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Big Data for Small Businesses: Everything You Need to Know
Big businesses have a wealth of data available to them. They have the resources for expensive tools and data scientists to leverage this data and turn it into actionable insights. Although many small businesses may not have these same resources, there are still ways you can use big data to impact your outcomes.
Any business, however big or small, can use data to improve their processes, marketing campaigns, product offering and more.
In this guide, you’ll learn what big data is, the benefits for your small business, ways to use this data, tools to use and how you can get started. Plus, you’ll find answers to frequently asked questions.
Big data refers to data that contains great volume, variety and insight. The data can be structured, unstructured or semi-structured. You can’t process this data via traditional, manual methods because the dataset is too large. It can, however, be analysed, segmented and turned into actionable insights for small businesses to make strategic decisions.
There are many tools available to help you with this, or a data scientist is sometimes hired by businesses to make sense of the data.
An example of big data is digital marketing analytics from platforms like Google Analytics. This contains information about every user who has visited your website, what pages they visited, where from and how they navigated through your website.
Big data is also accumulated through social media platforms every day, generated through user interactions such as uploads, likes and comments. Web and social media user data is used primarily for marketing and advertising purposes. There are huge quantities of this that help identify what users actually enjoy clicking on, viewing and even purchasing, which is where social listening can provide particularly useful insights.
It would take too long for an individual to comb through large sets of Google Analytics or social media data manually, which is why these databases exist. Today, businesses gather or buy big data to understand consumer behaviour more accurately. For example, businesses can segment, analyse and interpret the data to enhance their decision-making.
Insights can inform changes to the website, future marketing campaigns or new products and services.
Big data can increase a small business’s revenue, reduce costs, solve problems and help you to understand your target audience better.
1. Increase revenue
Companies that analysed big data saw an , according to a survey by BARC.
By analysing big data like marketing analytics, you can identify new opportunities to increase revenue. For example, you may notice that users are 10% more likely to make a purchase if they visit a particular page on your website. From this, you could decide to make this page more visible in your navigation, thus increasing sales.
You could also leverage data about what people search for on your website. If 1000 people search for a product per month that you don’t currently sell, this could inform future product development, thus filling a gap in your offering and resulting in more sales.
On a wider scale, customer data insights can reveal purchase, delivery, and payment preferences, helping small businesses develop their products and services in line with what customers want.
2. Reduce costs
Big data can offer insights into your processes and can help you pinpoint where they may be inefficient. For example, you may find a way to streamline processes so your employees can take on more work, removing the need to hire new staff members.
You can also identify which areas of your business are making money, and which ones aren’t. This way, you can effectively allocate your budget so you’re spending money in the right areas.
3. Understand your target audience
Big data can tell you more about your customers and prospects. For example, their age, gender, the device they use, how they prefer to purchase, or navigate through your website. It can also tell you about their interests and lifestyles.
This can inform your marketing campaigns, so you can better understand and target the right people. It keeps your messaging on-target and will increase the success of these campaigns.
It can also tell you what kinds of products and services they may be interested in, so you can better tailor your product offering to align with this.
4. Solve problems
Are people not converting on your website? Or are they flocking to your competitors instead of buying from you? If so, big data can help you identify, diagnose and resolve issues like these.
For example, if you’re getting lots of traffic to your site but no sales, big data can help you pinpoint where users exit the website. This can help you understand what may have deterred them from making a purchase, so you can make changes to those pages.
Say you notice that a lot of your business is going to your competitors. Armed with data, you can work towards identifying why this is the case. Perhaps their pricing has changed, or they’re offering many products that you aren’t.
Bernard Marr, writing in his book Big Data for Small Business For Dummies, offers six key ways that small businesses can use big data.
1. Identifying trends
Identifying trends can help you anticipate future customer behaviour. It enables you to forecast and predict what the market may look like, and better understand what customers will be looking for in the coming weeks, months or years. You may already have a hunch, but data can help validate your ideas.
For example, by leveraging data from social media, you can better predict what topics users may want to read about on your blog. You can see what topics people are Tweeting about, hashtags that are trending and profiles that are becoming more popular.
2. Competitor comparison
There are lots of tools you can use to scope out your competition. SEO software like SEMrush can show you how much organic traffic a competitor’s website receives, social media can tell you how often they’re talked about and with what sentiment, and financial data can allow you to benchmark how you’re performing in terms of revenue.
Before, competitor comparisons were based on gossip, rumours and unreliable sources. Now, big data analytics tools and databases mean you can have a much better eye on your competitors’ performance.
3. Customer profiling
Analytics data can provide you with information on a user’s age, device, location, gender and general interests. As a result, you can create more accurate, data-driven customer profiles to target. This can inform your marketing strategy, including targeting for paid advertising.
You can also collect customer feedback – both quantitative and qualitative – that can help you make decisions moving forwards. For example, many websites include star rating systems for products and comment sections for blogs. This can give you a better idea of how your customers are feeling, rather than relying on ad hoc comments.
