Let Data Analytics Drive the Revenue Train
Call it modern business truism, if you will, but the most effective way to increase ROI is to have a sharp focus on data. Harvard Business Review asserts, “What increasingly separates the winners from the losers is the ability to transform data into insights about consumers’ motivations and to turn those insights into strategy.” If you want to see revenues soar, build an insights engine that not only provides ample data but also connects all the data points, runs effective and efficient analytics, and most importantly, offers actionable insights.
The end result? Higher revenue. The most tangible marker of business success and customer success.
How to Increase RoI with Big Data?
John Procopio, Director of Marketing and eCommerce at Palo Alto Software once stated, “Looking at data is great, but the whole purpose is to come out of it with some sort of actionable steps.” The path from data collection to implementation of actionable insights is where the revenue magic happens. To start, the better you are at connecting every scattered data point, the more success you are looking at.
Sounds easy? Well, look no further than the current automobile supply chain crisis, a colossal analytics failure. Covid-19 did create the semiconductor crisis. But the industry also missed the mark with its overtly pessimistic demand forecast in the light of the pandemic.
So, while it is not easy, there are successes galore. Look at the e-commerce industry, which has used analytics effectively. Like, as driving customers to complete a purchase or exit at checkout. With A/B testing, you pit two distinct options against each other and let the data decide the way forward. You usually start with pages close to checkout and ranking low in the conversion funnel and work your way up from there. The actionable insights: a. go with the better-performing pages b. deep dive into what worked and what didn’t. Take another example – keyword analytics. Let data analytics tell you the most searched keywords and tags from a product-listing standpoint. Make sure the search results are in your favor with relentless SEO, this is yet another case of analytics driving your revenues north.
Let us talk about an elephant in the room – AI. Come to think of it, AI is rooted in analytics. Chatbots are a tried and tested way to improve customer experience and hence drive better sales and collections. But, the days of obvious robotic AI with close-ended responses are long gone. Today, conversational AI is at a stage where it is hard to tell if you are sharing your customer experience with a human or a bot. Innovations like this are direct results of advanced data analytics. With the result being revenue generation, it is time we recognized AI and hence analytics as the star employee of the organization! Having the bot give an acceptance speech would be fun, for sure 😀
Opportunities Galore
Every data source is a potential opportunity for revenue enhancement. A study of the Average Order Value (AOV) can provide actionable insights for increased revenue as well. If your customer’s AOV is $80 and you want to bump it up to $100, you are looking at quite a few options: cross-sell, up-sell, incentivizing purchases through discounts, waivers, etc., creating value combos, and offering subscriptions a few of them. One of the biggest food delivery apps in the US has been offering free membership upgrades to select high-value customers, enticing them to purchase more.
All customer traffic and data sources are useful. Just analyze and customize. Like,
- Is your traffic rooted more in organic searches, affiliates, paid searches, social media marketing, or email lists?
- What are the entry points and exit points?
- How much time is spent in each stage?
Use analytics to answer these questions and to probe further toward conversion into sales.
What is the Final Takeaway?
According to an Insights2020 study, ~70% of executives at ‘overperforming’ companies attribute success to interpreting and connecting disparate chunks of data. Companies have started creating dedicated data groups to consolidate, manage, and analyze all forms of data and distribute them throughout the organization. Their success is the best testimony to the role of data analytics in revenue generation.
Here are some basic principles to ensure success on the path toward analytics-driven revenue:
- No data is useless, it all counts
- Integrate all data sources and systems
- Focus on outcomes, work backward