Every day and each moment, businesses have to make innumerable decisions. According to various sources on the internet, it is estimated that an adult human mind makes about 35,000 remotely conscious decisions each day. However, if these decisions were directly proportional to your business success, would you take the risk of making a big decision based on your instincts or take help with trend analysis?
“Intuition is an erratic and unreliable guide that can likely lead to misfortune as to success.”
You must have heard ‘data is the new oil.’ However, data is only valuable if used to create an impact on your business that fuels success. And hence, this is where trend analysis comes into the picture. Through trend analysis, one can predict the future and capture potential opportunities for a company.
Why is trend analysis important?
Understanding, tracking, and predicting consumer behavior
One of the imperatives of trend analysis is decoding what the consumer wants. Using past data on consumer behaviors such as the purchases made, net promoter score, churn rate, etc. can help you predict consumer behavior, customer preferences, and audience reactions to your service.
As a global business transformation firm, we at Pulse have helped multiple businesses transform successfully by truly listening to customer experiences and predicting their behavior to make the right moves.
Through our state of the art technology, Pulse helps build checklists and transform concerns into actions in minutes. Click here to know more.
Making strategic decisions
The challenging time that we are operating in, where no one, at least in this generation, has faced a crisis of this intensity, making decisions just by a gut feeling would harm the business exponentially. Trend analysis can help you make decisions that are well informed and can positively impact the aftermath of the decision you take- for example, if due to lockdown, you had to shut down your operations. If you are wondering if it is the right time to start your operations, you can benchmark data on the companies that have started their operations, what challenges they are facing, and accordingly set your strategy of reopening the business.
Continuous and consistent performance
Trend analysis allows you to acknowledge both negative and positive trends, which enable you to determine what strategies and services are performing well and use that knowledge to shape future strategies. This expands the company’s vision of sustaining success and profits over time.
To stand out from your competitions.
Trend analysis helps you benchmark your practices with that of the industry’s best and your competitors and give you information on the opportunity areas and the areas where you can make improvements.
How to conduct trend analysis: A checklist
Now that you have understood the importance of trend analysis, here are some critical steps to conducting a trend analysis:
Know what you want to analyze
The good news is you can analyze any trend. However, be clear which trend you want to analyze and why. A lot of times, we end up analyzing data that might not be useful in making decisions. A clear understanding of the purpose of trend analysis is critical.
Select the methods and metrics
Generally, there are three methods to conduct trend analysis – qualitative methods, time series analysis, and causal models. The qualitative method uses data, such as expert views, secondary information available publicly, etc. This method is normally used when data is limited, such as launching a new product. Time series analysis is based on historical data as it relies on patterns and fluctuating patterns to identify trends.
Key performance indicators (KPIs)
Make a good starting point for regular trend analysis. A KPI is a quantifiable value that establishes the effectiveness of a company in achieving business goals. Taking an example of a company that wants to analyze its customer experience, some of the KPIs that the company can select are:
- Customer acquisition rate
- Conversion rate
- Customer retention
- Customer churn rate
- Net promoter score
- Customer satisfaction
- Average resolution time, etc.
Be consistent with the frequency of analysis.
Trend analysis is not a one-time activity. To impact your business, one has to be consistent with the activity to get meaningful insights from the data. Set a timeline between six months to a year and follow the same metrics as an analysis point.
A real commitment to business means undertaking regular audits and inspecting the trends that influence your business ecosystem.
While conducting trend analysis, auditing, and inspecting data to make business decisions might sound a little overwhelming. However, with the advancement in technology, some apps offer a real-time analysis that not only saves time but can help you make actionable efforts at the right time. At RedQuanta, we offer a self-audit app that lets your employees conduct audits and notifies all stakeholders in real-time.
Accelerate the success of your company by making trend analysis a key practice.
To know more about how we can help you analyze trends for your business, click here to contact us.