This is probably an analogy that you’ve heard before, but you know what?
It’s a pretty good analogy: Analytics is a roadmap.
If you’re a little too young to know what a roadmap is, it’s kinda like GPS except it’s printed on paper, and you have to use signs and landmarks to figure out exactly where you are at any given time. A roadmap isn’t very useful if you don’t know how to read it. It won’t get you anywhere if you don’t have a car. And you have to know where you’re going in the first place. But taking a road trip without a map is just an easy way to get lost. You need more than just the roadmap for a successful journey, but you do need the roadmap.
Likewise with analytics. Analytics alone isn’t much use. You need a navigator, you need a plan. Otherwise, the data that you collect is just a bunch of numbers. If you find out that your product is especially popular with baby boomers, what do you do? Do you double down and aim more of your marketing at that demographic, or have you pretty much tapped out the baby boomers who are interested, meaning that you would be better off marketing to Gen X and millennials? If you find that your competitors are selling similar products like hotcakes over in North Dakota, do you go ahead and attend a few conventions in that area, or do your competitors have that market pretty much in the bag?
In other words, analytics is a great tool, but only when they’re in the hands of someone who knows how to put the numbers to work, how to navigate the data and formulate marketing plans, product launches and business strategies around the numbers. Here’s how analytics can help you to grow your business:
Identifying Dead Ends
One of the most important things analytics can do for you helps you to stop throwing good money after bad. One of the most important ways analytics can help you is in identifying dead ends. That is, if you’ve seen absolutely no significant change in sales since you started a Facebook ad campaign, then you might need to look at what you’re doing wrong in that campaign. Maybe you’re not targeting the right demographic, or maybe your ads just aren’t that appealing and they need a redesign. Or maybe your target demo is also the demo most likely to use Adblock on Facebook. It might be that you need to cancel the entire campaign altogether. Whatever the case may be, analytics will help you to see whether or not something is working.
And of course, the most important thing, and this is something we’ll probably bring up a couple more times as we go, is that you do something about it. When something’s not working, drop it. When something can be improved, improve it. In the 2010’s you have to be specific, you have to target your marketing and your products if you want to get the best results out of your efforts.
A recent study showed that most major businesses in the modern era do employ analytics to some degree. But only around half or fewer, actually put the analytics to work in guiding their business decisions. This means that they’re hiring analytics companies and crunching the numbers, they’re attending long meetings on marketing and sales data, they’re listening to their tech guys go on about untapped demographics and targeted ad campaigns, and then they’re not doing anything about it. This makes zero sense. Why spend all that time and money drawing up the roadmap only to throw it out the window and hope you can find your way there on instinct?
Sometimes instinct is great. Even with analytics, there will be decisions that have to be made with your gut. But why are you spending any time on analytics at all if you’re not going to listen when your numbers guys tell you that millennials have been asking if the new t-shirt in the shop comes in red?
Analyzing The Market with Analytics
If you’re starting a new business you’ll probably want to do some analytics research on the market before you even look into a business loan. The better you understand the market going in, the more success you’ll likely have once you open your doors to the public.
Other times you might want to figure out what it is you’re doing wrong. Maybe trying to get millennials to come to a jazz bar wasn’t the best idea. Or maybe it was. You won’t know until you’ve run the numbers. Analytics can show you a lot about the market itself, about your competitors, and who it is you’re selling to before you’ve even made an attempt to close your first sale. You’ll learn the most by actually running your business and looking at your own customers, but there’s a lot to learn before you get there, too.
Identifying Customer Behavior with Analytics
Wal-Mart uses analytics based on the physical layout of their store. They can see how people are navigating the aisles. This is why you usually see a lot of impulse buys when you walk down the food aisles to get through the store quickly. And where are they? If you take the right-hand side of a path on the way out, they’ll be to your right, because on your way out is when you’re gonna grab a bag of chips or a six-pack of root beer. Those big pathways are broader than the other routes in the store because this is how people shortcut their way in and out of the store to their desired section. Not so broad that you can sprint right through without bumping into anyone, but broad enough that people will consciously or unconsciously decide to take that route to get where they want to go quickly.
By the way, the quickest way through Wal-Mart is actually to cut through the clothing section right by the food. But most people won’t do that. That’s fine though because analytics is about the big trends more than the outliers. If you want to worry about outliers, the easiest way to do that is one on one. If analytics serve as a roadmap, then you need vacation photo albums to figure out outliers. Luckily you don’t really need to figure out outliers, you need to figure out typical customer behavior, and analytics can be a big help in this department.
Whether you’re looking at physical store data or website data, it’s the same thing. When you move the beef jerky up closer to the cash register, do you sell more of it? Do you sell more magazines with a big display by the books in one of the rear aisles, or do you sell more magazines when you stock them in the checkout lane?
The same goes for website behavior. With analytics, you can see where people are spending most of their time on your site. Maybe you find that people don’t just click through the site to make their purchase, they actually hang out on it. They read the blog posts, they check for new products you have in the store. If they spend a lot of time browsing the site, you can reward that meandering behavior. Provide more content like videos and stuff, or update the blog daily instead of weekly. If people are having fun just hanging out on the site, make it more fun to hang out on the site.
On the other hand, if they’re just trying to get through it as quickly as possible, you can streamline the buying process for them with a buy it now buttons for all of your newest offerings or whatever’s on sale, right on the front page.
Or you might choose to go the other direction. It’s great if people like browsing your site but if they’re not buying anything, who cares, right? Maybe you want to speed them along, get them buying before they have time to hang around and lose interest. Or maybe the site is too efficient, and people are checking out before they’ve really taken a look at what you have for sale.
Again, it all depends on what your goals are and how you want to put the data to use. Every business is different, so comparable numbers for two different businesses might not mean the same thing. If the average visit at your hotel is sixteen hours, that’s fine. If the same applies to your convenience store, then you’ve got way too many customers that apparently live there.
Identifying When And How To Put The Number To Work
Finally, analytics can show you how to use the data. We said that there’s no point analyzing your customers, your competitors and the marketplace if you’re not actually going to do something with the numbers that you’ve collected. But here’s the thing: Sometimes the numbers will show that all you really need to do is stay the course. Likewise with the roadmap. If you’re already headed in the right direction, all the map will do is confirm that.
Even this is putting the numbers to work, though. Utilizing the data that you collect through analytics does not always mean making a big dramatic change in how you run your business or a marketing campaign. Sometimes it means making a major adjustment, sometimes it means dropping a new product altogether, sometimes it means making a very slight change in your business, and sometimes it means making absolutely no changes at all. It all depends on a number of factors including the size and scale of your business, what it is you’re selling, who your customers are and so on. Every business is different, every demographic is different, and the analytics will help you in guiding your business, but quite often you may find that you’re already on the right path.
Our custom dashboard from bizlitix can assist your company with your website analytics and help you make better choices with your customers or clients. Understand and know your most frequent customers, how often and what they purchase, what kind of customers they are, and more.
Other times, analytics will show you exactly what’s missing. Analytics can show you where you need to gather more data. If you find that you’re selling more to women than men, then you know that you need to put some work towards figuring out why that is.
Analytics aren’t exactly magic. This is why we compare them to a roadmap rather than GPS. GPS will tell you “In thirty yards, turn right.” Analytics can’t give you instructions on how to get where you’re going. It can give you a lay of the land, it can show you the clearest path to your destination, but you have to apply some of your own elbow grease, resources, and experience to the job of actually getting there.