Business Statistics in Practice

Monitoring business statistics in practice is important as the data will give the business important info and guidelines in order to success. Doing business without monitoring the statistics is like driving a car without caring about speedometer or odometer or any figures that tells you the surrounding conditions.

What are the main reasons for a business to study and monitor the statistics? Is there any example that could illustrate how statistics and actions taken based on stats data will make huge different and progress to businesses?

Important of Business Statistics in Practice

When you are planning on a tour or travel trip, you must first know where you want to go and how are you going to reach there. During the journey, you have a lot of guides and observations to make so you are not lost according to your trip planning.

It’s the same in business. In business, statistics are one of the important indication on the condition of your business, be it before you start your business, running the business, or planning to sell or close the business.

Let’s look at the main reasons for having business statistics on hand.

Top 3 Reasons Why Business Statistics in Practice is Important

1. A Clear Picture of the Business Environment
“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy,for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” ~Sun Tzu Art of War

It’s the same in business. It’s always better to start survey and know the market condition about supply and demand, do a business SWOT analysis, before you commit into any business. An investment or research into getting important management info about the business you are about to venture in before you commit to running the business will save you a lot of effort and money rather than just pump in money and run the business without knowing clearly how the market condition is.

2. Act Upon Market Condition
- How has the client behave during the past 3 months?
- Is the economic condition of the broad market affecting the business revenue?
- How is the promotional effectiveness of your marketing campaign?
- Is your branding strategies achieve its target?
- What is the growth rate of your business?
- Will your business condition meet your target setting?
All above mentioned questions are highly related to management decision making. Any changes in the market condition and how fast the business could react based on statistics gathered will determine the business’ competitive advantage over its competitors.

3. Future Trend Analysis
With reliable statistics on hand, the business could be:
* staying ahead of the competition by analyzing how the consumers behave,
* analyze what could be expected in the near future
* decide how to put business resources to its most effective use in order to capture the market trend

By having stats and data that the competitors don’t have (for example your customers’ purchasing pattern, preferences etc), you could be rake in huge profits that your competitors will only be able to dream of.

Let’s look at a simple business statistics in practice in the next section.

Example of Business Statistics in Practice

Let’s look at the table as shown from the promotional effectiveness article:

What the business could have at first may be just situation (1) of the table.

With these data, the management could be asking themselves questions such as:
1. What if I want to increase the revenue by 100%?
2. Is there any way to increase the numbers of prospects?
3. Is the conversion rate at industry average? Could I be doing better than that? If so, how?
4. How could I increase the number of purchase (purchase frequency) of my clients? Is there any cross selling opportunities? How about up-selling to existing clients?
5. What are the resources I have to act if I want to increase each section by 50%?

As you can see, an increase of 50% in each section will give a result of +500% in revenue!

The above example may be an over simplified business statistics in practice, but it is the basic concepts for you to understand one of the very important element of business.

If you want to study further, you may check out Business Statistics in Practice Online Learning Center

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