Five reasons you need data and analytics for business
Republished Sept. 8, 2020
When you’re building a business, you believe your product or service is needed in the community. You may even be certain that what you provide will change the world.
That’s possible. But how will you know?
Analytics on your website or mobile products will yield a wealth of data that can help you make the right decisions to keep your business moving forward. In fact, it is one of the most important components in ensuring your digital business is surviving and thriving.
1. Data helps you know what performs well
Using a numerical approach, such as Google Analytics (which is free and can be implemented on almost any website platform), you can see what pages are performing well. You can then use that information to generate more leads. Maybe the next step is to implement a call to action, so that when people read it, they move further down the funnel toward buying your product or service.
2. Data helps you know what doesn’t perform well
At the other end of the scale, perhaps you have content that is absolutely tanking. The bounce rate (the percentage of visits that result in a person leaving that page immediately because it does not serve their needs) is very high, and you don’t really see any traffic from Google. If the data shows this, you know that either this piece of content was created for the wrong audience, or it was not promoted properly. Either way, you know that it’s time to change your approach.
3. Data helps you understand your audience
I funnel audiences into three main categories: your current audience, your desired audience and your paying audience.
Your current audience is composed of loyal users. They know what you do, what you provide and will continue to come back regardless. However, they are often tapped out. They can’t give you any more money.
Your desired audience is composed of the people you envisage when you think of your product or service. They are the demographic that will build up your business. You need them because they will be the ones to push you to being profitable in the long term. But your desired audience might not always be paying customers, or high-paying customers.
Your paying audience is arguably equally as important as your desired audience, because they are the ones who will definitely give you money. The trick is to make sure you do not have too many one-time paying customers who buy once and then move on.
By using data and analytics, you can figure out the right strategy to cater to each of these particular audiences. What demographic is currently enjoying your content? Are they on mobile or desktop? Will they eventually pay or are they only interested in what you can provide?
This is how we move into developing our audience -- something I will talk about more in future posts.
The important thing is that data helps you gather insight into what your audience is now and how to grow it.
4. Data makes sense of what qualitative measures cannot
We love testimonials. Referrals succeed because people will go where others go. That’s how a lot of business happens -- someone puts in a good word and refers someone to you, and then you continue to garner attention. It’s a good thing. But what happens when the referrals stop?
Data makes sense of what cannot be explained through “I really like this person’s work.” It helps you take your content to the next level, and provide an extra-stellar experience for your customer. For example, you can tell them that on top of being an incredibly talented person, you also increase revenue on websites by 30 per cent. Or that you try to increase conversion rates two-fold. Those numbers make your already great work stand out more.
5. Data helps you make the tough decisions
The ultimate goal of your business is to thrive and, well, make money. Right? To do that, you have to be profitable and cut your losses when they happen.
The better the numbers you have, the more likely you are going to succeed.