Starting a new business is always a risky endeavor – but in the 21st century it’s even riskier than ever. These days, research shows that more people are closing their small businesses than opening new ones; according to U.S. census data, the small business sector saw an 8% entrance rate and 9.5% exit rate in the previous decade.
Why are so many small businesses struggling to survive? There are many contributing factors, from the rise of online shopping to the immense power of big corporations like Wal-Mart and Amazon, who gobble up customer bases everywhere they go.
These realities do make it more difficult for small companies to compete, but they certainly don’t make it impossible. In fact, many small businesses have learned how to thrive in this competitive market – all they had to do was master the art of analytics.
What are Analytics?
Analytics is the practice of analyzing and interpreting the data that a company collects. In most cases, this data is related to the digital space – visits to the company website, for example – but businesses can use analytics to study any data collection they have. This skill enables business owners to better understand their audience, which in turn allows them to make better business decisions.
How can analytics help your small business grow? Here are a few important things you can do with analytical data:
Build Customer Profiles
Understanding your target audience is critical if you want to run a successful business. If you’re going to reach your customers, you must understand who they are: their ages, their lifestyles, and what makes them tick. Analytics tools often provide demographic breakdowns within your data, so you can see exactly who is visiting your website or store.
Once you know which type of customers are interested in your business, you can start marketing directly to your customer base. Targeted advertising, special sales events, or even traditional ads can all be tailored to suit your ideal customer. This kind of specialized marketing can result in improved sales and better brand recognition, all thanks to a little analytics.
See Which Products Interest Your Audience
Marketing is a very important part of your business, but it’s only half the battle. After all, the best marketing in the world won’t matter if you don’t have products or services your customers want! But if you’re a business with several product lines or service options, how do you know where to focus your attention?
You’re in luck: analytics can help you here, too! By looking at sales data or web page visits, you will be able to see which aspects of your business are most popular with your patrons. As a small business, this information is immeasurably useful, as it helps you know where to direct your efforts and how to grow your company, so it aligns with your customers’ needs.
Optimize Your Website
Every business owner, big or small, has heard the phrase “optimization” at some point in their career. Everywhere you look, someone is telling you to “optimize:” optimize your website copy so you rank higher in Google searches, optimize your page speeds so your website loads quickly, the list goes on and on.
There’s a good reason for all this optimization talk: it’s REALLY IMPORTANT.
The internet is many people’s primary source of information – and if you don’t put your best foot online, your business is bound to suffer. You can use analytics to study how people find your website, how long they stay, and even how they’re viewing the site (e.g., on a computer or smartphone). Then, use that information to make the best-looking website you can create!
Track Your ROI
As a business owner, you are likely to invest a lot of money into your business. Everything, from new ad campaigns to a repainted storefront, can affect your bottom line – but by how much? With analytics, you can study trends over time, spotting patterns that can tell you which investment efforts paid off – and which ones you won’t want to try again.
Large corporations are constantly collecting and studying customer data, using analytics to shape every decision that they make. As a small business owner, you should be too! Improve your business today by learning more about analytics tools here.