We live in both the digital age and era of ‘Big Data’. The two feed each other and any business that fails to make use of the wealth of digital information available today risks falling behind as more clued-up competitors take advantage of Big Data to feed their growth.
In fact, Dell’s second annual Global Technology Index (2015) reveals that organisations actively embracing the use of Big Data post revenue growth rates 50% higher than those that fail to.
Getting a leg up on the Big Data refuseniks
Big Data can be a daunting concept, seen by some small and medium enterprises (SMEs) as the preserve of corporate giants that can use their massive computing power to analyse huge volumes of complex information to guide their every move.
What it really involves is simply gathering all your business data together and analysing it to obtain actionable insights that make you more money. In other words, Big Data is for little guys too – just as long as they make the effort.
Many SMEs, however, fail to use their data. Research from Barclays shows only 44% of companies check their data on a weekly or daily basis, while the remainder do so rarely or infrequently – and 15% said they have never even considered analysing business data. The upside is the SMEs that do gain an edge.
What Big Data gives you
Big Data helps you build a more accurate big picture of your industry and company. It provides the business intelligence to achieve cost reductions, save time, boost profits and generally make smarter decisions at all levels.
Data analysis gives you the means to identify trends and patterns, whether by demographic breakdown, geographical spread, spending amount, product or service preference, purchasing channel, buying trigger, timing and other factors.
This not only feeds into business decisions in areas such as pricing, distribution, product development and marketing but it provides specific insight into individual customers – their needs, interests, personal circumstances, preferences and spending behaviour.
This in turn helps you to answer key questions, such as: Who are my most valuable customers? Why they are buying particular products or services? How can we build better relationships with them?
Where it comes from
There is an abundance of online channels and interactions that yield data every day – digital gold dust from web browsing, transactions, emails, web forms, customer service logs, and other interactions via the web and mobile apps. Some SMEs might even be able to tap into wider data sets though partners in their supply chain.
How to unlock it
Most SMEs should start with their clients and build a ‘single customer view’ (SCV), bringing together data from various databases, including marketing, sales, customer service, finance, deliveries, and other departments that capture prospect and buyer information – and clean then the data to eliminate errors, outdated information and duplicate entries.
There are tools to analyse customer data for every budget and company size. Any SME should start with Google analytics, which is free and provides great insight into web traffic, visitor behaviour and levels of audience engagement – enabling you to assess and adjust digital marketing.
Another key tool for tapping into Big Data is a customer relationship management (CRM) platform, which many companies already have. CRM can provide the central SCV database and in many cases will have its own analytic tools. Other common SME applications, such as Microsoft Office and accounting app QuickBooks, can also provide analytics for specific data sets.
How the cloud helps
The cloud has been a major boon for SMEs trying to leverage their data, creating a more level playing field with bigger businesses.
Cloud storage has made it affordable for virtually any company to capture and house large amounts of information on customers and other aspects of the business, while the Software as a Service (SaaS) subscription model has made purpose-built analytics apps more accessible to SMEs.
Because there is little need for additional infrastructure, support staff and fixed licenses, cloud analytics solutions are easier to trial and more scalable.
What you can do with Big Data
With fewer barriers to prevent SMEs from doing increasingly sophisticated analysis of their data, one of the first and easiest things a business can do with Big Data is to use insight to improve sales and marketing. The Dell research found that 41% of businesses reported Big Data resulted in better targeting and increased return on investment.
Most SMEs will find they suddenly have the capability to refine targeting and personalisation as they build more accurate client profiles and segmentation models. A firm’s whole approach to customer experience becomes boosted by the knowledge Big Data yields, as customer priorities, pain points, characteristics, spending power and other details can be more precisely factored in.
One of the most fundamental exercises an SME can do drive growth is to use its data to calculate customer lifetime value (CLV), which involves tracking the costs and revenues for each customer to identify those that are most profitable versus those that eating up resources for very little return.
Using Big Data to understand CLV can be tremendously important to growth, as Gartner Group statistics show that, typically, 80% of a company’s profit comes from 20% of its customers.
Identifying profitable clients and shifting more focus on them is just the type of insight that enables companies that have embraced Big Data to grow faster than competitors.
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