If you’re in restaurant or retail management, chances are, you’re constantly seeking the most practical, efficient methods for improving operations and generating more business. But have you ever felt like you would have changed some aspect of the way you operated in the past if you knew then what you know now about the results that those processes generated?
If you can answer, ‘yes’ to that question, you could very well benefit from the use of business analytics. Impossible as it may be to change the past, it can still be leveraged to help you make better business decisions now while developing stronger strategies for the future – and that’s what business analytics is all about.
- Business Analytics Basics
Here’s a breakdown, in plain English, of just exactly how business analytics is intended to work:
- Data is generated during routine business operations – credit card swipes, customers clicking through emails sent by your company, inventory counts – and is stored with the help of some sort of record-keeping tools or software, such as a point of sale system.
- The data that’s been collected is interpreted, assisting you in discovering why some aspect of your business has been performing the way it has been – whether better than anticipated, or surprisingly poorly.
- By measuring the data to develop these insights, you can now produce actionable change – that is, you can actually tweak ‘X’ activity from the past to modify subsequent results. It is now possible to predict trends based on past processes, while adjusting what’s been causing them to accomplish more desirable outcomes.
Business analytics can help you change your business operations for the better, even uncovering information you would never have discovered without having analyzed your company’s data in this manner. The practical applications are limitless, from improving product pricing methods to running more effective sales and promotions. Save time and money, reduce overhead, and increase your company’s ROI by harnessing this powerful method of analysis.
- Business Analytics in Practice
Let’s look at a real-world example of how analytics can be used to improve your business processes:
Suppose you own an ice cream shop, and you’ve utilized business analytics to discover that the Chip-and-Mint flavor is your best-seller, while very few customers purchase Cookie Dough.
You could use this new insight to ensure that the most popular flavor is adequately stocked to meet demand and improve customer satisfaction, eliminate product waste by ordering less of the underselling item, and even work this new knowledge about both items into your future marketing efforts. By promoting the best-selling or flagship product, you could attract more customers; or, you could place the overlooked item on clearance and promote it during a sale.
With the use of data analytics, you can make better informed decisions about which products to stock, how many, and at what price. As you gain a deeper understanding of which of your products are selling and why, you’ll save your business money by significantly reducing its operating costs for the long haul.
- Make Changes Now for Positive Future Results
The above is just one example of what business analytics can do for your business on a practical level. The ultimate benefit of this method, however, may be the fact that it helps you answer the tough questions – and likely, many questions that you wouldn’t have otherwise thought to ask – like:
- Why did ‘X’ occur?
- Is ‘X’ likely to occur again, and does there appear to be a pattern here?
- What will happen if ‘X’ changes?
- What insights did I gain about my business that I wouldn’t have gained otherwise?
- What can I now improve that isn’t working?
- What am I doing now that I should keep doing?
What these questions all have in common is their discouragement of reactive thinking in favor of proactive decision-making. Therefore, the ultimate message behind business analytics is this:
Rather than wait until the aftermath while we’re picking up the pieces to discover what went wrong, let’s see what direction we’re heading and make sure it’s the right one. And if it isn’t, let’s change course to ensure we’re heading down the correct path – for our business’ continued advancement and success.