How Can Small Businesses Develop A Sound Data Strategy?The good news: Your small company already “has” Big Data. The bad news: Small businesses are often so forward-looking that they just sit on their data. The challenge for both small and large businesses is having the internal capability to understand and interpret the information they already possess.
But what exactly is Big Data and what can it offer a small business? A recent article on the Forbes.com website defines Big Data in terms of difficulty, rather than size, calling it “any data that can’t easily be structured and queried using standard relational database techniques.” One goal is to tap this complex information to create better predictions of customer behavior and then use these customer insights to create products and services your clients want, generating additional revenue. A small business could use their sales data to determine that a particular style and color of product – say a white short-sleeved dress shirt – spikes in sales when parents buy them as school uniforms in late summer. They know to stock up on this product to prepare for the sales spike.
For small businesses, the key is to integrate their disparate data streams within a single analytics dashboard with website traffic and social media, payment processing, and customer contact management. Automatically gathering and combining this data allows a business to better analyze its entire customer engagement process.
Asking these three questions can help your small business develop a sound data strategy.
- What data do you already have and how are you using it? A lot of what businesses have is “operational data,” data that’s created for a specific need, such as customer order information found in a CRM system, what pages they’ve clicked on a website or emails that they’ve opened. SMBs need to have an employee who can understand what each data set is and how it’s being used. With a CRM system, for example, you’d want to know what data it captures, and more importantly, what that data means about a customer so you can use it to make better decisions for your business.
- What question, problem or hypothesis do you want to answer? People often interpret data the way they want to see it, which is dangerous. Taking a step back to look at the quality of your questions can help prevent misleading results.
- What cross-functionality can you use to gain useful answers? Even the most basic business website can report how many people visit, how many click a certain link and how many ultimately buy. If you can combine those numbers with data from an email marketing tool, such as Constant Contact, you’ll gain more valuable insights. Then you’ll be able to analyze the behaviors of much more specific customer segments to see what marketing campaigns resonate with them and what offers they responded to. This will help you focus your time and resources on the most effective campaigns.
In the end, most small businesses already “have” plenty of data. The challenge is knowing how to use that information to improve their business and continue growing their profits.
We appreciate your feedback! What advice would you offer to a small business that wants to start using all the data they collected to increase revenue? Let us know by posting in the comments section.
Source: Forbes.com, April 2013
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