The great thing about small businesses is their intimate appeal and unique nature. Without the little guys, the business world and the products and services it delivers would be homogenized and dull.
But enterprises are constantly looking at ways to dominate the market. One of those ways is through analyzing and monetizing the huge amounts of data generated by consumers. This may seem like the exclusive realm of data scientists and a billion-dollar industry. It’s not. Now, because of advanced technology, your small business can use big data to its advantage.
Your data strategy
There are really two ways of looking at mining data. You can take the spreadsheets, the files of past data, and study them for trends. And, you can analyze data as they come in.
What are you doing this for? In order to integrate customer data into your business decisions. It’s an iterative process, which means it’s ongoing, evolving with the customer. Software such as Net Promoter’s Satmetrix uses the continuum of data to predict customer decisions. It culls the data related to customer satisfaction and loyalty, using patterns to make predictions. You can then use these predictions to determine things like inventory needs, marketing tactics, product modifications, staffing, etc.
This is a form of listening. It’s a kind of conversation. Small businesses can be more flexible and agile than enterprises, which makes them well-equipped to adapt to what they hear. But in order for the conversation to be effective, you need to know what problem(s) you’re trying to solve.
Problems and solutions
A problem you may come up against is in managing your supply chain. On one end, there’s the relationship you have with your suppliers. Square’s guide on how to manage suppliers recommends being efficient, using tools to organize and automate data related to supply. That way, the relationship with suppliers is frictionless. Inventory management software can help you keep track of inventory data and even automate orders.
You may spend more time thinking about supply than you actually need to. Analytics software allows you to think ahead, predicting when there will be a spike in demand. This frees up your mind for more high-level decision-making.
Customer-facing, there’s the matter of optimizing sales based on demand. In North Carolina, Twiddy & Company Realtors had a lot of operational data involving vacation rentals but didn’t know what to do with the data. They needed to be able to optimize the rental process for both the homeowners and the renters.
Twiddy & Company decided to try business analytics tools from SAS. The tools processed rental data, analyzing it for trends and delivering insights. Through this, the realtors can now give homeowners pricing recommendations based on a variety of variables. Everything from the time of year, size and location of the home, market conditions—all these factors and more come into play in determining the price.
It may seem like this benefits the homeowners more than the vacationers. But instead of just having a number of homes and dates to choose from, vacationers now have more options in terms of pricing.
Overall, analytics helped Twiddy & Company increase the number of homes they manage by 10 percent in three years, and cut costs by 15 percent in one year.
Supply management is only part of the big data picture. There’s still the matter of marketing and customer retention.
Big data and marketing
Do you have a website? At its very core, Google Analytics is a tool for understanding site traffic in order to improve marketing efforts.
Google Analytics tells you where traffic is coming from. It takes the data and delivers them in charts you can understand. You’ll be able to see how many people are stopping by through organic search, for one. If you’re getting a lot of visitors because your keywords are ranking well in Google’s SERP (Search Engine Results Page), that’s a sign you’re doing well with the information you have on the site—you’re doing well with your site’s user experience.
If you’re getting a lot of direct hits that means you’re getting direct referrals. People are stopping in because they already know about you. Then there are indirect referrals, which happen when someone clicks on a link to your site. There’s traffic generated by social media, emails, paid search—of course, this all depends on what type of digital marketing you’re already doing.
Basically, Google Analytics uses data to tell you what’s working and what’s not. You can then modify your marketing based on the insights.
Google Analytics is on the DIY end of data analytics. There are other solutions that do more and make understanding data easier. Among these, Kissmetrics specializes in marketing. It lets you drill down and make decisions based on customer (or website visitor) behavior. InsightSquared integrates with other software you may use, such as Quickbooks. Canopy Labs specializes in customer data analysis to guide marketing campaigns.
Finally, the next phase of using big data for your business revolves around retaining customers.
Big data and customer retention
Customer Relationship Management (CRM) software is all about tapping into customer data to, well, manage those relationships. CRM solutions for small business include Salesforce, Insightly, and Zoho.
The great thing about CRM is it makes you look differently at customer retention. It’s proactive. You’re not just sitting back and offering your same old product or service. For example, Insightly works with the majority of social media platforms while providing contact management. This enables you to find out honest customer opinions when they mention you. Zoho offers a 360-view, which is a synopsis of important information. Salesforce specializes in using existing contacts to generate leads and make sales.
You can use CRM to:
- Ramp up email marketing
- Create personalized offers to customers
- Identify trouble spots in operations
- Offer advanced customer support through knowledge of customer data
- Come up with new features and products
- Decide on a new store location by analyzing customer location data
- Earn back customers who’ve drifted away
All the possibilities explain why CRM has become more and more popular with small businesses, SMBs, and enterprises over the last several years.
The full picture
You can use data to benefit every facet of your business, internal and external. It just depends on how much you want to invest in technology, automation, and growth. Consider focusing on a single problem you’d like to solve. Then, look into how you can use data related to the problem to solve it.