Here’s a fun fact: 90% of the world’s data was created in the last two years, and is set to double annually.
You’re a small business, what does Big Data have to do with you? It’s all about the customer, without whom you wouldn’t be in business. Knowing who they are and what they want leads to more effective marketing, increased brand loyalty and more sales.
Decide what data is useful to your business: Start with the basics. Customer names and email addresses are often the easiest to capture in person or online. With the right point of sales systems you can also track transactional data fairly easily – what your customers are buying, frequency of purchases, and the like. Finally, there’s demographic data. This (potentiall) touchy subject helps you know each more individually and craft offers that increase purchase rates while also delivering better value to the market. If you use Facebook, you have a wealth of demographic information at your fingertips. Take some time to understand it.
- Find the best E-mail Marketing Software for your small business (we use Emma and love it)
- CRM Enabled POS Systems safely capture and store your customer’s data.
- Facebook Audience Insights – a deep dive into demographic data.
Find Your Best Customers: Knowing your most valuable customer helps you focus your efforts. Traditionally, businesses often define their Most Valuable People (MVPs) as the buyers who spend the most money. However, these may be the most expensive to keep over the long term. This is where big data analytics comes in to play. Tease out demographic and behavior trends that correlate with your best customers (buyers whose lifetime value is greater than the combination of acquisition and retention costs). The desired end result is several groups of customers defined by behavior, demographics and merit prioritized by the value they provide to your company.
- Average purchase size: How much do your customers spend on a typical purchase? Take into consideration that people buy based on value, not solely on price. Can you sell more to your customers using promotions to develop awareness and interest in other products?
- Lifetime value: How much money does the customer spend with you over their lifetime? This metric is indicative of the relationship you have with your customers.
- Acquisition costs: How much have you spent on marketing and sales to get this type of customer? If you spend a lot, let’s hope that your customers don’t cost much to keep and that they make large purchases from you.
- Retention costs: What do your buyers need from you in order to stay? Usually it costs more to acquire a customer than keep them. Make sure that you are doing your best to build relationships and make them feel valued.
- Customer happiness: Are your customers satisfied with your products or services? Are there groups of happy and unhappy customers, and what is the difference between the two? Investigating this may reveal flaws, highlights necessary improvements and can even prompt you to adjust customer expectations.
- Value alignment: Are your intended customers actually buying from you? If the intended core customers are not buying from you, then who is?
Consider These Action Items: While few small businesses actually have enough data points to be considered “Big Data” you can make smart decisions based on much smaller data sets. Knowing your customers, where they’ve come from, and what they’re responding to helps strengthen your marketing campaigns. You’ll be able to target the right customers with the right deals and identify the best channels to spend your hard-earned marketing dollars.
- Start small: Focus at first on making better use of data you already have. If you have a lot of traffic to your website you can get interesting insights simply by exploring the details of Google Analytics. This gives you the big picture on your business’ universe.
- Make Sense Out of Social Media: There’s a wealth of information available to you. But it’s an unstructured mess. Make use of all those millions of opinions, complaints and compliments that are flying around every day on social media. There are plenty of social media analytics solutions available, many of them at low cost. Popular options include Brandwatch, HootSuite and SproutSocial.
- Benchmark Against the Competition: Learning what your competitors were up to used to be difficult to achieve. You had to rely on surveys, often based on limited and outdated information. The QuickBooks Explorer page lets you see aggregated data on other small businesses in your state: how quickly they’re growing, how much profit they make, what they spend their money on, and more.
- Keep an Eye on ROI: To make sure big data is both effective and worthwhile, ROI is key. Small Businesses should constantly measure spending against the potential return. Harvest data to discover what triggers purchases, whether online ads, a brochure download, or a simple Google search. That information helps optimize online marketing campaigns to maximize revenue. You can also keep costs in check with tools like Marin Software, which uses big data to help its clients decide how much to bid for online advertising slots.