Having worked as a Business Analyst I have been a keen follower of data analytics and big data in my career. Driving operational performance and excellence is one of the key drivers for analytics. The challenge we all face these days is to accumulate and structure data in order to derive meaningful information out of it. In the words of Daniel Keys Moran, an American computer programmer and science fiction writer, “You can have data without information, but you cannot have information without data.”
Earlier this month I got an opportunity to talk to an old friend who is into the distribution business and has made analytics the foundation to expand his business. Rather than getting a team of clerks and consultants for generating all the reports he needs, he has built an in-house team of two persons dedicated to data analysis using a simple analytical tool.
What he told me increased my conviction that data analysis is the key to business growth. His business was successful and growing at a rate of around 12% every year. However, since the time he has focused his energies on analytics he has achieved around 30% growth each year for the past 2-3 years.
Some of the key areas where he used analytics to drive sales, improve collections, reduce bad debts and increase profits and customer satisfaction are listed below.
1.Improve Product Availability
Product availability and stocking is the key in the distribution business. By tracking the sales history and stocking level of retailers the business was able to sell on time and reduce sales lost due to stock outs. While this improved sales, this also increased customer satisfaction for the retailers since they had better ROI on their investments.
2.Better Sales Performance
Sales depend on a number of factors but it is important to notice customers who are moving away from the company’s product to a competitor product. Using sales analytics, customer trends were analyzed to see customers who are reducing business or becoming dormant. A call or a meeting then helped in re-galvanizing the business relationship. While this was targeted at sales growth it also helped in reducing bad debts.
3.Improve Product Portfolio
Seeing sales trends is important when the number of products is large and to notice changing customer tastes and other market dynamics. A simple report showing contribution of sales by product or ranks over a time period can help identify trends. This information was then used to drive product changes and feedback to suppliers which helped in identifying future winners and potentials.
4.Increase Customer Retention and Value
Customer retention is the key to business growth. Also critical is to keep increasing the volume of business you do with your existing customers. Identifying such customers based on past data and planning sales and marketing investments led to better customer relationship and sales growth.
While an entrepreneur is focused on sales, cash flows, debtors the bottom line of a business is critical to survival. In times when sales are down due to external factors or seasonal fluctuations managing cost is important. The business used analytics to gather information on cost for its fleet of vehicles integrating GPS data with accounting data to improve operational parameters.
6.Improve team performance
Many businesses drive individual or team performance using targets. Providing team and individual data on their achievement on a real time basis helps them in planning their work and balance. Real time information on sales target vs achievement were provided to sales persons including run rate required to achieve the target. This became a driver to encourage people to meet their targets. Since analytics were available targets were also given to each individual to reduce the average collection period.
7.Reduce redundant work
When businesses do manual crunching of data they spending precious time and resources in collating and compiling information. During this time the decisions which can yield profit or cut losses are on hold and sometimes become redundant when the information becomes available. Usage of an automated tool helped reduce the time from data to information and timely decision making helped in achieving that growth multiple.
When you deep dive into the data which you already have it can yield wonderful results for your business.
Do you have some interesting stories to tell about how you used data analytics or wish to discuss a problem which you have been facing? Write in to me at firstname.lastname@example.org and I would be glad to help.