5 Situations Where Data Analytics Comes in Handy

Data analytics is a buzzword that's thrown around a lot. With the rise of big data and the Internet of Things (IoT), it seems like every company needs to hire data analysts. First, you need to understand your business and answer the following questions:

What do data analytics  actually do? 

Do you need them in your business? 

How will they help you and your team? 

The answers to these questions depend on what kind of business you operate, what data you have and how much of it you can access. It varies from company to company. Some of the factors to consider are the size of your business, time, resources and the right tool to use.

In this blog post, we’ll explain what data analytics is, why it’s relevant to your business, and the situations where it’s useful for you and your team. Keep reading to find out more.

What is data analytics?

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The concept of data analytics has been around for decades, but it’s only recently that technology has caught up with the ambition of the field. Studies show that data analytics improves efficiency by up to 63% and better decision making by up to 57%. Data analytics, at its heart, is the process of applying numerical and statistical analysis to data. 

This means taking data from various sources such as your:

• Customer database 

• Your website 

• Customer location insights 

• Sensors in your factory 

Having the right information from these factors will help you get a better understanding of how your business is running. It’ll give you a more detailed insight of what’s happening, leading to better decision making for your business. 

Why data analytics is important

As you can see it's good practice to use data analytics to boost your business. 

The advantages are numerous and highly beneficial: 

• Broad use: data analytics helps with almost any aspect of your business.  Discover insights into your customers, employees, operations, financials, marketing, sales, and more.

• Clarity: data analysts are often responsible for cleaning up messy data sets and making them more understandable to other team members.

• Improved business decisions: it provides a better understanding of your customer base, your operations, and your financial situation. This helps you make better decisions about where to invest your resources and what might be happening in the marketplace that you should be aware of.

Situations where data analytics is helpful and why

Below are five use cases where data analytics comes in handy: 

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Fraud detection is a highly data-driven process; it makes sense that data analytics would play a role in identifying potential fraud. One of the most common uses of data analytics in fraud detection is to use machine learning algorithms to recognize patterns in customer behavior. 

For example, if your customer payment database shows that a certain percentage of customers are paying with a new form of payment (such as Bitcoin), fraud detection systems will flag those customers for additional scrutiny. 

Data analytics recognizes patterns in customer behavior. They apply text analysis algorithms to your customer service calls or emails. These algorithms determine how likely it is a given customer will commit fraud. To be on the safe side, learn how data & analytics can help you detect fraudulent activities. 

One of the most common uses of data analytics in the financial sector is for investment analysis with 93% of companies planning to increase investment. Companies that invest in other companies use data analytics to help them better understand those companies. 

In fact, many venture capital funds require entrepreneurs to provide certain data points when asking for money. These requirements are often data analytics-based, such as providing monthly active user (MAU) numbers, monthly recurring revenue (MRR) figures, and so on. 

Using data analytics to come up with various ways to prevent fraud and to understand your customers helps with getting investors quickly. If you’re looking to raise money from a specific type of investor, you can use data analytics to understand how likely they are to invest in your company.

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Marketers and retail companies use data analytics to better understand their customers and competitors:

For marketers to fully understand customers, they can dive deep to analyze and predict purchasing patterns and preferences. For example, track where the majority of your customers are purchasing from by analyzing their location insights, click-through rates on advertisements, the number of times your website is visited, and the general sentiment of your customers. This data can help you better understand your customers’ desires and the effectiveness of your marketing efforts. You can use CARTO’s software for data mapping. 

Marketers use data analytics to better understand their competitors. Understand your competitors’ strategies, the effectiveness of their marketing efforts, and their strengths and weaknesses.

Data analytics helps you to position your company optimally in the marketplace and make better decisions about how to allocate resources.

Risk management relies on data analytics to understand the risk landscape of your business. Find risk factors in your operations, customer base, and more. With the results, create a risk score for your business. 

This score takes all of your risk factors into account and gives you a single score that represents the overall risk level of your business. Track improvements in your risk level over time and identify areas of your business that need improvement. 

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Healthcare companies use data analytics to better understand their customers, the services they need, and the general health landscape. In fact, many healthcare providers have integrated data analytics into their healthcare systems. 

These systems collect data from all aspects of a patient’s journey. Tracks the effectiveness of certain treatments, identifies trends in health patterns, and even helps your company better understand the shape of the healthcare market.

Wrapping Up

Data analytics is an important tool in the business world. Understand your customers, employees, financials, and more. Make better decisions and discover insights for your business to grow. 

If you’re not using data analytics in your business, now is the time to start. Your team will benefit from the insights provided, and your business will become more efficient and productive as a result.

Author: Cosmas Mwirigi

Cosmas alias Cosii-Riggz is a technology enthusiast and SAAS writer who helps clients understand products by explaining services for businesses. 

He has been featured in websites such as PV Magazine and Bitcoin Kenya. During his free time, he likes traveling to new places and exploring what's new on the internet. You can contact him on his LinkedIn page or email.