For small firms, the key to success often lies in finding ways to do things smarter, faster, and more efficiently than larger competitors. And today, one of the best tools they have to make that happen is data analytics. By collecting and analyzing data about their operations, small businesses can improve efficiency and drive better bottom-line results.
But they have to be smart about choosing where to focus their analytics efforts. Failure to do so could lead to wasteful spending and negligible results. Fortunately, there are a few key business functions that tend to benefit from analytics that make excellent places to start. To elaborate, here are the three most important types of data analytics small businesses should focus on in 2022.
As any small business owner can tell you, labor represents a major portion of costs. According to some estimates, they represent up to 70% of the average company’s overhead. That means small businesses have to try and squeeze as much productivity out of their workforce as possible if they want to succeed. And the secret to doing that is to use workforce analytics to look for every possible opportunity for increased efficiency.
Most workforce analytics platforms give businesses comprehensive time tracking capabilities that provide excellent insight into their operations. That allows them to see how employees’ time gets spent and where there are potential choke points and other hindrances slowing workers down. Many even integrate remote employee monitoring software, which has taken on new importance in light of the ongoing COVID-19 pandemic.
Managing costs and improving efficiency helps, but optimizing sales processes to bring in more revenue is important, too. That’s why small businesses should invest in sales analytics software as a part of their overall data strategy. The field of sales analytics includes tools that can help businesses understand and predict sales trends, so they can be more nimble in reacting to changing customer preferences and needs.
But that’s not all sales analytics is good for. It also helps businesses to fine-tune their sales processes to convert more leads into paying customers. To make that happen, analytics may be used to create and refine a sales funnel to eliminate pain points for prospects and identify stumbling blocks to conversions. And beyond that, sales analytics can help businesses to identify their most important customers — which aren’t always judged by raw purchasing numbers — and act to cut down on customer churn and stabilize their revenue.
In marketing circles, it’s well known that small businesses don’t always devote enough resources to promoting themselves. According to some studies, a whopping 50% of SMBs have no marketing plan at all. And part of the reason for that is the fact that small businesses are loath to spend money on marketing because it’s so difficult to measure their return on investment.
Of course, the solution to that problem is to collect relevant data to analyze marketing performance. Marketing analyticsallows businesses to gain insight into how their campaigns translate into tangible business results. And what’s more, they make it possible to improve those results by identifying high-performing campaigns so the business can devote more resources to them. And that’s not all — marketing analytics can also help businesses slash their marketing spend without sacrificing any meaningful performance.
The Bottom Line
In today’s digitized economy, small businesses have advantages that their predecessors could have never imagined. But many of those advantages can only be realized through the careful collection and analysis of data. The three critical areas identified above are among the best ways that small businesses can operationalize those advantages. And when they do, they’ll unleash their true potential by improving productivity, efficiency, and optimizing every facet of their operations. And those are universal keys to success, no matter the industry.
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