Analytics is something every business needs to stay competitive in today’s data-filled world and every manager needs to at least understand the basics of analytics and when and where to apply them.
The following are some of the most important analytics techniques for businesses of every shape and size to know and understand in order to move their business forward.
1. Cash flow analytics
Knowing how money is moving in and out of your business (cash flow) and knowing how easy it will be to convert your assets to cash should you need money quickly (liquidity) are essential measures to help you gauge the health, stability and longevity of your business.
2. Product profitability analytics
Most businesses know how profitable the business is but very few take the time to dig deeper into the individual profitability of each product or service they offer. As a result, few businesses know which of their products are making or losing money.
3. Customer profitability analytics
Customer profitability analytics is the process of identifying which of your customers are actually making you money. There is often an assumption in business that any customer is a good customer but that is not always the case. Customer profitability usually falls within the Pareto principle or 80/20 rule.
4. Market size analytics
Market size analytics is the process of working out how large the market is for your products and services and whether there is any growth potential. Essentially the size of a market can be thought of in terms of ‘how many’, ‘how much’ and ‘how often’.
5. Non-customer analytics
Non-customer analytics is about understanding what people who are currently not your customers think about your product, services or brand. If you can find new markets or new pockets within larger markets that have yet to be approached by you or your competitors, then you have an opportunity to increase revenue cost effectively.
6. Pricing analytics
Pricing analytics is the process of analysing price sensitivity in market segments, and it is one of the critical territories of business analytics. Pricing analytics has emerged as an important tool to increase profitability, especially in highly competitive markets where everything that can be done has been done.
7. Customer lifetime value analytics
Customer lifetime value analytics is the process of analysing how valuable the customer is to the business over the entire lifetime of the relationships. Instead of looking at transaction profitability, this tool seeks to establish how long a customer is likely to stay a customer, how often they are likely to buy during that period, and how valuable they are across that timeframe.
8. Social media analytics
Social media analytics is the process of gathering and analysing data from social media. The rise of social media has created a rich vein of data from individuals who are customers or potential customers.
9. Customer engagement analytics
Customer engagement analytics is a highly evolving field at the moment where businesses are trying to map the entire customer interactive journey on and off-line. Essentially, it is the process of assessing how well (or otherwise) you engage your customers with your products, services or brand through these various interactions.
10. Project and program analytics
Project and program analytics is the process of assessing how effective your internal projects and programs have been so you can improve them in the future.
