3 Ways Business Analytics Can Help Franchises Increase Profitability
Today’s businesses generate massive quantities of sales and customer data. They are also prone to utilising some external sources of data including social media and trackable display advertising. Franchise owners and executives can feed their resulting data into predictive analytics software to get actionable insights into the status of the business. The following are 3 possible ways to improve profitability for a franchise business by making use of business analytics and data:
1. Get a Clearer Picture of the Business
Without taking the time to collate and analyse patterns in data, business owners will likely be overlooking important details about their businesses. For example, data can reveal demographic details that a company’s customers may have in common; this, in turn, could empower the company’s executives to increase their marketing productivity.
2. Mitigate Risks
Many businesses are using data to identify risks and reduce or eliminate them.
Most frequently, data is being used as a means to facilitate fraud protection for businesses. Fraudulent transactions tend to differ from satisfactory transactions in multiple ways; and, once the patterns for each outcome are established using existing data, business executives can identify the fraudulent transactions in time to prevent them from being completed.
Businesses can also use predictive analytics and historical data to identify customers who are in danger of closing their accounts. This sort of predictive ability is particularly valuable for franchises such as fitness centres who sell based on a subscription model. If at-risk customers can be identified before their business is lost, an account retention team can be employed to try to retain their business.
3. Make More Profitable Business Decisions
When a business collects enough data, patterns in the data tend to emerge that can be used to refine business strategy and make better decisions.
For example, in one case, a team of executives decided to review data surrounding their company’s returns. Their data revealed that some customers were making purchases on Saturdays in the early morning hours between one a.m. and three a.m, and that these purchases were consistently being returned later. In contrast, purchases made during normal business hours were far less likely to be returned.
The executives, upon discussing the situation, made an educated guess that perhaps their customers were completing purchases after having indulged in a drinking binge at the bars – then later regretting the purchases made whilst drunk. They decided to test taking their website down for maintenance on Saturday mornings between one and three a.m. to see if that could discourage drunken purchases that resulted in unprofitable returns for the company.
Collaboration Is Key to Getting the Best Results When Utilising Franchise Business Data
To make the best use of the data in a franchise situation, it can be beneficial for franchisees and franchisors to collaborate. If each franchisee makes its data available to the franchisor, the franchisor is best positioned to collate the data, analyse it and share all the relevant observations with the franchisees. This can work to everyone’s mutual benefit.
However, this sort of collaboration isn’t strictly necessary for business analytics to be of value. If the franchisor isn’t already utilising analytics, individual franchisees can still leverage these strategies for the benefit of their own franchise.
Where Franchisees Can Learn More About Business Analytics
There are multiple avenues that franchise owners and executives can use to obtain more information about business analytics. If possible, it is helpful to take an in-depth online course in business analytics. There are also many worthwhile articles and resources available on the web, including the following:
- How to Use Data Analytics to Better Understand Your Business
- The 10 Best Data Analytics and BI Platforms in 2020