When you think of data analytics for business, you probably imagine that it’s beneficial for the big companies out there. And you’re right – but you may be underestimating just how important data analytics can be for smaller companies looking for ways to boost their growth.
From family businesses to large global organisations, data analytics is essential for a wide number of reasons. Not only does it help you save your most valuable commodity – time – but it also helps to solve errors and problems, unlock new insights into your customers or marketing strategies, and the big one – it can help you save money and increase your company’s profitability.
Data analytics is achieved through the proper collection, processing and application of information – and it’s not just about making sure that you’ve got the right software and tools for the job. For data analytics to work well, you’ll also need access to skilled, experienced analysts or data scientists. You will also need processing solutions, automation systems, and a highly structured environment to collect data from sources.
As a small business owner, you’re probably already aware that you need to wear many hats. You might often feel stretched out across a huge variety of tasks and responsibilities. You just don’t have the same kind of resources as a large organisation, so it’s harder – and sometimes even impossible – to delegate those menial, time-consuming tasks to somebody else. You have no choice but to get them done by yourself.
So, it’s absolutely essential that any solutions or tools that you implement in your small business operations are very effective and waste as little time as possible. After all, data is only as meaningful as how well you are interpreting it.
However, it can be a tedious job, which is why small business owners often outsource it or take on consultants who’re skilled in data analysis. But if you’re up for the challenge, you might want to consider getting good at it yourself with a business analytics degree from an institution like Aston University Online.
Data analysis uses automated processes, machine learning, and mapping insights to business strategy; all of which are imperative to business efficiency and success.
Surveys found that 31% of consumers want their online shopping experience to be much more personalised, and just 22% of customers are satisfied with the level of personalisation that they currently receive from the online shops that they patronise.
It’s clear to see that personalisation is hugely important to today’s customers – and it goes much further than simply addressing them by their first name in an email.
Take Amazon – arguably the biggest ecommerce brand on the planet. They paved the way for personalising the online shopping experience, using data analytics to learn as much as possible about their individual customers. They are hugely focused on customer demands and desires, offering features such as:
- One-click purchasing – allowing customers to ensure and save shipping and payment information for instant future purchases.
- Recommending products to customers – using customers’ past purchases, product views, shopping baskets and wish lists to recommend relevant products that they may be interested in.
- Frequently Bought Together – Amazon uses data analytics to determine which products are frequently bought together, and uses this to suggest additional items to customers at the checkout.
- Ask – known as the ‘Customer Questions & Answers’ section, Amazon goes one step further than reviews by allowing customers to engage with one another when they want to find out more about a product from somebody who’s bought and used it.
And their work is paying off. Amazon reports that a huge 35% of their sales come from personalised recommendations.
As a small business owner, you need to work around the fact that you simply don’t have the same massive marketing budget as the larger companies. You need to be much more careful and more precisely targeted when it comes to where you spend money on marketing, so that no penny is going to waste.
Data-driven marketing campaigns are more successful because they:
- Reveal and unlock marketing insights
- Reach larger audiences
- Reach new markets
Using a data-driven marketing campaign, you might discover a demographic that you thought to be irrelevant, or even discover a new area or local region where there is a demand for your product.
You can use online tools like SEMRush, Moz and Kissmetrics to help you get a better understanding of who your ideal customers are, what they are looking for, whether your business is meeting their requirements, and the various opportunities that exist for your business.
For small businesses, using data analytics tools like these when it comes to marketing campaigns is absolutely crucial. They allow you to precisely focus your campaigns and avoid irrelevant targeting, maximising the use of your marketing budget.
But doesn’t data analysis cost a lot of money? Not necessarily. Thanks to free or affordable software, open-source analytics tools and other inexpensive solutions designed for small companies, reaping the benefits of data analysis is no longer limited to businesses with a massive hiring budget for in crew of in-house data scientists.
Data analytics tools for small businesses are becoming much more readily available, including:
- Blendo: Makes it easy for small businesses to implement data analytics on their storefronts.
- Wolfram Alpha: A free tool that allows you to analyse information to quickly derive insights and information. There’s an option to upgrade to a paid pro version.
- ClearStory Data: A tool designed for small to medium enterprises that helps to convert data into effective stores.
- Microsoft Power BI: Helps small businesses quickly and easily identify opportunities to make data-driven decisions that reduce cost.
Another option for small businesses is to hire a freelance data scientist. Freelancers are paid per job, meaning you can hire them for short or specific projects when needed. It’s much cheaper than taking on a full-time data scientist.
Data analysis enables the use of details in real-time. Not only does this allow small businesses to accurately predict outcomes and performance, but also deal with events in the moment rather than after the fact.
Conventionally, businesses would only be able to take action, collecting customer insights and performance data afterwards. For example, a company may have been able to see how receptive the audience is after a product launch. All the work would have already gone into creating or sourcing the product and launching it before the business could determine how much it sells, or even whether or not it’s a failure.
With data analytics, companies have much more control in the moment. They can cease further production of a product that’s unpopular before investing in a launch, for example. For small businesses, this is a game-changer. It helps to eliminate ineffective solutions, curb rising costs, and improve the overall security of the company’s future.
Answers given in better context are one of the main things that data analysis can provide. And it’s no secret that small businesses make mistakes and have problems. It’s all part of the learning curve and with the right approach, is often critical to business growth.
But without data analytics, you’re running the risk of mistakes, errors and problems getting too big for your company to handle. Analysis can help you discover inconsistencies that you had no idea even existed, and deal with them before they become large enough to impact your company’s success.
Data analysis is especially useful for highlighting any mistakes in data input and management. It allows you to look at the information from various perspectives and quickly identify what is happening, where, and when. For example:
- A cashier is having problems entering customer details at the checkout
- Customers are struggling to enter their details at your online store
- Your system is auto-correcting information, resulting in it being incorrect
- Your system for personalising the online shopping experience isn’t presenting relevant products to customers at all
A thorough analysis, particularly predictive analysis, can help businesses get a better understanding of what’s going wrong, where it’s going wrong, and at which stage. As a result, companies can make necessary changes quickly, rather than only becoming aware of the issue when it’s causing them to lose money.
Data analysis, big data solutions, and the variety of automated technology on offer can provide considerable benefits to small businesses.