5 Ways To Make Good Use of Diagnostic Analytics

Today’s business climate is fiercely competitive. Organizations need every advantage they can get. Data is one powerful asset—when properly analyzed and understood.

A San Diego analytics agency can help your business get the insights you seek. Analytics look beyond basic reports to answer why things happen. It can reveal why sales are decreasing or complaints are increasing through the data at your fingertips.

This article helps you better understand this analytical approach, covering the following points:

• Definition of diagnostic analytics
• How it compares with other analytics approaches
• Real-world examples of how to employ diagnostics
• Five key ways organizations apply diagnostic insights for better decision-making

Learn how to use diagnostic analytics to turn confusing data into clear insights for your business. Let’s go!

What Is Diagnostic Analytics?

Big data gives companies new ways to get value from information. It can reveal the most salable product, the best-performing marketing strategy, or high-value customer segments. 

However, data is useless unless analyzed accurately and promptly. Various analytic frameworks structure the information to learn as much as possible. Some of these frameworks include:

In other words:

• Descriptive analytics asks “What happened?”
• Diagnostic analytics asks “Why did this happen?”
• Predictive analytics asks “What could happen?”
• Prescriptive analytics asks “What should we do?”

The analytics team chooses the best approach for each business question and situation. Here is an example: 

Seaside Urgent Care is a busy La Jolla clinic providing walk-in care to residents and workers. The owner, Dr. Jansen, has recently noticed a dip in patient visits, revenue, and patient satisfaction scores. He reaches out to a San Diego analytics agency, whose analyses uncover the following:

• Descriptive analytics confirm patient volume is down by 6%. The healthcare facility’s revenue declined by 8% over the past quarter compared to last year. Patient satisfaction surveys also show lower scores for wait times.
• Diagnostic analysis explains that these “dips” started a few weeks after a large competitor, ExpressCare, opened two miles away. It suggests that this rival accepts more insurance plans and advertises faster wait times with more on-duty physicians. Many patients chose ExpressCare instead due to insurance coverage and convenience.
• Predictive analytics estimates that Seaside’s patient volume could fall up to 15% year-over-year if ExpressCare expands its neighborhood locations.
• Prescriptive analytics recommends that Seaside contract with additional insurers. It should also highlight specialized services, extend hours, and improve patient communications to regain market share.

The right analytics allow Dr. Jansen to pinpoint the effect of a new competitor on his business’s revenue and customer satisfaction. It also offers actionable insights to move forward.

Five Ways Businesses Use Diagnostic Analytics

Diagnostic analytics is a powerful tool, and a San Diego analytics agency can help put it to use in the following ways: 

   1. Identify Areas for Improvement 

Diagnostic analytics help spot problems in different business areas. These include marketing, customer service, production, and sales. Studying the information shows where your organization needs work.

For example, a North Park fitness studio sees fewer people renewing gym memberships. The owner uses diagnostic analytics with their customer data. He learns that class cancellations jumped over the summer, frustrating customers. This led many to discontinue their memberships.  

Armed with this knowledge, he modifies the gym’s class schedules. He also contacts dormant customers with incentives to return.

Diagnostic analytics can also: 

• Evaluate marketing performance. 
• Find pain points along the customer journey to enhance their experience.
• Conduct A/B tests on products, pages, and processes to determine the best.
• Identify service complaints and fix them.
• Detect equipment failures before they happen.
• Spot sales process bottlenecks to boost revenues.

Diagnostic analytics helps San Diego businesses take meaningful action to improve themselves. It raises their efficiency, productivity, and cash flow, all promoting better growth.

   2. Drill Down on Root Causes

Persistent problems often do not vanish without action. Diagnostic analytics helps you avoid them by getting deeper into the root cause.

To do this, it studies the relationships between variables through different methods. These include understanding their correlation and causation:

• Correlation is when two events happen simultaneously or linearly. 
• Causation explains how one factor affects another. 

These two concepts vary. Just because two variables are correlated does not imply they have a cause-and-effect relationship. 

Consider a Balboa Park hostel that notices its 2023 summer occupancy rate is lower than the previous year. Because the season was brutal, it initially assumed that the scorching heat deterred guests from booking. However, a deeper analysis concludes that the accommodation charged more than its competitors. 

If the hostel had not analyzed the root cause of the revenue decline, it would have missed the chance to reclaim profits the following year. 

   3. Inform Strategy Changes

Blackberry did not lose to Apple and Samsung because it did not launch a touchscreen first. It failed because it knew its competitors’ steps and did nothing. The company realized its mistake too late– diagnostic analytics could have helped avoid this.

Diagnostic analytics benefits shine when they lead to positive changes. Based on our example above, the Balboa Park hostel immediately revised its 2024 summer plans to include the following:

• Implement dynamic pricing that lowers rates on sweltering days.
• Promote the accommodation’s superior amenities to emphasize added value.
• Offer summer discounts on upgrades. 
• Determine possible savings from variable expenses, such as housekeeping and food, to support these pricing strategies.

Overall, the analytical approach’s insights allow leaders to optimize plans, resources, and processes for the future.

   4. Continuously Monitor Performance 

The full benefit of diagnostic analytics comes from using it regularly. Frequently analyzing the impact of changes allows quick adjustments as conditions shift. 

Consider these checkpoints:

• Scheduling automatic diagnostic reports weekly integrates the insights into normal planning meetings
• Building custom dashboards allows teams to view real-time data for faster decisions
• Enabling easy access to data improves departmental collaboration

Ongoing data intelligence equips companies with tangible and intangible tools to handle uncertainties better. 

   5. Automate Reporting

The last thing you want to happen to your business is to be the next Blackberry. Avoid committing the same mistakes by making actionable insights available in real time. This is where automation helps.

With innovations such as artificial intelligence and machine learning, you can achieve the following: 

• Schedule automatic diagnostic reports to run daily, weekly, and monthly.
• Build custom dashboards to meet the information needs of each team and role.
• Set up notifications when key metrics hit thresholds.
• Integrate diagnostic analysis into normal workflows and processes behind the scenes.
• Use chatbots so people can ask questions about data in plain language and get answers.
•  Design clear charts and visuals optimized for the data type, trends, comparisons, metrics, etc. 

Automation brings diagnostic insights to everyone’s fingertips. This enables data-informed decision-making to become a habit. 

Summing Up

In data analytics, knowing the “why” is just as valuable as the “what.” After all, it leads you to the “hows.” These are the most essential steps to maximize opportunities and fix problems. 

This article highlights five ways to use diagnostic analytics to run a more cost-effective business. If you need more technical support, work with a San Diego analytics agency specializing in your niche. Contact Digital Authority Partners (DAP) for a free consultation.