In order to both acquire and retain customers, it is integral that businesses harness the insights of their customer data in order to make precise business decisions. This process is commonly regarded as data monetisation. In today’s society, however, possessing only one or two sources of revenue is sometimes not enough to support a fully fledged business. It is thus important that your business uses data analytics to expand its niche by providing new services, which will ultimately result in increased streams of revenue as well as funds. In this blog, we will discuss the importance of generating new revenue streams through data analytics and some steps you can take to perform this.
Importance of Generating New Revenue Streams
All businesses have one primary goal: to increase profits. When increasing profits, a business needs to not only focus on building up their existing model, but also on generating new revenue streams to grow the business and increase the company's overall sales. Having various streams of revenue will allow your company to broaden its target audience in order to attract more customers, as well as influence old customers to continue utilising your services.
Importance of BI and Analytics Team
The first step — rather prerequisite — to approaching this process is developing a strong BI and analytics team to serve as the foundation for your new revenue streams. In a data-driven business environment, it’s increasingly vital to harness the power of data to develop actionable insights and make the best decisions. As a result, BI and analytics teams are important for empowering everyone to explore data and use analytic apps to take data-driven actions, wherever they are within an organisation. An advanced BI and analytics platform is an essential tool for these teams to integrate data insights into workflows with analytic apps and technology such as AI and Natural Language Processing. These technologies enable businesses to make associations between all kinds and sources of data and accelerate an understanding of the data that leads to better outcomes. Providing users with these capabilities, coupled with smarter and more efficient data modeling, means that BI and Analytics teams play a more prominent role than ever in enabling their organisations to generate new value and new revenue for their customers with analytics products and services.
Once your business has attained a sufficient BI and analytics platform, you are free to move on to some more practical methods to creating new streams of revenue. Outlined below are two possible methods that you can try incorporating into your business:
- Start a Business Blog:
One possible way to generate a new revenue stream for your business is through the creation of a business blog, like the one you are reading right now. You can use this blog to create a passive income stream for your business by selling advertising or by promoting affiliate products. A blog offers customers valuable information, while also providing your business with a new revenue stream through ad platforms. Not to mention, a blog also helps to boost your website’s SEO quality by positioning your website as a relevant answer to your customers' questions — thus further increasing revenue. Data analytics and several on-page SEO tactics can be used to do this.
- Increase Customer Base:
Another strategy to create a new revenue stream for your business is to create a strong customer rapport. In small business situations, companies quickly reach the highest revenue limits from their existing customer base. For longevity, these existing customers are very important to your business model. However, it is also essential that you grow your customer base to increase your overall revenue. Data analytics, communication, and marketing play an essential role in increasing your company's customer base. It is important to analyse your customer’s purchasing habits and directly ask customers what specifically they are looking for; this can spark fresh ideas for your company for new possible products or services.
Risks Associated with Multiple Revenue Streams
Although increasing the number of revenue streams within your business does have the potential to drastically increase the success of your business, there are also a number of risks that can pose an issue as well. According to Roger James Hamilton, founder of the Entrepreneurs Institute, “starting many streams at the same time is like trying to push many balls up a hill at the same time: you may get started, but you end up losing your focus and your time [...] success comes from growing teams, not streams: multiple teams of income”.
Having many revenue streams leads to your company’s niche to grow drastically as well. With too broad a niche, your business runs the risk of facing too much competition, meaning that prospective consumers are likely to overlook your product or service. To account for having a broad niche, your company would be forced to prioritise its marketing campaign, which could consequently detract from other important business operations.
To conclude, data analytics is a powerful tool that, if used effectively, can be used to boost company revenues through the creation of new revenue streams. Although there are a number of risks associated with expanding your niche, having multiple streams of revenue places your company in a better position to survive during the inevitable obstacles that arise when running a business in a competitive environment. If the methods highlighted above are not helpful in their attempt to generate new revenue streams, at the very least, your business should prioritise the development of a strong BI and analytics team to serve as the foundation for your new revenue streams.
About the author: Mark Roychowdhury is a Copywriter Intern at ei² niche consulting for #data #insights #performance www.eisquare.co.uk
Editor: Aleksandra Pavlovic