Preparing for a possible Economic Slowdown with Data Analytics
Companies have historically faced ups and downs during economic slowdowns and have always looked for techniques to cut costs and maximise profits as cash reserves are low. However unlike previous incidences of economic slowdowns, companies this time around have profit margins that are at all time highs. With this, big corporations around the world are sitting on piles of cash, and instead of cutting costs they are hunting for ways to invest their money into avenues which will provide a good ROI. They need to have a proper plan in place to ensure that the money invested has a high ROI.
Some advisors say with the slowdown in sales during a recession, it is a good time to shift some of the focus to technology and ramp up that part of a business. But others suggest that the best time for an organisation to conduct a digital transformation is before a recession hits. Acting before time allows a company to be proactive, rather than reactive, with its data.
The best way is to invest in marketing and sales strategies, to reach out to potential clients or customers. This can generate returns during and after the crisis hits. Luckily, there are several recession-proof tools that can be used to fine tune your marketing and sales strategies to maximise output. These tools will help your business continue to find success, even during a downturn.
How can data analytics help?
Can technology tools like analytics and BI be applied to alleviate risk during a slowdown in sales? The answer is yes.
Analytics may not be able to exactly pinpoint when an economic shift might occur, but data can certainly help an organisation mitigate the impact of a recession by giving you the information to better target the right market, save money, and increase profits. Analytics can also pinpoint which products will do well in certain markets, so that a company can direct its energies to those specific areas.
During the great recession of 2008 analytics was brought into the forefront for enterprises as organisations tried their best to save money on operations and achieve efficiency.
Analytics can give an edge at the time of a slowdown
Analytics can help companies to estimate which parts of their solutions or services are most likely to prosper regardless of what the global economic circumstances are. Reports have even found that business intelligence and analytics tools will have the most significant impact on businesses profitability over the next few years.
When the peril of a recession occurs, businesses must analyse every source of revenue using data. From the prospects of revenue creation, companies can use analytics tools to gain insights on what has occurred. Based on which solutions and products are performing best in the market, companies can extend data mining and predictive analytics technology to discover cross-selling and up-selling opportunities as well as gain new sales possibilities.
Data analytics for decision making:
Decision making is an important part of navigating your way ahead in tough times. This is where you can turn to the most potent tool for decision making, which is data analytics. The adoption of a data-driven decision-making process does not only increase your confidence, it eliminates guesses and increases returns.
Data analytics has become a necessity in any organisation today. In surveys conducted, 49% of the companies surveyed say they are using data analytics now more than before the Covid-19 crisis. This is because companies realised they can ensure business growth, make accurate predictions in a time of uncertainty and achieve stability and navigate through the pandemics trickiest challenges, by leveraging insight from data through analytics.
There’s a plethora of data available which can minimise losses in an economic recession. Using data, companies can determine quickly how the recession has affected their buyers’ buying practices, and adjust their marketing and sales strategies quickly before significant damage is caused.
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