Demystifying Analytics
Analytics. The very term seems designed to confuse. Yet, it’s everywhere – CRM analytics, market analytics, website analytics – and everyone seems to be using it. If you’re wondering what the fuss is all about but didn’t know whom to ask, we have news for you. Read on for a crash course!
Let’s begin by saying that your state of bewilderment is not entirely out of place. Most experts agree that there is no set definition of analytics, and vendors use the term to describe different things, as it suits them. The well known research and consulting firm Gartner has tried to set the confusion at rest with a definition as follows: "Analytics leverage data in a particular functional process (or application) to enable context-specific insight that is actionable." If you’re none the wiser, let’s de-jargonize that statement. Simply put, it means that analytics helps to collect and interpret business data and convert it into wisdom, that can form the basis of future action. For example, a study of the visitor behavior on your website using analytics might reveal a high dropout rate before the buying process; this leads to further investigation which might tell you that the shopping pages are too cumbersome to deal with.
Customer Relationship Management (CRM) analytics is widely used as a tool to improve business’ insight into customer behavior. This can help answer many questions that dog marketers – for example, how can I segment my customers, and which of them have the highest potential? Or, what is the probability that a buyer of product A will also want product B? In fact, CRM software vendor Salesboom claims that their web based CRM software can help pinpoint the best and least selling products, identify the biggest or smallest customer, analyze market trends, streamline Supply Chain Management processes and anticipate future growth and other critical business issues. No wonder, more and more marketers are using CRM analytics to crystal gaze, and predict likely outcomes of different marketing actions.
Website analytics, on the other hand, also facilitates similar understanding, but is of greater relevance to businesses that are highly Internet dependent. In our earlier article titled “An introduction to Website Analytics” we talked about how a web based business can leverage this to understand visitor behavior, evaluate effectiveness of online advertising and study its impact on sales. If your business falls into this category, it may be well worth paying a visit.
Analytics also plays an enormous role in the world of finance. It helps bankers, economists and financial strategists assess risk, study costs, analyze assets versus liabilities and do a lot more.
While these are just a few examples, it is crystal clear that analytics can find application in virtually any business. It improves the quality of decision making by providing greater insight into past history and creating a scientific model for predicting the future. No longer do professionals need rely on gut feel alone. Analytics has made managing and understanding data ever so easy!
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