But, even without the best pricing, there are ways to differentiate your products, become a market leader, and ultimately maximize your revenue. Analytics is the new “secret weapon” of choice for many companies. Having a heavy focus on analytics allows companies to make better decisions based on a high quality of data and analysis.
These tools can be used for a variety of functions, from determining pricing strategies to enhancing your company’s brand loyalty. But, before tackling your analytics strategy, it helps to have a few pointers.
Choosing your Focus
When creating a plan for analytics, it’s important to focus your efforts on areas with potential for the largest impact. Developing data and strategies around these areas pave the way for market leadership, and better results. Here are a few items to consider:
Research and Development: Many companies allocate large resources on research and development, which can be smart when done effectively. When managing this area, use analytics to improve the effectiveness of this process.
Brand Loyalty: Once you’ve identified the most profitable market segment, it’s important to focus efforts on measurable retention strategies. Analytics can help you gather the information needed to accomplish your goal. This will enhance brand loyalty, and create lasting momentum for your company.
Quality of Services or Products: Catching problems before they become widespread will help you quickly contain problems, and create solutions. Analytics can help you track this information, and create strategies for improvement.
Supply Chain Management: Holding inventory too long is expensive and can negatively affect your bottom line. The quicker your product moves, the less holding costs, and the more revenue. Using analytics to manage this process will allow you to operate more efficiently, and have better cash flow.
Fine Tuning Pricing Strategies
An important part of analytics is determining your consumer’s threshold for pricing, and setting a pricing point accordingly. You can also expand your offerings, as discussed in The Harvard Business Review article, “Competing on Analytics.” After Lawyer For Business Startup Near Me mastering pricing strategy, Marriott International expanded their expertise to areas like conferences, catering, and internet sales. This gave the company many opportunities to fine tune pricing, and appeal to profitable market segments.
Focusing on Retention Strategies
Most businesses know it’s more expensive to generate new customers than retaining your existing customer base. This means that developing optimized programs Finance Consulting Companies In India and targeting your loyal customers is worth the expense. Allocating resources on analytics focused on this area will yield positive results.
Shaping Revenue Strategies
In addition to implementing a retention program, companies should consider measurement tools which allow tracking for optimal revenue potential. For example, in the same article “Competing on Analytics” by the Harvard Business Review, Marriott created a revenue-management system that was designed to measure and grow revenue. Using this measurement tool allowed Marriott to grow their revenue from 83% to 91%.
High Impact Analytics Teams
When incorporating analytics into your company’s strategy, consider choosing skilled employers across all business units to join the team. For example, employees working in business units such as: marketing, operations, sales, and consumer research can maximize the impact of your team. That’s because a variety of backgrounds allows greater insight into the process and strategy behind analytics.
Role of Leadership in Analytics
Although not every CEO or senior manager has a background in statistics, having a trusted group of advisors can help them wade through information easier resulting in better decisions. These leaders should have internal consultants with expertise in this area to assist with questions. Also, when hiring employees in all departments, make sure there is a nice cross-section of employees who are skilled in analytics.
Managing and Sharing Analytics Data
The data collected during the analytics process is valuable across all sectors of your organization. For example, analytics can be used for developing pricing and promotional strategies – and for sharing with vendors and business partners to work towards future strategies and promotions.
In addition, this information can be used to tell a story about your company. Results generated from this information are valuable in your annual report, investor communications, and even marketing materials.
Overcoming disadvantages in the marketplace isn’t easy. But having analytics on your side will enhance performance, and drive revenue. And remember that analytics should guide your decisions, but ultimately you’ll also need to trust your instincts. Using facts to direct your company’s resources, combined with your best business ideas will turn your instincts into tangible results.
Author Info. “Competing on Analytics.” Harvard Business Review, January 2006