Big Data for Small Business - How to Best Utilize Your Data

Eric Gordon

June 16, 2017

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"Big data" has been a hot buzzword in the world of big business for the last several years. According to IBM, 90% of the data in the world today has been created in the last two years alone.

Finding ways to use such large amounts of data can be intimidating, especially for small businesses. However, the volume of big data in small businesses is only a small fraction of what big companies deal with. The average small business may have less self-generated data than big players like Facebook or Google, but big data isn't off limits for the smaller players.

In fact, since small businesses are generally more agile and able to act on data-driven insights, big data is in many ways more suited to them. In this article we'll look at the benefits of big data for small companies and the process of utilizing the data.

The Benefits of Using Big Data for Small Business Insights

Understanding What Your Customers Want
Big data gives small businesses the opportunity to have a fuller picture of their customers. This full picture includes what makes the customers tick, how they prefer to shop, why they buy, what they'll buy next, why they switch, and what factors make them recommend a company to others.

Companies also have the chance for improved interaction with customers by analyzing customer feedback in order to improve their products or services. Useful sources of data include traditional records like sales data and customer service logs, social media, text analytics, and large, public sets of data such as Census data. Social media has become an especially valuable source of data, making it easier to identify niche markets and analyze customer feedback.

Improving Your Products and Operations
The optimization of business processes and everyday operations has been increasingly enabled by big data. Some businesses collect large amounts of data on how their customers use their products, and then analyze this data to reveal insights that lead to product improvement.

If you have a business process that generates data (such as machinery on a production line, or sensors on delivery vehicles) you can use that data to make improvements and generate greater efficiency.

At manufacturing or industrial companies, machines and other tools can be made "smart." This means they can be connected, data-enabled, and constantly trading status reports with each other. Organizations can analyze this data and gain real-time visibility into their operations, looking for ways to increase efficiency. In the world of retail, companies can optimize their stock keeping by using predictions generated from data.

Checking Out Your Competition
Understanding your competition used to be limited to industry gossip or snooping around competitors' shops or websites. These days, you don't even need to leave your desk to see what the competition is up to.

You have the ready availability of financial data, insights on the popularity of a brand or product, and social media analysis to show what customers are saying. Keep in mind that it works both ways. It's also easy for your competitors to get more information on your business than ever before.

Identifying Market Trends
You can better predict where things are headed if you identify and monitor behaviors and patterns. You can see how demand for your products or services will change over time and also know what prompts the change. Previously, trend analysis and prediction often relied on 'gut instinct'. Now, big data takes out most of the guessing.

Trending topics flash across social media every day, making it easier to understand what people want. Trend data can be collected and used to answer specific questions for businesses.

How the Process Works

1. Identify the Problem
Trying to make sense of big data can be overwhelming. Think about it as a tool to solve challenges. Be selective as to why you need big data, and what ways you can execute on using it. Set clear goals (short and long-term, perhaps in areas such as new customer acquisition) and start with a single question and hypothesis.

2. Gather Data
You can gather data without having extensive programming skills. There's plenty of easily available tools and resources for you to use, including social networks, Google Analytics, and online databases. Start small and grow.

3. Use the Right Business Intelligence Tool
Once you have data collected in your databases, you will need a business intelligence tool that will allow you to watch as the data is being crunched and business insights emerge.

Choose the right software out of the many that are available online. How? Check if the tool is easily deployed and can be used within minutes. Know the features of your chosen software and utilize it as best as possible.

4. Define Relevant Metrics
Understand that you cannot measure everything. Focus only on metrics that are relevant to your objectives. Selected metrics must describe progress to the extended goal. For example, if you have customer acquisition goals, relevant metrics could include message response and awareness.

5. Understand Data Quality
You must have confidence in the data that supports your company's intelligence and decisions. Knowing the source, age, and hygiene of the data ensures confidence in the results. Avoid incomplete data which could skew your projections.

6. Analyze the Results
Take a broader view and see the forest instead of the trees. Get your team involved, encouraging communication and collaboration. Make regular measurement of your metrics and iterate from findings. Make sound strategic decisions based on what you have.

Now that you have a better understanding of how to use big data, next you should think about how it can be applied to your business. Choose and implement a strategy and be sure to have a good consideration of what your needs are. Big data may be a hot concept in business but that doesn't mean you should just jump in without having a strategy and start collecting all the data you can.