Using business intelligence and analytics effectively is the crucial difference between companies that succeed and companies that fail in the modern environment. Why? Because things are changing and becoming more competitive in every sector of business, and the benefits of business intelligence and a proper use of data analytics is key to outperform competition.
For example, in regards to marketing, traditional advertising methods of spending large amounts of money on TV, radio, and print ads without measuring ROI aren’t working like they used to. Consumers have grown more and more immune to ads that aren’t targeted directly at them.
The companies that are most successful at marketing in both B2C and B2B are using data and research to craft hyper specific campaigns that reach out to targeted prospects with a curated message. Everything is being tested, and then the campaigns that succeed get more money put into them, while the others aren’t repeated.
The Mindset Behind Business Intelligence
This methodology of “test, look at the data, adjust” is at the heart and soul of business intelligence. It’s all about using data to get a clearer understanding of reality, so that your company can make more strategically sound decisions (instead of relying only on gut instinct or corporate inertia).
In this post, you’re going to dive into 3 benefits of business intelligence and business analytics, backed up with some real world case studies along the way. By the end of this post, you’ll feel the need to double down on creating a data-driven culture at your company, and you’ll have some hard evidence you can use to persuade skeptical teammates.
Because ultimately, business intelligence and analytics are about much more than the technology used to gather and analyze data. They’re about having the mindset of an experimenter, and being willing to let data guide a company’s decision making process.
The Benefits of Business Intelligence
Image source: Valuewalk
1) You Can Understand Your Customers More Effectively
The first of the benefits of business analytics we will address here is the relationship with the customers. Renowned email marketing guru Andre Chaperon says that “the business that succeeds the most is the one that understands its customers the best”. This case study about Verastel, a German telecom provider, shows the truth of this statement and how they reaped big benefits of BI.
Verastel was doing well in their market, but was facing growing competition and price pressures that caused senior management to look for new ways to reduce customer churn rates. After all, it’s a lot easier to keep selling your services to an existing customer than it is to get an entire new one.
After digging into the issue, Versatel found that they needed to understand their customers’ needs and preferences more thoroughly in order to get more renewals. They had already been using manual methods to do so, but they needed to upgrade their execution. That’s where business analytics came in.
The Benefits of Understanding And Serving Your Customers Through Data
As a Nucleus Research case study states, “deploying [business analytics] has enabled Versatel to have a deeper understanding of customer preferences and behaviors so it can improve the effectiveness of its marketing.”
One big finding was that their customers really disliked having to deal with an outsourced call center for support – they just wanted to talk directly to Versatel when things weren’t going well. By eliminating their outsourced call center and putting things back in house, Versatel was able to increase their customer renewal rates. In other words, by better understanding of their customers’ needs through market research, Versatel was able to keep their churn rates lowest in their industry in Germany.
Through this improved customer support, Versatel also dramatically reduced the number of complaint calls they received in general. This led to reduced call waiting times for customer support, which in turn led to increased customer satisfaction. All these are important customer KPIs that should be measured and tracked on a regular basis to improve your service and retain your clients.
To top it all off, Versatel cut external IT costs in several areas through the use of a BI platform. Since they had a self-service BI tool at their disposal, Versatel didn’t have to spend as much money paying outside firms to do reports for them.
A return of their investment money and then 62% more, getting their money paid back in 1.9 years, and then reaping an average annual benefit of € 454,075.
2) You Can Grade Leads (And Focus On The Best Ones)
Second of our benefits of business analytics is the leads management. The example we will take here is the Michigan State University’s University Advancement department , who faced a dilemma: they were in charge of getting donations from alumni, but their efforts felt like they lacked focus.
With tens of thousands of graduating alumni each year, and 450,000 living past alumni to choose from, how were they supposed to know which alums to focus their fundraising efforts on? A simple solution: business analytics.
As another case study from Nucleus Research states, “using an analytical model [their data analytics software] that calculates an affinity score for potential donors that is based on more than 170 different variables, and [that] provides the team with deep insight into an individual alum’s potential to give.”
While Michigan State had been using data to make decisions in the past, once they started using a business intelligence software, they were able to save themselves a lot of time and headache.
They cited their main benefits as:
- Improved Director and Associate Director productivity
- Improved visibility into donor patterns
- Improved overall user productivity
The improved Director and user productivity came from not having to waste time compiling data analytics, and instead being able to spend time acting on said analytics. The improved visibility into donor patterns came about from those very analytics, and enabled MSU to raise more money from their alumni.
Annual savings of $34,434 due to employees not having to waste time with manual analytics preparation. Other benefits of BI are summed up by the study here:
Image source: Nucleus Research
3) You Can Provide Personalized Service More Easily
The final of the benefits of business analytics tackled in that article is the personalization of service. Santam, South Africa’s largest short term insurance policy provider, faced an issue with large levels of fraud. While the company is quite successful, with annual revenues exceeding 1.88 billion USD, they also faced large levels of insurance fraud – anywhere from 6 to 10 percent of their annual revenue number.
That’s a LOT of fraud, with no easy solution in sight. In order to solve this issue, Santam turned to data analytics so that they could automate the process of looking more closely at each claim for signs of potential fraud, while maintaining high levels of customer service.
As the case study explains, by setting up business rules that were based on already existing data, Santam has been able to create a risk score for each claim involved. Such procedure enabled Santam to automate the segmentation of these claims. This let the auditors to focus on potential fraud and cases that had a high degree of risk for Santam.
Once Santam had made back the cost of their initial “proof of concept” project with business analytics, they expanded the analytics to all of their claims. This process led to the discovery of an organized crime syndicate that was systematically committing insurance fraud against Santam. This happened within 4 months of starting to use a business analytics software.
Additionally, Santam experienced massive time savings through the use of business analytics, as their employees no longer had to spend nearly as much time processing claims.
As the case study states, “low risk cases no longer have to go through the exhaustive due diligence that previously took at least three days to perform.” Afterwards, about 50% of these claims are sped up via an enhanced categorization. 54,000 of claims ie. 15% of the total can be handled in less than an hour: 95% savings in time. A gain in productivity that led to “a reduction of 30 assessors over a three year period, representing an annual savings of R33 million (US$ 3.66 million).”
A massive ROI of 244%, where Santam made back their investment on BI in only 3.7 months, and reaped many other benefits of business intelligence.
Business Intelligence And Analytics Lead To ROI
We’re living in the most competitive business market in history. Technological advances and a global economy have combined to create a pressure cooker of competition, with weaker companies being swallowed up or broken down.
Given the current state of affairs, your company can’t afford not to use business intelligence tools. Especially after we examined 3 case studies that showed the incredible ROI that is possible from using them and the many benefits of BI. Such ROI of business intelligence can come under many forms. You need to know what’s going on in the minds of your customers, whom your next best customers will be, and how to serve them in the most effective ways. All of these areas can be answered with data – which you need BI and analytics tools to process. However be aware of any faux-pas and remember: there are some best and worst practices to know with BI.
When your company has to rely on internal or external IT staff to generate data reports, it creates a huge barrier to what is most needed: a data driven corporate culture, where decisions are validated through seeing reality clearly.
If you’d like to take your first step towards using an intuitive self service business analytics tool, you can try our 14-day free trial and test what datapine can do for you.