How to Leverage Data In Your Small Business
As a small business owner struggling to make ends meet, if you don’t consider yourself a “numbers” person, the word “data” in your small business can be a little intimidating. The alternative, though, is more worrisome because if your decision-making process isn’t based on numbers, then you must be making them on something significantly more dangerous: assumptions.
Business data is simply the plain facts and statistics collected during the operations of a business. They are the metrics that relate to customer interaction. It can be the number of jobs, the number of enquiries, the income received, and the expenses incurred, amongst others. Small business data serves a plethora of purposes, and if employed right, can be used to measure/record a wide range of business activities – both internal and external.
The importance of data in your small business cannot be understated because it provides the foundation for every other information you would require in your business operations. To provide you with more context here, the amount of data in the world is growing so exponentially that by the time you finish reading this page, over 90 million texts will have been sent and received. Over 350,000 Instagram posts will have been uploaded, millions of calls will have been made, and some 21 million GB of traffic will have been received on the internet globally. Amazing, isn’t it?
The irony, according to this Forrester Research is that only 12% of companies are analyzing their existing data. The implication of this is that data for the other 88% of businesses; crucial data is getting wasted. In a way, these numbers explain why so few businesses get to the top of their niches or industries. I mean, imagine the intelligent social media marketing strategy and business decisions that could have made with this ignored data.
61% percent of companies say that big data drives revenue because it delivers deep insights into customer behaviour. With this valuable intelligence, you can delve deeper into the psyche of your customers to find out what consumers really think about your products. From consumer behaviour to predictive analytics, companies regularly capture, store, and analyse large amounts of quantitative and qualitative data on their consumer base every day.
Observing customer behaviour is important to trigger loyalty. As a small business owner, the more data you collect, the more patterns and trends your business can be able to identify. Imagine you could guess what customers purchase – and when and how. You don’t need to be a business with access to special equipment or tools to leverage the power of this knowledge. Even small businesses can utilise data in several important ways. Below are some of the best ways you can leverage data in your small business today:
1. Gain Deeper Insight into Your Audience
The better your understanding of your target audience, the easier it will be for you to market to them effectively. Every business should know the demographic of their target audience, as well as the demographics of those who are actually using their business. Data in your small business can give you vital insights on your target audience, their pain points, shopping behaviour, habits, how and where they prefer to shop, why they switch to competitors, what makes them refer businesses to others, and even what they’ll buy next.
CRM tools, like Microsoft Dynamics 365, track customer interactions and contact information, record service issues, and even manage marketing campaigns — all from one platform. It then pulls that data into an easily visible and accessible place, which is particularly beneficial for small businesses looking to do more with less. Gartner predicts that this year, businesses will spend more on CRM tools than on any other software.
The more data you are able to gather about your customers, the deeper your understanding of them will be. With the right data on your side, you can learn what makes your customers tick and thereby gain deeper insight into what they want from your business. With this information, your small business will be able to more accurately interact and engage with your customers.
For your small business, this will make it a whole lot easier for you to craft the sort of brand messaging that will resonate deeply with your target audience.
2. Refining Your Market Strategy
This should be a bit obvious, but I’ll reiterate it anyway: data in your small business will help you make better business decisions. The reason for this is simple: by helping your small businesses learn more about its customers and their purchasing behaviors, you are already understanding your customers’ needs and so you are bound to refine your market strategies to easily get to the right customer.
It can be overwhelming to gather and organise your data: you might not know where to start, or perhaps you’re worried about how much it will cost. Thankfully, there are several ways your small business can gather and analyze data without breaking the bank. Platforms like Google Analytics or IBM’s Watson Analytics can assist with gathering long-term data to reveal trends and other valuable information.
Also, all major social websites have an extensive database, where businesses can target their potential audience. All these are valuable data for your small business, and you can use this to your advantage by running Ad campaigns and creating sponsored stories. Features like Messenger stories are further adding more areas of advertising for small businesses to leverage big data and drive more customer engagement with their brands.
3. Analysing Your Competition Better
In today’s world, you can’t measure many meaningful business metrics without data, and as a small business owner, this includes checking out your competitors. Competition among small businesses can spur the invention of new or better products or more efficient processes. It can help businesses identify consumers’ needs and then develop new products or services to meet them, so you should pay attention to yours.
In the past, understanding your competition was limited to industry gossip or looking around rivals’ websites or shops. These days, you hardly need to leave your desk to find out what the competition is up to; financial data is readily available. Google Trends can offer insights into the popularity of a brand or product. Social media analysis can illustrate popularity (i.e. how often a company is mentioned) and show what customers are saying.
Facebook and Twitter are also particularly helpful places, and the information you gather can be compared with your brand to figure out how you can improve. For instance, does your competitor get more mentions on Twitter? How quickly do they respond to customer inquiries compared to your brand? How timeous are their ads, and how well are they received?
Remember that it’s also easy for your competitors to glean more information on your business than ever before. The best thing you can do is stay one step ahead by keeping up-to-date on the latest data technologies and how to use them better than your competitors.
4. Improving the Efficiency of Your Operations And Your Overall Business Model
In small business, there is a very strong correlation between efficiency and profitability. If your business, or even one individual component of your business, is being managed inefficiently, then you are inevitably going to be wasting time and money that you could put to much better use.
By identifying your key performance indicators and ensuring that you gather the relevant data for them, you can accurately measure the effectiveness of your current strategies and, if necessary, adjust them to improve your efficiency. You can understand what exactly works in the market, how long are customers using your product and figure out the aspects of your business operations that are inefficient.
By analysing the operational data, your small business has collated over the years, you can streamline your operations and make them more effective. You can optimise your stock-keeping based on predictions generated from social media data, web search trends and weather forecasts. This will, in turn, allow you to stock up on the most popular items, ensuring that you don’t miss out on sales and reducing the amount of unwanted stock lying around.
5. Better Recruitment
Data in your small business can help you find the most successful and best qualified candidates to fill in vacancies in your team. It will also help you identify the best recruitment channels and help you better engage existing employees.
This is because most employers already generate a wealth of HR-related data: absenteeism figures, productivity data, personal development reviews, and staff satisfaction data. The implication of this is that your small business in need of better talent can now access a lot of data that wasn’t available before: data from recruitment sites, information from sensors in ID badges, social media data, etc. All this information can be analysed to gain insights that were never available before and help you hire the best team members for your budding business brand.
Conclusion
If your small business is not taking advantage of big data, please understand that it is time for it to jump right in. The power of data in your small business is simply far too great to ignore. Business data provides valuable insights and can be crucial to reach potential customers without expanding your marketing budget. The best news here is that you don’t even need a large budget to start as a small business owner.
You can start today by compiling useful information about your potential customers using various online tools. The data you need is already freely available online. All it takes is a little time, some effort and a deep-seated willingness to find what your business needs.
