Reporting and analytics can help make data-driven decisions and improve your digital marketing performance. In this article, you’ll learn what’s the difference between reporting and analytics, what analytics & reporting tools to use, and what solutions they could provide to your business.
Analytics vs Reporting: What’s the Difference?
Let’s briefly discuss the difference between analytics and reporting.
First of all, analytics means the interpretation of data, while reporting is a visual representation of data. Analytics can be described as “recommendations”; reporting organizes and sums up the data.
One more difference is that reporting shows you the situation, while analytics helps understand why it’s happening.
Now that you know the difference between analytics and reporting, we can discuss the solutions and tools.
Why Do We Care About Reporting and Analytics?
Reporting and analytics help you find out:
- What results to expect from email marketing and other campaigns: reporting and analytics provide detailed forecasts for your unique situation;
- What the sales and profit dynamic will be if you don’t change anything in your marketing strategy;
- Which channels work well and which ones just waste your money;
- How often customers buy, what sums they spend, and what offers would benefit both sides;
- What should be changed to grow profit.
Data Sources & Tools for Analytics and Reporting
There are several types of tools and data sources that can be used for analytics and reporting:
- analytics tools: for example, Google Analytics, KISSmetrics, and others.
- ESPs and MAPs: Mailchimp, Klaviyo, ActiveCampaign, etc.
- ads management platforms: Facebook ads, Google Adwords, LinkedIn ads, and so on.
- social media: Facebook, Instagram, LinkedIn, YouTube, etc.
- CRM software: Magento, Pipedrive, HubSpot, and so on.
- other data sources: fiscal systems, accounting tools, and other platforms that support API/OData/HTTP/FTP, and others.
Analysts gather the data from the sources above and create detailed reports for further analysis with the following software:
- data visualization tools: such as Microsoft Excel, Tableau, etc.
- dashboarding tools: for example, Power BI.
Why Reporting is Necessary for Business Growth
Reporting helps you analyze your marketing channels and sales and gather all the data in one place. Let’s understand the value of reporting and the reporting methods.
Understanding the Value of Reporting for Your Business
With the help of reporting tools, you can create a detailed report with the data from every marketing & sales channel, for example:
- email service provider or marketing automation platform;
- CRM software;
- analytics system;
- telephony, etc.
Here’re just three reasons why business reports are helpful:
- you quickly understand whether the dynamics of your sales is positive and whether you have a good marketing ROI;
- you can see the statistics in all your marketing channels just in a few minutes;
- reports make your metrics easy to understand, so you can quickly make decisions and adjust the strategy.
Dashboard as a Perfect Reporting Method
At our agency, we love doing reports with the help of Power BI dashboards: it’s the most convenient way to represent the data and track them online. One can create dashboards to monitor any marketing channel.
For example, if you want to understand whether your email marketing campaigns are effective, we can create a dashboard with all your email marketing data: clicks, spam complaints, conversions, etc.
Dashboards help you answer the following questions:
- which marketing campaigns work well and which don’t;
- how to develop your email channel to gain more profit;
- what’s missing in your marketing strategy, whether you need to use additional marketing channels;
- whether you should invest in some marketing channels and what results to expect.
Business Analytics: Methods and Value for the Business
Unlike reporting tools that gather and organize the data, business analytics methods analyze it and help you understand whether your company is successful or not.
Understanding Methods of Analytics
There are several analytics methods that can be helpful in business development.
Analytics processes the data
Analytics tools process the data gathered in reports. Quite often, analysts use BI (Business Intelligence) systems and APIs to track real-time data. This analytics method is very close to reporting.
Analytics searches for patterns and deviations
Analysts study the data, create statistics, and make predictions. They conduct the analysis using special algorights or ready-made templates. These algorithms help identify:
- which products or services are popular, what should always be in stock, and how much it should cost.
- possible risks that can decrease the profit and revenue of the company. The algorithms also suggest solutions that would help avoid these risks.
- future customer behavior. It is possible because of the data on previous purchases, customer behavior, and their interactions with the company.
- which factors directly influence the revenue. These factors should be closely monitored by the company because if they change, there’s a risk of losing money.
- difference between the actual and planned sales. First, the algorithms help identify the reason; then, the company eliminates it.
Analytics & Reporting Solutions for Business
Let’s look at the most useful and popular ways to solve business issues using analytics and reporting methods.
Target Audience Analysis
Your target audience is a group of people who are likely to get interested in your products or services and eventually buy them.
When we analyze the target audience, we should understand who would find our products or services interesting. That’s why we need to study the purchase history, analyze user activity on the website, or survey customers.
As a result, a company can identify the customers’ motivations to buy, which helps create ads and build a product assortment strategy.
Audience & Customer Segmentation
Customer segmentation means dividing customers into groups. You can divide them according to different criteria, such as:
- common features;
- a type of product they often buy;
- customer loyalty;
- a situation when they buy: e.g., the beginning of a sale, renewal of the assortment, a particular season, etc.;
- distribution channel: for example, offline or online stores.
Segmentation is used in analytics to create personalized ad campaigns, identify concerns of particular groups of people, and create content and offers for each segment.
RFM analysis is a special analytics method that segments the customers according to the following parameters:
- the recency of the last purchase;
- number of purchases;
- purchase value.
In the end, RFM analysis gives us groups: for example, a group of customers who have recently bought something or customers who haven’t bought anything for a while. Then, a company can create different marketing strategies for different RFM segments.
Lifetime Value or LTV is a metric that shows you how much money a client brought to the company for the whole time. Thus, LTV can be the basis for analysis.
Analysts use this analytics method to forecast future revenue and expenses on business development.
There are several methods of sales analytics:
- analyze the sales dynamics. This method helps you compare the sales during different periods. Thus, you can identify the repeating patterns and create a strategy for sales growth: e.g., hire more managers, launch a new ads campaign, etc.
- plan-fact analysis. Analysts compare the planned metrics with the actual ones and if they see inconsistencies, they search for errors in the strategy or its implementation.
- ABC analysis. This type of analysis is based on the classification of items according to the revenue they bring. Thus, analysts can identify the products that bring the maximum and the minimum revenue. This data can help adjust the assortment to customers’ needs: launch sales and special offers, order more popular items and keep them in stock.
- Factor analysis. This analysis identifies the factors that influence the sales rate, prime cost, supply, assortment, etc.
Marketing analysis means analyzing the data acquired via marketing tools: loyalty programs, ads, and campaigns.
Marketing analysis lets you study the marketing trends and factors that influence demand.
Marketing analysis may include the following types of research:
- research of the market: one studies the supply and demand;
- research of the company: one analyzes the employees and sales scripts;
- research of competitors’ marketing activities.
Competitive analysis lets you study competitors’ assortment, pricing policy, website, social media, strengths, and weaknesses. Competitive analysis helps you:
- understand which competitors offer similar items and services. Next, one changes the assortment to offer customers something valuable.
- study competitors’ market share. Instead of fighting with competitors for the audience, you can just find a vacant niche.
- see competitors’ special offers and sales and adjust your own offers.
- have a look at similar companies’ strategies and get inspired.
Reporting and analytics are crucial for your business development. The main difference between reporting and analytics is that reporting means gathering and organizing the data, while analytics means understanding the data and forecasting. Reporting and analytics are closely connected and often cannot function without one another.
We conduct reporting with the help of Google Sheets, Power BI, and similar tools: the data are organized into neat tables and dashboards and further analyzed with special analytics methods.
Some of the most useful analytics practices are:
- target audience analysis;
- customer segmentation;
- RFM analysis;
- LTV calculation;
- sales analysis;
- competitive analysis;
- marketing analysis.