A popular novel, written for young and/or single females and housewives, wasn’t resonating as well as expected with its target audience, despite targeted marketing campaigns. To find out why, the publisher unpacked the book’s sales data and found that the majority of readers were actually men and older women.
Using this information, the publisher changed its marketing strategy and noted a massive increase in sales, practically overnight.
Small businesses can get the same value out of their data, to influence decision-making and drive transformative change – especially on the bottom line.
Yet, most SMEs are still cautious about big data, believing it’s complicated, that analytics is expensive, and that they don’t have the skills or tools necessary to process massive volumes of information.
But, as we head deeper into a data-driven economy, SMEs that don’t act on their data will miss out on growth opportunities and might not survive digital disruption.
Demystifying big data
Type in ‘big data’ in a search engine and you’ll probably see the words ‘volume’, ‘velocity’, ‘variety’, and ‘value’.
In a nutshell, this means that businesses are producing so much information, so quickly, that it’s difficult to make sense of everything. Some of the data is organised – for example, it might be neatly categorised in a client database – but most data is ‘unstructured’, meaning there’s no real order to it and it comes from multiple sources, including internal systems, social media, audio, video, and text.
Both structured and unstructured data – whether it’s stored on your own servers or someone else’s – must deliver genuine value to the business for it to be worthwhile to collect and analyse. There’s no point gathering information that will not serve the business’s bottom line or help it to achieve it’s goals.
Why should small businesses care about big data?
Facing a mountain of data can be overwhelming. Where do you start? What questions should you ask?
Our advice is to find a small but specific business problem that you’ve been struggling to solve and play around with your data until you find an answer.
Some questions you might want to ask include:
- Am I targeting the right audience?
- Why does product X sell well in one city but not another?
- Why did my sales peak on this specific day, and how can I repeat that?
If you haven’t started collecting your own data, you can start by tapping into free public data sources, like social media, government census data, corporate market research, and weather patterns.
You can easily start analysing your own information, like website traffic data and social media sentiment, using social media monitoring platforms and Google Analytics. Most of these tools have a light, free-to-use option that gives you insights that you can act on immediately, like:
- Breaking down your sales data to better understand customers, which helps to refine your marketing strategy;
- Analysing the language and sentiment that your customers use when talking about your brand on social media or when phoning the call centre, to identify problems and address them faster, resulting in happier customers;
- Seeing what your competitors are doing and where there are gaps in products or services that you can fill;
- Understanding how factors like weather in a certain area impacts customer buying patterns, which helps you to better manage your inventory;
- Using the data analysis and business insights tools in your cloud accounting and invoicing software to better understand trends in your own business, like which products sell better over the weekends;
- Measuring website traffic to understand how people access and interact with your content and, therefore, where to focus your content marketing efforts; and
- Analysing search trends – freely available from Google Trends – to see what people are searching for and how you can adapt your content to attract more website hits.
Modern data analysis tools have been designed for the business user – you don’t need to be a data scientist to use them. Insights are presented in easy-to-understand visuals and graphs and most software uses familiar applications like Excel to extract data.
As a small business owner, you might not think that you have a lot of data and don’t need to worry about analysing it. But the reality is that every business is a data business, and every business should be looking to its information – no matter how much or how little they have – to uncover insights that could positively impact their operations, growth, and profit.
Information is power and the more you know, the better decisions you’ll make for your business.