There’s a lot of talk about data, and how growing businesses are using it to better understand their customers, understand trends, and make decisions that lead to future growth and profitability.
The vast majority of these discussions revolve around larger companies. As a result, small business owners can struggle to understand how they can use data to their advantage.
Many also deal with a host of perceived limitations when it comes to their ability to access big data, analyze it, and apply the results of their findings. The average small business doesn’t staff data analysts or have the ability to store huge repositories of information.
In spite of this, data isn’t only the domain of major corporations. Not only can you make data work for your small business, it’s imperative that you start doing so now.
First Steps: Collecting and Analyzing Data
Before you can make data work, you have to get data. It’s possible to gather quite a bit of information simply by doing business. We call this transactional data. It includes customer purchase histories, payments, purchase locations etc. This information is often found in CRM records, and in files built by point of sale systems. It’s also possible to collect data through customer surveys, quizzes, and polls.
That’s just one source. You can also collect data from website analytics, customer loyalty programs, and marketing analytics. There are also external data sets to which access may be free or available for sale.
Of course, having data is only the first step. Next, you need to clean and analyze your data to make it useful. In its original form, the storage and organization of most of this information is useful for operational purposes, but not for what you need. Now it has to be ‘massaged’ so that you can make your data work for analysis. Fortunately, there are several tools for this purpose. Many of these tools come with dashboards or have other reporting features that present data in a more useful way. You can then use this information for:
- Past trends analysis
- Financial forecasting
- Creating marketing strategies
- Identifying areas of improvement
Using Data to Your Advantage
Once you have the tools and methodologies in place for collecting data, storing it, and reporting on it, you can decide on the best ways to use the information you have. Here are a few suggestions to make data work for your small business.
Data can give you plenty of insights into your products and services. You can learn what is selling best, when, and where. You’ll see which products or features are receiving the most praise, and which are causing the most frustration. You can even learn which improvements and new features customers are requesting more than others. To gather this information, look to customer support records, sales records, and reputation analysis data.
You can even gain insights by determining which blog posts, videos, and other content are receiving the most attention. For example, imagine that more than 20% of your customer support calls are about one particular product, and instructional videos relating to that product are receiving more than their fair share of views. It’s not too difficult to discern that you can make improvements there.
With data, you can learn quite a bit about your customers, and their journey through the sales funnel. You can source this information from website analytics, customer feedback, and social media data. This information will help you to understand how people are learning about your business, how they are navigating your website, whether or not your social media content is resonating with them, and what’s motivating them to convert.
Armed with this information, you can make data work to identify points of friction, and pinpoint opportunities to deliver the kind of user experiences that your competitors aren’t. Not only can you use data to improve your customer experience online, you can use it throughout every possible channel.
Developing More Effective Marketing Campaigns
When big data becomes big news, the stories often revolve around marketing. With the right information, you can understand customers’ behaviors, preferences, values, and so much more. You can also identify common traits and purchasing behaviors. Even location data can be extraordinarily useful.
Jaclyn Davis, a content writer at Trust my Paper has seen data analysis play a big role in the creation of marketing content. She says, “Website and social media data provides information that can be used for blog topic selection, developing social media engagement strategies, even curating social media content.”
Once you have this information you can make data work to create customer segments that are more accurate, then build targeted marketing campaigns that are more effective than ever.
Improving Daily Operations
Small business owners face a variety of operational challenges on a daily basis. They must ensure that they have adequate staff on hand and that their products are in plentiful supply without overbuying. Make data work for you to accommodate customer demand at any given time and ensure your prices are on the mark.
This is where properly massaged historical data comes into play. By analyzing this data, you can identify certain trends and then make operational decisions that ensure you are able to run your business smoothly, no matter what challenges you face.
Reacting to Insights
Large companies may be able to combine data with large budgets, and highly qualified teams of data analysts, but small businesses have an advantage as well. They can combine data with agility. Your business will also be more resilient in the face of policies and procedures that often slow down change in larger organizations. Instead, you can identify an area of improvement, conceive a solution, test it, and implement it, all before a large company has formed a committee or started the approval process.
Small business owners who want to use data have a unique set of challenges in front of them. You must identify how to obtain the data you want to use, where to store it, when to erase data, and how to best use the information in order to make your company more successful.
The tips and tools suggested above can help businesses level the playing field when it comes to their bigger competitors. You can make data work for you to create growth, and better meet the needs of the average customer.