that aren’t backed by data? You might think that you’re acting on the data, but the truth is: you might not be. You’re acting on surface facts, without digging into the reason why. If you are unsure if your business is utilizing the appropriate data, it might be time to bring in expert data analytics consultants. But let’s first figure out what analytics you are already using and what you need to start thinking about when it comes to your data.What Analytics Do You Have?There are four types of analytics:
- Descriptive
- Diagnostic
- Predictive
- Prescriptive
Descriptive data emphasizes defining the problem itself. Maybe 71% of customers are abandoning their carts, which is having a major impact on your revenue. It also hinders you from making future decisions. How are you supposed to invest in marketing and advertising if you can’t get anyone to buy from you?
Diagnostic data helps identify why the problem happened. In many data cases, you might not be 100% sure. You might uncover several reasons why this abandonment problem is occurring. Maybe the purchase flow is confusing, or maybe your site has a bug that doesn’t accept credit cards and your customers aren’t willing to try five times to make it go through.
Predictive data analytics uncover data patterns that tell you about a problem before it becomes one. These patterns can predict the natural domino effect of what happens if no solution is implemented.
Prescriptive analytics is a crucial step to launch you into identifying the best action items that will come together into a cohesive, problem-solving strategy.
Contextualizing Data with Your Stakeholders
When using analytics to develop actionable insights, it’s important to note that data is the key to helping employees unlock a stronger connection to their customers.
Experience and real-time customer interactions are the most important supplementary tasks you can support your data insights with. To do this, ask your stakeholders some real questions.
What data do they need? What information do they wish they had before making major decisions? This type of information can help you prioritize how you need to dig into your data to find actionable insights.
This is where the process of contextualization and segmentation comes in. Maybe your stakeholders want to know the potential monetary stakes if a decision they make goes south. That’s where predictive data analytics come in.To uncover that answer, you’ll need to segment your data. For instance, if stakeholders are trying to gauge the risk of taking no action on the cart abandonment issue, you need to segment out customer data to answer that question. Customers that view the home page of the site and bounce are irrelevant. Customers that go all the way through the sales funnel and hit purchase are also irrelevant.
Your data needs to be segmented to highlight customers that are abandoning their carts after putting products in them and not coming back to make purchases.
Contextualization is also important. One of the biggest hurdles when it comes to data is paralysis by analysis. There’s just so much, how can you ever take the first step?
Start with what you already know. This could take the shape of:
- Comparing data to goals and seeing how they stack up
- Comparing your data analytics to how competition is performing
- Comparing data to customer behavior as diagnostic analytics
- Comparing data to revenue—for instance, a 15% increase in cart abandonment is equal to a revenue loss of X
In these cases, you often already have Y in this equation of data, revenue, and business goals. You already have revenue and business goals, access to information about how your competitors are performing, and how customers are behaving.
All you need to do now is solve for X, which is solving what data points are most effective in propelling your business forward.Craft a Data PlanYou’ve gathered your data and used analytics to break down data into actionable insights for your business. Congratulations! Now it’s time to turn those actionable insights into an actual plan that logically progresses domino-style.
It’s a crucial decision to make—and when you’re ready, Affirma is here to help!
