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Most business leaders are aware that data can offer insights about where operations can be streamlined. But data isn’t just used for reducing overhead—it also has the potential to offer up a wealth of other benefits when combined with a smart business intelligence strategy. Even when your business is already running at maximum efficiency, you might be surprised at how well data can identify market opportunities and boost sales and visibility.
The success and growth of a business rests on identifying and capitalizing on promising market opportunities. Such opportunities can prove elusive for those who aren't utilizing their data effectively. No matter how business-savvy an organization’s C-suite may be, their innate ability to identify new opportunities in the marketplace can always be improved with a few data analytics tools. For example, data is more likely to show the small changes in consumer behaviors and preferences—the kinds of changes humans might easily overlook.
The Constraints of a Conventional Approach
Both B2C and B2B organizations have historically identified market opportunities from bigger trends, keeping an eye on competitor strategies, and trial-and-error. Customer pain points are usually interpreted through customer feedback and surveys to some degree, but these methods often lacked accuracy .
Leaders could deploy resources by looking at the historical and current performances of a given region, adjusting based on the long-term trends of a few basic datasets. When the time came to attempt to exploit a new market, teams would follow strategies that worked in a similar market, then a period of trial and error would determine whether they were successful. While potentially effective, this process is extremely inefficient. Not all markets behave similarly or continue to behave in a particular way, even when it seems like they should. And a lot can be learned from trial and error, but it also wastes a lot of time and resources. As time-to-market shrinks more and more, most companies don’t have the time and resources to waste like they might have in the past.
However, businesses are now finding that they no longer need to grasp for straws when trying to identify new market segments. Thanks to advancements in business intelligence technology, conventional approaches are shifting to data-driven approaches, which are far more efficient, accurate, and comprehensive.
How the Big Players Use Data Analytics for Market Opportunities
Research has shown that the businesses effectively utilizing data analytics for trend prediction are better positioned to anticipate consumer needs, optimize their marketing strategies, and then achieve data-driven growth. This is evident almost everywhere you look when you start paying attention to the way heavy hitters, like Amazon and Starbucks, use their data. For example:
- By now, most of us are familiar with the suggested tv shows and movies that pop up on Netflix and most other streaming services. Netflix collects data , like the time their subscribers are watching, whether they binge-watched certain shows, if they pause shows, and if they resumed after pausing. All of this data allows them to create personalized suggestions that keep customers coming back for more.
- To address poor performance with some products offered by their third-party sellers, Amazon launched tech tools that analyze data from customer reviews. These tools are provided to their third-party sellers, to improve their products and services, and ultimately, increase Amazon’s revenue. They are also helping sellers create product listings based on customer data with the help of generative artificial intelligence (AI).
- Starbucks initially launched their rewards app to collect data about customer preferences and buying habits. This information allowed them to offer their customers products based on their personal preferences, and to check in with them (potentially offering discounts) when they haven’t visited in a while.
All of these companies have invested heavily in data analytics for market opportunities—and they have remained some of the biggest brands by doing so. Of course, you don’t have to be one of the largest corporations in the world to use your data effectively. With the right tools and mindset, any company can experience data-driven growth.
Tapping Into Data You Already Have to Identify New Market Segments
So, how do smaller businesses use data the way that ultra-successful mega-corporations do?
To identify new customers in new markets, an organization needs to have a good sense of what their current customer base looks like. This picture can be painted through customer data. All modern-day organizations have access to an incredible amount of data that tells a story about their customers’ preferences, interests, and demographics, as well as how they make decisions. Finding this data is rarely a problem.
Making customer data usable is more difficult, at least initially. If data is spread over a range of disparate sources—a sales division, an accounting division, and a marketing division, for example—combining and analyzing it through conventional (read: manual) means can be all but impossible. But, a smart business intelligence strategy will automate this entire process. That process look something like this:
- Data from a wide range of disparate sources is combined into a data warehouse . This data can come from within the organization or be pulled in from other sources.
- Good data analytics software solutions quickly, efficiently, and accurately analyze this data and use data visualization tools to organize it in a way that showcases important insights in an easily digestible way.
- Each team, employee, or branch of your organization can use data dashboards with key performance indicators (KPIs) that are tailored to their specific goals.
- The resulting insights can be used to make more informed business decisions. For example, businesses can choose which new market segments to target by tracking which customer types are researching or inquiring about their products or website traffic, app downloads, and purchase histories can be studied to uncover trends in customer desires and predict future markets.
Once your data warehouse is set up to consolidate data from all your company’s sources and your team becomes familiar with data dashboards and visualizations, putting your data to work becomes much easier on a day-to-day basis. Implementing a more data-driven culture in the workplace can facilitate the transition from conventional approaches to data-driven decision making. At that point, using data analytics to identify market opportunities will feel like second nature.
Identifying new market segments and making business decisions to target them is probably one of the most common ways to use data analytics. Here are some examples that can lead to data-driven growth:
- When data shows that its product or service is particularly popular with a certain demographic, a business can look up data on which markets which are proportionately higher in that specific type of customer. For example, a dog-walking business looking for more customers might look into data on which neighborhoods have more dog owners that work outside of the home or go on frequent trips. Then, they can advertise in these neighborhoods.
- If a product or service has seen a marked increase in popularity within a certain demographic, marketing strategies can be changed to better advertise to these customers. An example might be something like a ready-made healthy meals delivered to homes. At first, the company may be uncertain about which demographic this service will be most popular with. After gathering data on their initial success, they can determine who used the service most and shift their advertising to coincide more with that demographic.
- Data analytics can be used to get a sense of the ideal customer experience–from how customers browse your products and select them, right through to the way they prefer to make payment. This knowledge can be leveraged to shape the customer journey within new markets. For example, if you set up a new website for your business and the website data tells you that most people prefer to look at specific categories that require them to enter search terms, you can modify your home page to have a button corresponding to that search, making browsing faster and easier.
Getting Your Team on Board with a Business Intelligence Strategy
The effectiveness of these efforts will rest heavily on the attitude of senior management. If leaders show a willingness to try something new, follow through on the insights offered up by the data, and then celebrate data-driven wins for the company, success is all but guaranteed.
At CSG, we ensure flexibility and responsiveness in our projects, with an approach that centers on adaptability and understanding our client's unique needs. If your company is ready to identify new market segments with the precision and efficiency of data analytics tools, CSG is there to implement a solution that you and your team can get excited about. Contact us today to find out how we can help.
