Business intelligence alone does not bring money, but helps the company find situations and factors that reduce profits, and then suggests how to eliminate them. It is also beneficial to use analytics if a business wants to:
Monitor the achievement of goals and monitor indicators that affect the income and revenue of the business. To do this, use various programs and applications, for example, web analytics.
Make decisions faster. The enterprise can use the results of the analysis to make decisions. For example, if it becomes known that a certain product has a high purchase price, but is not in demand among buyers, the company may decide to abandon it altogether, and thus reduce costs.
Detect risks and avoid them. If suddenly a company, based on the results of business analytics, sees that the indicators have decreased – for example, sales have fallen after growth – it is looking for reasons. For example, the reasons may be new sales scripts that managers have not yet studied well. To remove this risk, the company’s management conducts additional training for employees.
What types of analysis are used in business intelligence
To solve business intelligence problems, there are many methods of analysis. Below are some of them.
ABC analysis. The analysis is based on the classification of goods by the amount of revenue they bring. Thus, it turns out to single out groups that bring maximum and minimum profits and, in accordance with this, adjust the assortment: launch promotions and discounts for poorly selling goods, purchase hot goods from suppliers and always have them in stock.
Factor analysis. In the course of the analysis, factors that affect sales volumes, the cost of purchases, and the assortment are identified. Factor analysis is useful, for example, when developing a pricing policy, when it is necessary to answer the question: “What buyer in what price category is inclined to choose a product.”
Marketing Analysis
Marketing analysis in business analytics is the analysis of data that was obtained through marketing tools: loyalty programs, promotions, advertising campaigns.
Marketing analysis is used when it is necessary to study market trends, factors affecting demand, the results of promotions.
During the analysis, marketing research is carried out:
- market – study the supply and demand for goods;
- companies — analyze sales scripts, qualifications of employees;
- competitors – monitor the main competitors;
- goods or services – whether the target audience is correctly defined, the assortment is selected or the system of bonuses and discounts is built.
Thanks to the results of the study, the business understands what changes to make to the product line, at what point to launch advertising, how to stand out from competitors, what to do to increase sales.
Competitor analysis
During the analysis, they study the assortment, pricing policy, website, social networks, strengths and weaknesses of competitors. They do it to understand:
Which of the competitors offers similar products and services. Then they change the assortment in order to offer customers something unique. Or expand the product line to offer more than competitors.
What is the market share of the competitor? In order not to compete for the attention of buyers with other companies, a business can find a free niche and take it.
What discounts and promotions are offered by competitors. According to the results of the study, the business is strengthening its proposals.
What ideas similar companies use. Further, the business can borrow those ideas that will benefit him.
HR analytics
The tool is used to understand whether employees are coping with their duties or not, whether wage costs are rising, and also:
- change the hiring process: when interviewing an applicant, do not rely on intuition, but follow clear steps and requirements;
- ensure favorable working conditions so that employees do not quit;
- redistribute the workload among managers.
End-to-end analytics
End-to-end analytics is a program that collects sales and spend data from multiple advertising channels in one place. It shows which advertising sources bring not only requests from customers, but also sales. Further, based on the results of the analytics, the business manages the advertising budget: it spends more money on profitable advertising channels, and less on unprofitable ones.я
Target audience analysis
The target audience is a group of people who are more likely to be interested in the goods or services of the company and buy them in the future.
During the analysis of the target audience, it is determined who is interested in the goods and services of the business. To do this, they study the history of purchases, analyze users on the site, or interview existing customers.
As a result, the business finds the needs of potential buyers, begins to better understand their motives for buying. Based on this knowledge, he makes advertising offers, forms a range of goods.
Target audience segmentation
The method involves dividing the customer base into certain groups. Buyers are divided according to the following parameters:
- common features;
- the type of product they buy most often;
- type of consumer – a novice consumer, a regular customer, a customer who has not bought anything for a long time;
- situations in which customers buy: the beginning of a sale, updating the assortment, the onset of the season – for example, winter;
- through the distribution channel of goods in which customers buy most often – in an online store, in an application, at offline points of sale.
Segmentation is used to build personalized ads, identify objections that are specific to certain groups of people, or develop content for each segment through which a business will promote its products.
