How Data Affects Your Revenue
Arun Pillai, January 22, 2020
The data being referred to in the title above is also called Big Data. Users are generating an insurmountable amount of data in every field, every single day. This information is being mined and used to derive valuable insights by diverse business professionals to boost their company’s growth and stay ahead of the competition.
What Is Big Data?
Big data is a massive amount of information that is exponentially growing with every passing second. Such a stupendous amount of data is complex and difficult to analyze by the traditional data management tools.
Therefore, the field of big data analytics and data scientists that work with it has become increasingly important. Big data analytics examines large amounts of information to reveal hidden patterns and correlations, providing businesses with in-depth customer insights and helping them generate higher revenues.
The New York Stock Exchange (NYSE) generates at least 1 terabyte of fresh trade data every day. The social media giant Facebook generates 500 plus terabytes of data per day in the form of pictures and video uploads as well as message exchanges and posts reactions. Can you fathom the magnitude!
Big Data is mostly raw and unstructured and can be structured and mined by professionals. Structured data that has been cleansed and broken into useful chunks can aid businesses by helping them better identify customers and target them through personalized content.
How Can Data Impact Sales?
With the advent of several data management technologies, the fields of sales and marketing have benefitted manifold. These technologies empower marketers to better define and manage their product and service prices as well as sales networks. Here is a comprehensive list of avenues through which data analytics can boost your company’s revenue –
Improve Pricing Strategies
A study conducted by Mckinsey concludes that more than 25% of revenue generated by businesses comes from innovative pricing decisions. Data can equip businesses with information about the kind of price ranges that potential customers engage with the best.
Redesigning pricing strategies using data science has the potential to greatly improve a brand’s revenue. Pricing products optimally is an analytical challenge, especially for conglomerates that sell thousands of products per day. These companies can automate their price analysis through data tools. For instance, Uber uses data analytics to dynamically shape its pricing strategies and implement them in real-time.
Deeper Customer Insights
Data analytics allows businesses to develop a deeper understanding of who their customers are and what they want. Marketing campaigns can then be geared with curated content that addresses customers’ needs more accurately. This will ensure a higher rate of engagement from potential customers, thereby having a positive impact on the revenue of your company.
Targeted marketing has been made possible through sub-branches of data analytics, namely descriptive analytics, predictive analytics, and prescriptive analytics.
Descriptive analytics aggregates and correlates old data available with businesses to help them understand their evolution cycle better. Predictive analytics takes this old data, adds it to the new incoming data and makes predictions on market trends and buyer behaviors. Prescriptive analytics focuses on discovering actionable insights in a business scenario based on the available data. All three types of analytics are applications that birthed out Artificial Intelligence and Machine Learning.
Inspire Product Improvement
Innovative product development and/or redevelopment has a drastic impact on a company’s sales figures. Ours is a consumerist society with tons of competition. Every brand is trying its best to woo and poach customers through product modernization.
Big data analytics provides information that helps designers and engineers develop more customer-centric products. Data technologies also provide the knowledge necessary for analyzing product failures and pointing out the most significant improvements. It also gives data on successful products developed by competitors, that captured the market and poached loyal customers.
Deciphering Customers Decision Journey
Customers today operate on multiple channels, both online and offline, to purchase their favorite products and services. Sometimes they shop until they drop, while other times they simply abandon a loaded cart online. This is why companies need to have an improved idea about their customer’s decision journey.
To accomplish this, sales and marketing departments must track customers on their websites. This should be done to check engagement with the buying cycle and to determine the point at which the customer lost interest. Buyers are creating tons of data by interacting with a business’ web portal daily. This data needs to be structured and analyzed by data scientists.
The conclusions derived from analyzing the browsing behavior of buyers can help businesses optimize their website and other web portals. This can lead to a higher rate of conversion, thus increasing revenues. Data can be used to adapt sales tactics to more accurately match consumers’ needs.
Sales Process Automation
Data technologies can automate the sales process, making it more efficient. Algorithmic marketing uses self-learning or Artificial Intelligence and Advanced Data Analytics to create more engaging and relevant customer interactions. For example, most people have experienced the phenomenon of dynamic pricing.
Surging prices to increase revenue when customer engagement is high on a particular website and lowering them with diminishing customer engagement to boost sales is done using marketing algorithms and data analytics. Data can also provide better product suggestions by analyzing customers’ buying behavior and price comparisons.
Smart Email Marketing
Email marketing is a popular tool used to convert leads into paying customers. Many businesses send newsletters with the latest business offerings. These newsletters can only be effective if they are sent to the right person at the right time with personalized content.
Offering a 20-year-old potential male customer great deals on real estate or jewelry over a newsletter is a waste of time and money. Data analytic tools carefully analyze the behavior of customers across your company’s platforms and categorize them according to their product preferences. This allows marketers to engage customers with their brand by sending them highly-customized offers, thus having a positive impact on sales.
Data science is a powerful tool and if harnessed properly, it is bound to have a positive impact on company revenues. Our world’s data is growing at more than 40% annually. While it may seem like a huge pile-up to many, the top market players view it as a goldmine out of which they can draw detailed customer profiles and employ effective marketing strategies to increase sales.