According to a survey, $200B could be saved in marketing if we optimize our marketing campaigns with business analytics. That’s a huge number.
In short, you can free 15 to 20 percent of your marketing budget if you fully optimize your marketing with business analytics.
How does all this happen?
Before we see how business analytics help you in business, especially in marketing, let’s briefly discuss what business analytics is, and what are the three major types of analytics involved in business analytics.
What is business analytics?
A simpler definition of business analytics can be,
Business analytics is a process to transform data into useful information with the help of tools and predict market trends based on the extracted insights and hence make improved decisions.
By definition of business analytics, one can say that it’s pretty simple to look at the data, make predictions, and make decisions but a business analyst understands that practically it’s not that simple.
It requires precision, creativity, curiosity, interest, and huge efforts to extract useful data, make accurate predictions that yield you to make company-leading decisions. Any mistake anywhere can you result in useless if not harmful, results.
But if done properly, business analytics helps businesses grow faster.
Especially, the role of business analytics in marketing has become inevitable. That’s why 97% of businesses use predictive analytics in marketing.
Predictive analytics is one of the most important parts of business analytics. Here is a piece of information to make it digestible for all readers.
Business analytics has three major steps – we call them three types of business analytics.
- Descriptive analytics
- Predictive analytics
- Prescriptive analytics
In descriptive analytics, a business analyst looks at the history, what actually happened earlier, and extracts useful data. This part is critical because there is always vast useless data along with good data. It demands great interest and expertise to pick the right stuff out of the trash.
The other two steps of the process are even more important for business analytics because these are the areas where interest, curiosity, and creativity work altogether to make the best decisions.
In predictive analytics, with the help of history, business analytics predicts where the trends can go. This part of the process is the pillar of what a business will adopt for the future. In this part, a business analyst predicts what will work and what will not.
Along with all other areas of a business, predictive analytics is used in marketing to cut the price. We will discuss how predictive analytics can be used in marketing.
And at last, in prescriptive analytics, a business analyst helps a business make decisions based on the predictions.
Now let’s see how business analytics can be practically used in marketing and sales. Let’s dive into business analytics vs marketing.
Application of business analytics in marketing
It’s found that companies spend $1 trillion on marketing.
What’s the purpose of spending this much huge amount on marketing?
No matter what product or service you are offering, if you are marketing it, you want to sell it. That’s the biggest goal of any marketing campaign. Isn’t it so?
But do you know, some businesses spend less money and get more conversions than some others? Why?
Here is an example to make you understand it.
In research, it’s found that some car dealers spend $1500 a car sold on traditional marketing methods while others spend ten times less with digital marketing strategies.
This is the result of business analytics in digital marketing. By utilizing predictive analytics in digital marketing, one can get the best results with the least spending.
Let’s dig a little deep into it.
In traditional marketing, you have less control over the campaigns, say, you can select a place for your billboard but you can’t control who will see your board.
In digital marketing, you can control who will see your ad and when?
That’s why you get ten times more results with the same budget.
It’s not only digital marketing but business analytics are important in traditional marketing as well.
An analyst helps in digital marketing the same way he helps you make decisions on how you can get the best results with traditional marketing with market research.
But, for now, let’s take an example of a digital marketing campaign to see how you can utilize business analytics for marketing.
It will also make the data digestible for you.
Business analytics in digital marketing
If you are running an ad anywhere on the internet, you always get data for your ad campaign.
Either you run ads on the search engines like Google, or run them on big social media platforms like Facebook. All of them provide you with the best possible information, we call that information – data.
For instance, you are selling a course and running a campaign on Facebook.
You set no limits for your ad, and see how it goes for all Facebook users. First of all, it will appear in front of all the users of Facebook. Sooner with the help of the Facebook algorithm, it will automatically find relevant people, and the ad will get a reasonable amount of conversions.
Say, you got 1% conversion along with huge data. The data might contain, age, gender, interest, region, engagement, and much other stuff about the users who saw your ad.
Now here is the time to utilize predictive analytics for marketing.
With predictive analytics, you will make groups of the people who purchased your course, and who engaged with it.
Even the engagement might be of different types, and you will realize that a set of people are more likely to buy your course.
Now you will make a decision to run another campaign to target that kind of people. And surely the conversion rate will grow much faster than you think.
It was a simple example of how analytics can be used in marketing to minimize costs and increase conversions and maximize profits. But you can utilize business analytics in marketing for any kind of goal. If you do it properly, you can take huge benefits from using business analytics in your business.