What are companies using data analytics for? In the post-COVID world, with digital technology promising to drive economic recovery as more people work, shop, and interact primarily online, business analytics can be a huge driver for cost reduction. Big data is growing with no end in sight, and it makes sense to optimize that data for maximum revenue and minimal expenses.
But can data analytics really help you reduce business costs? Yes, because with more information about logistics, marketing, customer retention, employee turnover, and so forth, you can make better decisions for your company and avoid costly mistakes.
One of the most costly mistakes a company can make is hiring someone who doesn’t stick around long. When an employee quits, it costs the average company $15,000. That’s for each employee who walks out.
You can use data analytics to reduce the cost of employee turnover in two ways: by using it to identify the best candidates (that is, the ones who are the best fit for the company’s needs and culture) and by identifying the sources of employee dissatisfaction and using that information to make changes that will improve employee satisfaction and loyalty. For example, you could use analytics to predict which employees will be more loyal based on the facts of their qualifications, or you could use anonymous survey data to identify dissatisfaction patterns in the current human resources pool.
The majority of the data you’ll collect will be about your customers, their habits and preferences, their demographic details, and so on. By analyzing customer data, you can reach conclusions about how to best continue appealing to your current customer base, as well as how to attract new customers — and isn’t that what doing business is all about, in the end?
Smart data analytics can help you figure out what your competition is doing to draw in new customers, online and offline, so you can reach more people and undercut the competition. For the ultimate cost reduction in marketing, advanced analytics can give you a detailed picture of who your customer is, who your competition’s customers are, and what you can do to beat your competition at their own game.
Big data offers unprecedented opportunities to automate simple workplace tasks so that employees’ time can be freed up for more important and, often, more interesting work. Use data collection tools to automate the logging of shipments in and out of a warehouse, giving employees access to all of the information they need about those goods while they’re in your space, such as where they’re located in the warehouse. Digitize records, contracts, reports, and other documents so employees can spend less time digging through filing cabinets and scanning paperwork and more time doing the tasks that only a human being can do — those tasks that require creativity, communication, and people skills, for example. Use data analytics strategies to identify and address areas of employee dissatisfaction, and you’ll end up with employees who are more engaged, more productive, and more loyal.
Without tracking anyone or making anyone feel micromanaged, you can use data analytics to isolate processes and procedures that can be automated to save your workforce time and automatically make them more productive. If you do choose to track productivity, avoid making anyone feel singled out or micromanaged by doing it as a team, and emphasizing that any work towards improvement will be a team effort.
You can also cut costs and increase productivity when you use big data to streamline logistics. Track your inventory, including shipments that need to be kept under certain conditions throughout shipment, like perishable foods. Use the data you collect to choose the best shipping methods and routes, so you can minimize shipping damage, which will cut costs and improve customer or vendor relationships. With big data analytics, you can be in communication with your shipment at all times, if you so desire.
Data analytics can help your business save big. Whether it’s slashing the costs related to employee turnover, attracting new customers and retaining old ones, streamlining your shipping logistics or enhancing productivity, data analytics can help you improve processes and lower costs across the board.