Today’s post is by Roy Rasmussen, coauthor of Publishing for Publicity. Rasmussen writes about small business for OnDeck to help small businesses get more customers and make more sales.
Using big data for business intelligence (BI) applications is a common practice for companies of all sizes. Tech Pro Research reports that approximately one out of five small businesses now use big data solutions for optimizing either their marketing effectiveness or their operational efficiency.
This number is on track to grow as cloud and smartphone technology bring smaller companies access to the same big data resources available to larger enterprises with big budgets.
By 2017, most business users and analysts will have access to self-service tools that prepare data for analysis, Gartner reports. As more small businesses use intelligence from big data to streamline their efficiency and leverage their marketing activity, small business owners will find big data and BI increasingly relevant for unlocking growth opportunities and staying competitive.
Here’s a closer look at what big data means for small businesses and the benefits it can bring to your company.
What Is Big Data?
As a consumer, you are constantly creating data about activities, such as your purchase history, shopping habits, social media activity, and how you pay your bills. Businesses then collect this data from large numbers of consumers, which helps contribute to the enormous amount of electronic information known as big data.
From a business analytics and intelligence perspective, big data is a tool to help businesses analyze large amounts of data relevant to their business and make decisions based on this analysis.
How Big Data Can Help Your Small Business
You can use big data to figure out how to improve any area of your business – from getting your customers to buy more to spending less on shipping to increasing your employees’ productivity. Big data intelligence can also analyze information related to any part of your business, including
- Market research on your customer base and competition
- How efficiently your operations are run
- How productively your employees are performing
- How well your marketing and sales efforts are going
- How cost effectively you’re running your supply chain
When coupled with business analytics and intelligence tools, big data can help you rapidly gain insight into virtually any area of your business and make strategic decisions you might otherwise have overlooked.
Big data also harbors a hidden goldmine for delivering customer satisfaction, explains Dataconomy with a few examples. Analytics tools can sift through a customer’s buying history as well as information collected from their online activity in order to deliver personalized sales offers that anticipate the customer’s needs (much as Amazon does with its Website function that recommends books based on a customer’s purchase and browsing history).
You can also analyze your company’s entire customer database and purchase history to identify customers who would be most likely to buy a product you have on sale. You might then put this information into action by running a direct mail or mobile phone texting campaign offering a discount to those customers for the products they want most.
Turning Data into Insights
To turn big data into practical applications, companies rely on analytics tools that extract information from data in order to solve a particular business problem. If you want to cut costs, for instance, you might analyze data from your accounting spreadsheets in order to figure out where you’re wasting the most money. You will then know where to concentrate your cost-cutting efforts.
Using Data to Craft Long-term Business Goals
In addition to analyzing historic data trends, you can also use big data to develop business plans that leverage projected future data trends. The first step is to define the business problem you’re trying to tackle and gather all the relevant data. You can then analyze the data to identify trends and make projections.
Once you’re confident you’ve interpreted the data correctly, it’s time to plan action steps. Integrate the results of your analysis into your next business planning cycle and set goals that reflect what you’ve learned.