Big data, data Science, data analysis or analytics have become ubiquitous buzzwords in the world of business intelligence. Restricted in its nascent stage to big corporations, perhaps because of the huge resources involved, data analysis is now proving to play a big role in all kinds of businesses including small and medium businesses. Analytics is now for everyone.
In a 2010 study, researchers from the University of Texas discovered that businesses can increase financial returns by improving data quality, usability, and intelligence. Annual sales per employee could increase by as much as 14.4 percent if data usability is increased by 10 percent.
What then can small and medium businesses gain from analytics?
Targeted Customer Experience
It is not unusual to find data analysis reports that show surprising deviation from a business’ target demographic – the people consuming the products and/or services come from an entirely different group. With data analysis, small and medium businesses can begin to target the right group set that wants what they are offering. This is particularly critical for small and medium businesses which place great priority on high return on investments (ROI). Not only is data analysis used in the targeting the right group, it also gives businesses the opportunity to pay specific attention to what the demographic wants and personalize their offerings to meet their needs.
Business Structure Evolution
How a business is structured is key to driving its business model. With data analysis, small and medium businesses can pinpoint the most effective structure that will yield the most returns. Raw data obtained from marketing, finance, operations, human resource or other areas can reveal trends and patterns such as the most effective process flow pattern.
Small and medium businesses can take advantage of data analysis to stay ahead in their industry area with big players. There are affordable business intelligence tools now available that allow one to gather, measure and analyze data of other businesses within the same industry. With the insight gained, businesses can make smart and insightful decisions that can become game changers.
Price Sensitivity and Customer Spending Habits
Customers respond in interesting ways to price changes. Hence, small and medium businesses must pay close attention to how customers respond to price elasticity of their products and/or services. This can be tracked by measuring a number of sales at one price versus sales at another price. The insight gained from the data analyzed can then be used to drive effective marketing strategies. For example, during recessionary economic situations, consumers tend to be more conservative with spending; thus, greatly increasing the price of the product might scare consumers from your product. This is quite tricky but data makes decision making a lot easier than intuition.
Effective Digital Marketing
Take away data analysis from digital marketing and a small business may well be wasting its resources. This is one area where data analysis is placed in the highest regard especially in the area of social media. Social media is an evolving world of its own; businesses can interact with this world through data analysis. Gathering, tracking, measuring and analyzing data is key for small and medium businesses attempting to use social media to drive digital marketing efforts. What brands and customers are talking about? What conversations are they having on Facebook about a product or a service? What and where are they searching for that product through Google Search? How can a small or medium business fit into the current trends on Twitter? Answers to these questions can become clearer with insight from data gathered through social media channels. With the insight gained, small and medium businesses can tweak or align their marketing efforts to capture attention and pull customers toward their brands. This can be an overall game changer for small and medium businesses striving to gain an edge and take the competitive lead.
Suffice it to say that data should not only be gathered, but a great deal of work should be put into analyzing and processing data into information. Small and Medium businesses can outsource this to an external data scientist or take advantage of business intelligence tools depending on the available resources.
If small and medium businesses don’t pay attention to data analysis, they are not listening – they are not listening to their business and to their customers too. A constant dialogue exists between the business and its customers. With data analysis, businesses can begin to make sense of the conversation, gain insight and prime their business approach to producing better long-term results.
Analytics aids business intelligence which is the ability to make insightful decisions based on available data. Business decisions are no longer based on intuition but on cold hard insight drawn from raw data.