A business generates huge amounts of data daily, from internal operations to user behavior. But let’s face it—without the right tools, that data can quickly become overwhelming and tough to decipher. Here’s where data analytics comes in.
It’s no wonder the global big data market is set to skyrocket, expected to jump from $348 billion in 2024 to $924 billion by 2032. Why? Because businesses are realizing the value of data-driven decision-making.
Data analytics tools take the raw data, break it down, and turn it into actionable insights. Whether you’re predicting market trends, better understanding customer behavior, or optimizing your product’s performance, data analytics helps you stay aware and ahead of the competition.
In this blog post, we’ll break down exactly how data analytics helps modern businesses—and how you can use it to drive better results.
Data analytics identifies market needs and customer preferences
Market needs are the problems, desires, or goals that your target customers have and that your product can solve or satisfy. Going with a gut feeling simply won’t fill this gap. Since market needs are specific, such as a specific feature request, or an existing product update, you need data analytics tools to identify this need. How? By collecting and analyzing data from:
- Customer feedback
- Surveys
- Interviews
- Reviews
- Market research
- Competitor analysis
Using these sources, companies can identify key customer needs, discover market gaps, and analyze competitor performance. To take data analysis to the next level, use SAP BI (Business Intelligence) tools. They quickly analyze data and extract real-time insights.
“Understanding market needs has been critical to creating our product strategy. Through data analysis, we were able to decipher not only our consumers’ clear wants, but also hidden potential that was not immediately apparent.”, says Ali Kahayan, a top Product Management voice on LinkedIn.
Data analytics in product development
Once a business understands its market, the next step is product development. In this phase, data analytics offers insights into how a product should be shaped to meet customer needs.
You need to know what’s happening within your product as much as you need to know what’s going on inside your target users’ minds. Data-driven market research ensures businesses don’t waste resources on developing products or services that customers don’t want. For example, McKinsey reports that companies using advanced analytics for market research experience a 15-20% increase in marketing ROI.
Consider these types of product data:
- User flows
- Bounce rates
- Meta data
- Abandonment/adoption rates
- Heatmaps
Whether you have an app, software, or a website, tracking what goes on inside your product, gives you a live view of whether your product is working or not.
Product data can also reveal new insights and provide surprising opportunities for innovation, and perhaps even a pivot that you never would have considered otherwise.
During product development, analytics track user behavior and performance metrics. By gathering data on how customers interact with your apps, or beta versions, you can identify what works and what doesn’t.
Data analytics taps into customer needs and preferences
Customers today expect personalization at every touchpoint, and businesses are flooded with data—from purchase history to online behaviors. To remain competitive, companies must leverage this data for specific insights into customer preferences. Here’s how data analytics plays a pivotal role:
1. Audience segmentation
Data analytics allows businesses to precisely segment their audience based on behavior, interests, and demographics. By targeting each group with personalized messaging, businesses see higher engagement, conversion rates, and customer loyalty. For example, retail giants like Amazon use audience segmentation to create highly targeted product recommendations.
2. Personalized campaigns
Armed with data insights, marketers can craft campaigns that speak directly to customer needs. This kind of personalized approach doesn’t just increase conversion rates—it creates meaningful, lasting connections with customers. According to research, personalized email campaigns have been shown to deliver 6x higher transaction rates.
3. Improving ROI
With real-time performance tracking, marketers can tweak their campaigns on the fly. This ensures messaging stays relevant and resources are used efficiently. By allocating resources to the best-performing channels, companies maximize their ROI. For instance, SAP BI tools enable businesses to analyze campaign performance swiftly, making data-driven adjustments that lead to higher returns.
4. Optimizing strategies
Data analytics identifies which strategies and tactics resonate most with each audience. By fine-tuning marketing and sales approaches, businesses can ensure they are always optimizing for impact. This leads to higher engagement and greater profitability, as demonstrated by companies that consistently refine their strategies based on real-time data.
Data analytics improves customer support
Analyzing customer interactions and feedback helps businesses address issues before they escalate and create an easy customer experience.
Here’s how data analytics helps customer support:
- Real-time feedback: With data analytics tools, businesses can track customer support tickets, social media mentions, reviews, and emails in real-time. This means they can quickly identify customer concerns, resolve common issues, and adjust their support strategy based on customer sentiment.
- Proactive support: Instead of waiting for complaints, businesses can anticipate issues before they arise. If data shows that a specific feature frustrates users, teams can improve it before negative feedback builds up.
- Optimize user satisfaction: Tracking issues and feedback in real-time helps businesses address pain points quickly, leading to happier customers and stronger retention rates.
Beyond customer support, data analytics impacts every facet of business operations. When businesses incorporate data-driven insights, they can move more quickly, operate efficiently, and make informed decisions.
Data analytics is the backbone of modern businesses
Data analytics empowers smarter business decisions, better customer experiences, and streamlined operations. Instead of relying on hunches, data analytics helps businesses make decisions based on real trends and patterns. This minimizes risk and reduces the likelihood of costly mistakes when launching new products or entering new markets.
Whether you’re improving your products or enhancing customer service, tools like SAP HANA can turn real-time data into actionable insights that fuel growth and boost resilience for your business.
So invest in advanced analytics tools to make data a driving decision-maker in your business.