Through customer segmentation, small businesses can make better sense of big data – with precisely categorised customer profiles that let marketers speak to the right customers in the right way
4. Managing staff and recruitment
By using HR software, you can collect lots of useful information about your workforce. For example, you can identify trends in absenteeism and alert employees who need to take more annual leave.
You can also use software and productivity trackers to monitor key performance indicators (KPIs), so you can identify staff members for promotion and include data in performance reviews. Data can also be useful during the recruitment process, as it can help you identify ideal candidate profiles to target with LinkedIn messages and emails, for example.
5. Operational improvements
Say you operate a factory in the manufacturing industry. You could collect data from your machinery that’s connected to the internet of things about your production line, so you can identify inefficiencies and make improvements. Then, you can compare this data before and after to see if your changes have made an impact.
Delivery companies may also benefit from data analytics. By utilising GPS technology, you could calculate which routes are faster and adjust delivery times based on real-time traffic predictions.
6. Overall business strategy
Big data can inform long term business planning, which is key for any small business looking to scale. For example, you may use social media, search, website and customer database information to understand which products your target customers engage with, and whether this engagement is likely to increase or decrease.
Then, you can use this to inform which products you decide to sell and manufacture. In turn, this data can inform the entirety of your business offering moving forwards.
Data, when used in conjunction with qualitative insights and market knowledge, can enhance and validate your entire business model.
Small businesses often lack the internal resources to hire an analytics or data team. There are tools out there that will help do some of the heavy lifting for you.
Google Analytics
Google Analytics is a free tool that’s available for anyone to use. You can see how many people visit your site, where from, what actions they take and set up goals to understand whether the site is driving revenue. This is invaluable data, and easy to interpret as a small business.
Tableau
Tableau is a platform where you can easily visualise business data without the need for programming experience. You can query spreadsheets, databases and more, pulling together data from multiple sources to create simple dashboards. This makes interpreting your data much easier, as you can drag and drop elements together to answer key business questions. For example, how much revenue are we generating? Which products are selling the best? Which marketing channels are our best performers?
Hotjar
If a large percentage of new business comes via your website, then Hotjar is an invaluable tool to understand user behaviour. It creates heatmaps, so you can see where users click, scroll and navigate to on your site. This can inform where you place calls to action like ‘buy now’ buttons and contact forms, resulting in more sales and leads.
Alteryx
Business data can come from internal or external sources. When combined, you get a bird’s eye view of your company, competitors and the market more generally. Alteryx combines internal data with publicly available information, so you can pull together multiple sources in one place into a visually-appealing dashboard.
Online
Online is our own self-serving data management platform. This lets you clean, enhance and manage your customer data – all in one place. Any uploaded data is screened for validity, verification and accuracy, helping you keep your data clean. It can also be used to enhance existing data with more information about your customers, helping businesses learn more about customers and, in turn, market to them more effectively.
1. Set goals
What do you want to achieve by analysing business data? More revenue, increased efficiency, or better data-driven customer profiles, for example? Set a goal first, then you can perform actions to work towards them.
2. Source the data
Where are you going to get your data from? Do you have internal databases, Google Analytics properties or publicly available information to utilise
3. Analyse and interpret
If your business is big enough, you could hire a data scientist to help. Otherwise, if you’re a small business, you can use tools like Tableau to visualise the data and pull out patterns and trends.
4. Create actions
Data analysis isn’t worthwhile if you don’t use it to create clear, actionable recommendations. Now you’ve interpreted the data, what are you going to do as a result to achieve your goals
5. Measure the impact
Once you’ve implemented the recommendations, compare the data before and after. Have the actions made a positive impact on your business?
What is small and big data?
Small data refers to a small dataset that is easy to comprehend and understand by a human. Big data refers to a dataset that is so large and varied that a human cannot process it manually. Usually, tools, databases and spreadsheets are required to manipulate and interpret the data.
How can data analytics help small businesses?
Data analytics can help businesses to increase revenue, reduce costs, improve efficiency and create more accurate customer profiles. In short, it provides valuable insights to inform data-driven, strategic business decisions to positively impact performance.
45% of small businesses track analytics data, according to a survey by SCORE. In addition, a 2020 study by OnePath found that over 46% of SMBs spent more than $10,000 on their analytics solution.
How do businesses get data?
Businesses acquire data via website analytics tracking software and customer surveys, as well as external sources like publicly available financial data and social media platforms.
Big data has big potential. And for small businesses, it’s essential to get it right when figuring out how to grow, and in which direction. Without data insights, business decisions are a shot in the dark. It’s essential to make data an integral part of your business growth. This way, your business decisions are based on solid insights from real customer data.
There is reassurance in using big data to grow your business. Leveraging big data analytics lets you identify where the opportunities lie, and avoid making costly mistakes.
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