If you are a business owner, or even just an internet user, you have probably heard talk of analytics and statistics. These areas are frequently recommended to look into and invest time and money into in order to gain more success for a business. But what exactly are they, and how can they be used to help your business? In this guide, we will delve deep into these topics.
What are Analytics and Statistics?
The terms ‘analytics’ and ‘statistics’ are sometimes used interchangeably. However, they are in fact specific different processes and disciplines. To understand both, you first have to understand the data. Data is objective information, often numerical in nature. An example of data is the number of times a particular internet user has visited a particular website in a particular time frame. ‘Joe Bloggs visited x company’s website 7 times in the last week’, for example, is a piece of data.
‘Statistics’ is the term used to refer to the collection, organization, interpretation, and study of data. Statisticians use data to make calculations. ‘31% of x company’s customers are located in the United States’ is an example of a statistic.
‘Analytics’ are similar to statistics, but the field of analytics is specifically centered around the discovery of meaningful patterns in data. Analytics uses statistics to make future predictions, for example ‘this summer there will probably be an increase in the value of stocks in x company, as there was a similar increase last summer.’ Analytics is more subjective than data or statistics.
To put it in the simplest possible way, analytics is ‘the analysis of statistics’.
Which Industries and Fields Use Analytics and Statistics?
Analytics and statistics are used in almost any industry that you could name. It probably goes without saying that militaries and technology companies use data and statistics extensively to carry out a range of operations and developments. Data, analytics, and statistics are the foundation of science and medicine, and are used to do everything from identifying potential new strains of viruses to developing new drugs. Sociologists use analytics and statistics to make observations and predictions about human behavior, and economists do the same to help understand the state of the stock market and the global economy. Political scientists also use them to make predictions about the results of elections and other political events.
Commercial businesses also use analytics and statistics. For example, the manufacturing industry uses them to monitor supply chains and the efficiency of machines. Insurance companies use them to predict the likelihood of liable events happening. Gambling companies and bookmakers use them to predict odds. Entertainment companies such as TV networks and film studios use analytics and statistics to assess what kind of content is popular and make decisions on future development and broadcasting. Banking, sports, transport, hospitality, agriculture, and retail also use these tools and techniques.
It is difficult to think of an industry that does not use analytics and statistics in at least some way!
How Can Marketers Use Analytics and Statistics?
One area in which businesses can most clearly benefit from the use of analytics and statistics is that of marketing. Marketing is essential for building and retaining a solid customer base, and for helping the business to grow. There are many ways in which marketers (usually digital marketers, but also those using more traditional forms of marketing) can use analytics and statistics to increase the effectiveness of their business’ marketing strategies.
Market Research and Product Development
Market research and product development are other areas that marketers can make use of analytics and statistics in order to benefit. Market research is an important part of any business strategy, and it can be carried out by creating surveys and polls, talking to people in real life, and also using analytics. For example, analytics can show you how many people visited certain web pages or searched for specific search terms. This can be used for SEO (or Search Engine Optimization), which is an essential part of a digital marketing strategy in the modern digital world.
SEO involves using analytics tools to find out what specific search terms internet users are using on search engines. This knowledge enables web designers and online marketers to create written content for company websites and blogs that includes these specific search terms, resulting in the webpage ranking higher up the list of a search engine’s results page. This usually results in an increase in traffic to the site, and therefore an increase in sales and profits.
Although product development is a different skill and area than marketing, there is a link between the two disciplines, and product development and marketing departments are most often in close contact with each other. This is because the statistics that marketers find can be useful for feedback on existing products. This feedback can also be used as inspiration for what product development decisions to make in the future, and what may be better off avoided because it has not been successful.
Finding Where to Reach Consumers
Analytics and statistics can be used to identify trends such as where in the world particular types of marketing content or specific social media accounts or channels are most popular, and where in the world they are least popular.
This can help marketers to tailor promotional content to specific locations, rather than using a “one size fits all” approach that does not take into account factors such as cultural differences or language barriers. Marketing is largely about psychology and tapping into people’s emotions and needs, and the priorities of a potential customer in Singapore are likely to be very different from those of a potential customer in Houston, Texas.
It is not just global geographical locations that analytics and statistics can be used to explore—online ‘locations’, such as different websites or apps, can also be very useful to discover in a marketing strategy. For example, marketers could discover that 78% of online traffic to their business’s website came via redirects from Facebook or any other social media networking site. This may help them decide where best to allocate time, money, and other resources. However, there is usually still some human creativity that is involved in using this data to its full potential. Decisions will still have to made, such as whether it is a better strategy to continue doing what is working and investing in Facebook ads, or whether it could be preferable to shift time and money to comparatively underperforming platforms.
Predicting Future Trends
The use of analytics and statistics to predict possible future events and trends is extremely useful to businesses for a number of reasons. Analytics can identify trends such as what time of year (or even what specific time of day) particular events tend to happen. On a larger scale, this is used by economists and companies in the finance industry to plan for future shifts in the stock market. On a smaller scale, it can be used by, for example, the owner of an online store as a way to see what times of day the most sales are made, so that marketing and business strategies can be developed around this knowledge.
It is not just financial and economic trends that can be identified through the use of analytics and statistics. Factors such as weather and climate are also analyzed to predict possible future trends, not just by meteorologists but also by commercial businesses; find out more here. For example, if the owners of a holiday resort identify the likelihood of heavy rain or other poor weather during a particular month, they may be able to anticipate and prepare for reduced custom at that time and focus their marketing efforts and promotions for other times which are likely to be more profitable.
What Analytics Tools are Available?
There are many different ways to carry out analytics, and the discipline can be traced back before modern technology. However, the field of analytics has become increasingly important and widely invested in since the advent of the digital age. This is because technological developments have made it possible for computer programs to carry out highly accurate, detailed analytics reports in just seconds, or sometimes even in real time!
There are plenty of different analytics tools available for your business to make use of, from open-source solutions such as Python and Apache Spark to commercial solutions such as SAS, Tableau, and Splunk. Tech giant Google also has its own analytics tool, unsurprisingly named Google Analytics. Google Analytics is extremely popular and widely used by business owners, but no one service is the best for every user. If you are serious about using analytics to benefit your business, it can be useful to do some research into the different options that are available before you choose which one to use.
As technology advances, analytics and the tools used to carry them out are likely to get more and more accurate. This prediction itself is a form of analytics, based on previous statistics! If you can make a prediction based on past experience or knowledge, you are practicing analytics.