Have you ever been shopping online, and added something to your cart, but then
ultimately decided not to purchase it?
I know I have. I absolutely love cooking, and I like to shop online for
cookbooks, interesting spices, or maybe, even a new kitchen gadget, but
sometimes I change my mind before checking out, because I choose to save
the money instead, or I decide that the kitchen tools I already have will work
just fine for my recipe.
When that happens, the online store has what's called an abandoned cart, and
according to e-commerce platform, Shopify, online merchants lose $18
billion a year in sales revenue, because of card abandonment.
This is a big problem, but it's one that business intelligence professionals
are very skilled at solving, and this video will consider exactly how that
works. BI professionals can use data to identify where a customer came from,
whether a Google search, an email link, or maybe a social media post.
Then they can visualize the journey the shopper took when visiting the website,
they're even able to pinpoint exactly where that customer dropped off, and try
to figure out why. For example, a BI professional might create a tool to
monitor how quickly the website checkout page's loading.
If the team decides that it's taking too long, the company can dedicate
resources to improve website speed and hopefully keep that customer in the
future. The measure of a website page loading speed is an example of a metric.
A metric is a single quantifiable data point that is used to evaluate
performance. In BI, some of the most important metrics are KPIs, which you've
learned are quantifiable values, closely linked to business strategy that
tracks progress towards a goal.
Many people confuse KPIs and metrics, but they are different things.
The basic point to keep in mind is that metrics support KPIs and in turn, KPIs
support overall business objectives.
It's also helpful to understand that KPIs are strategic, whereas metrics are
tactical. Going back to our abandoned cart example, strong KPIs might be the
average value of each online transaction, customer retention, or
year-over-year sales.
Think of it this way, a strategy is a plan for achieving a goal, or arriving
at a desired future state.
It involves making and carrying out plans to reach what you're trying to
accomplish. A tactic is how you get there.
It's a method used to enable an accomplishment, including actions,
events, and activities.
Tactics take place along the way as part of your strategy to reach your
final objective, like stepping stones between each milestone, reach enough
milestones, and you'll reach your goal.
Understanding business objectives and what is needed in order to achieve them
is the first step in BI monitoring.
BI monitoring involves building and using hardware and software tools to
easily and rapidly analyze data, and enable stakeholders to make impactful
business decisions. So let's say our e-commerce merchant sets a goal to
decrease cart abandonment by 15% in six months, the BI professional would create
a tool that monitors web page loading speeds in order to help achieve that
KPI. Rapid monitoring means that the people using BI tools are receiving
live, or close to live data.
In this way, key decision makers know right away if there's a steep rise in
the number of abandoned carts, or if they run out of inventory on a popular
product, or if customer service representatives are receiving an
unusually high volume of calls.
Knowing right away means that the company can fix whatever the problem may
be as quickly as possible, and this is one of the main ways in which BI
professionals add real value to their organizations.
Later in this course, you'll learn more about how to select appropriate metrics,
but first, you're gonna work with Christine on preparing yourself for a
successful entry into the BI field.
Lots more to come.