4 ways big data can help small businesses grow
If the term “big data" conjures an image of an oversized Star Trek robot, it's time to get your head into this century.
Big data is a big deal for small businesses and large businesses, alike. In particular, data for small business can unlock opportunities that lead to new customers, higher margins and improved efficiency.
In other words, if you don't pay close attention to the data for your small business, you could be missing out on opportunities for growth and increased profitability.
Here are four ways you can tap into the numbers to take your small business to new levels of success—no giant robot required.
1. Highlight Business Successes With Detailed Records
Sports analysts spend entire careers digging into the numbers on professional athletes looking for opportunities to squeeze every possible bit of performance from each player. You don't have to deflate footballs or spy on your opponent's baseball calls to get an edge: The numbers often tell exactly where each player excels and falls short.
A quality bookkeeping system gives you similar insights from your business data; and a fine-tuned accounting system organizes your revenue and expenses into detailed categories. A review of your financial results should tell you what part of your business is doing best and where you have room to improve.
Many successful business owners look at what's working well as a place to double-down for future success. If you're already succeeding in one part of your business—even if it isn't where you expect—you should see it as an opportunity for even more growth.
2. Understand Customers to Fine-Tune Your Marketing Strategy
Experts suggest businesses create customer avatars they can use to market their business. The big problem here, however, is that many business owners get their avatars completely wrong: You might think your average customer fits into a demographic that is far from reality.
Don't try to sell products to customers that don't exist or people who may not be interested in your products or services. Looking at real customer demographics, average ticket sizes, typical purchases, among other info, can show you a bright spot for future marketing.
Remember, you wouldn't try to sell high-end steaks to vegetarian customers. The same logic works with most products and services: It would be a waste to spend marketing dollars promoting your products to people who are unlikely to buy. If you market to the type of person who is already visiting your business, you're in the best position to find marketing success.
3. Find Out What's Working With Web Analytics
Does it ever seem like your devices are tracking your every move? When you're the webmaster, you are the one doing the tracking. With analytics in place, you don't have to wonder about what's working well on your business website.
Look at your website analytics to find what your visitors are most interested in. Advanced analytics can give you even more insights on potential customers for online and offline advertising. Free analytic services are available to assist in collecting your website's analytics, including demographic data like gender, income and location.
Like any other part of your business, you can find what's working on your website and repeat to amplify the results. This data also helps you choose demographics for social media site ads, keywords for search engine ads and allows you to use advanced techniques like retargeted advertising.
4. Dig Into the Weeds to Eliminate Waste and Stay Efficient
If you run a hotel or restaurant, you probably hire a landscaping company to keep your grounds attractive to visitors. But you can't trust your landscaper to dig into the real weeds of your business. Those may be hiding in the dark corners of your company that you rarely think about.
For example, restaurants require a long list of food ingredients, cleaning supplies and staff to operate. You could be so busy focusing on important things like your menu and food costs that you miss out on other important things like what you spend on cleaning chemicals, maintenance or your fabric vendor.
Detailed record-keeping is vital in the food and hospitality industries. It's imperative to know where every dollar goes so you can eliminate waste and improve margins.
Take the Time to Pay Attention to Data
For your business data, size matters. Big data sets give you unique insights to turn numbers into a real business intelligence strategy.
The benefits of big data aren't limited to big businesses. The SizeUp competitive analysis tool is a good place to start, as it helps assess your business and how you stack up against the competition.
Even the smallest businesses can find ways to improve by focusing on the numbers. If you don't stop to look at the story behind the figures, you could be leaving a lot of money on the table.