RFM analysis
Through RFM, the existing customer base is segmented by parameters:
- the age of the last purchase;
- number of purchases;
- purchase amount.
As a result of RFM analysis, customer groups are formed. For example, those who bought recently or bought a year ago. Next, a marketing strategy is created for each group. For example, for those who bought a long time ago, they set up a reactivation chain of letters in order to return their interest in the brand. Those who buy regularly are offered a system of cumulative bonuses.
An example of customer segmentation using RFM analysis
LTV calculation
Lifetime Value or LTV is a metric that reflects how much money a client has brought to a company for the entire time that they have bought a product from it. The method of analysis is based on this metric.
Analysis is used to predict future earnings. Let’s say a company calculated that its customers would bring it ten million in six months. This means that she can already plan how she will spend this money: buy new equipment or expand the staff of managers.
Cohort analysis
The method is used to find out how certain groups of customers behave over a period of time. To do this, buyers are combined into one cohort – a group.
For example, in October, a customer came to the site from contextual advertising and bought winter tires. Therefore, it can be attributed to the following cohorts:
- “Clients who came from advertising” – allows you to evaluate the effectiveness of advertising channels;
- “customers who bought winter tires in October” – helps to determine the seasonality of goods;
- “Buyers of rubber” – gives an idea of the demand for a particular product in different segments of the target audience.
Read also
Cohort analysis in email marketing and other areas
Sales analysis
Among the methods of sales analysis are the following:
Sales dynamics. This technique compares how many sales a company had in different periods of time. Based on the results, they trace patterns and develop a strategy to increase sales: increase the staff of managers, launch a new advertising campaign.
Plan-fact analysis. In the course of the analysis, planned indicators are compared with actual ones. For example, if in June it was planned to sell 1,000 plastic windows, but in fact only 340 were sold, they find out what went wrong: the purchasing department did not work well, the suppliers did not deliver the goods on time, or the managers could not conclude a contract with the developer company.
ABC analysis. The analysis is based on the classification of goods by the amount of revenue they bring. Thus, it turns out to single out groups that bring maximum and minimum profits and, in accordance with this, adjust the assortment: launch promotions and discounts for poorly selling goods, purchase hot goods from suppliers and always have them in stock.
Factor analysis. In the course of the analysis, factors that affect sales volumes, the cost of purchases, and the assortment are identified. Factor analysis is useful, for example, when developing a pricing policy, when it is necessary to answer the question: “What buyer in what price category is inclined to choose a product.”
Marketing Analysis
Marketing analysis in business analytics is the analysis of data that was obtained through marketing tools: loyalty programs, promotions, advertising campaigns.
Marketing analysis is used when it is necessary to study market trends, factors affecting demand, the results of promotions.
During the analysis, marketing research is carried out:
- market – study the supply and demand for goods;
- companies — analyze sales scripts, qualifications of employees;
- competitors – monitor the main competitors;
- goods or services – whether the target audience is correctly defined, the assortment is selected or the system of bonuses and discounts is built.
Thanks to the results of the study, the business understands what changes to make to the product line, at what point to launch advertising, how to stand out from competitors, what to do to increase sales.
Competitor analysis
the analysis, they study the assortment, pricing policy, website, social networks, strengths and weaknesses of competitors. They do it to understand:
Which of the competitors offers similar products and services. Then they change the assortment in order to offer customers something unique. Or expand the product line to offer more than competitors.
What is the market share of the competitor? In order not to compete for the attention of buyers with other companies, a business can find a free niche and take it.
What discounts and promotions are offered by competitors. According to the results of the study, the business is strengthening its proposals.
What ideas similar companies use. Further, the business can borrow those ideas that will benefit him.
HR analytics
The tool is used to understand whether employees are coping with their duties or not, whether wage costs are rising, and also:
- change the hiring process: when interviewing an applicant, do not rely on intuition, but follow clear steps and requirements;
- favorable working conditions so that employees do not quit;
- redistribute the workload among managers.
End-to-end analytics
End-to-end analytics is a program that collects sales and spend data from multiple advertising channels in one place. It shows which advertising sources bring not only requests from customers, but also sales. Further, based on the results of the analytics, the business manages the advertising budget: it spends more money on profitable advertising channels, and less on unprofitable ones.