In today’s business world, data is often called “the new oil.” Although there’s a popular view that only big companies can leverage big data, the comparison to oil is an apt reminder that businesses of every size are powered by the same fuel. As long as they take the right approach, small businesses can and should tap into the benefits of advanced data analytics alongside the big players.
Data analytics can refine and improve every area of business, from marketing to product development, customer support to DevOps, sales revenue to supply chain optimization. It’s relevant for every vertical, whether your product is software, takeaway fried chicken, or women’s apparel subscription boxes, because every business wants to identify where they can cut costs, how they can increase sales, and what customers really want.
Small businesses are heeding this message, but not all of them have found the tools and practices that allow them to manage data successfully. While 51% of small businesses say that analytics are crucial, only 45% say that they are successfully making use of key data.
Data Analytics Tips
Here are some tips for turning your data analytics program into a roaring success.
1. Start at the End
Data analytics puts the emphasis on the data, but to implement a successful data analytics strategy you need to begin with the outcome you want to achieve.
“I recommend starting your data strategy with a right-to-left approach, focusing on the desired business outcomes first, instead of the data, to support those outcomes,” explains Charles Holive, the managing director of data monetization and strategy consulting at Sisense, a business intelligence platform. “Everything else in the company is business-centered. It just seems counterintuitive not to approach data strategy in the same way.”
It’s best to start with a single question that you’d like answered about your business, like “What is the most popular product category on my ecommerce site” or “Which menu item in my cafe leaves the most waste at the end of the day,” for example. Once you have your most pressing questions laid down, it will be clear which metrics you need to track and what to do once you start performing regular analyses.
2. Small Steps, Big Impact
When you’re starting out with data analytics, look for small projects that you can implement fast and that have a big impact.
For example, you might begin by analyzing customer support response time and/or satisfaction ratings, because customer support has a significant impact on retention rates, and retaining existing customers is less costly than acquiring new ones.
This approach can essentially prove the value of your data analytics system, helping to convince any doubters among your stakeholders to support the project. Gathering support within your business is especially important in a small enterprise which is unlikely to have a dedicated data analytics department, since you’ll rely on representatives from each department to apply data analytics to their processes.
3. Use the Right Tools
It’s called big data for a reason. You can’t mine truly valuable insights from data unless you have enough of it. It’s almost impossible to manipulate that much data manually, so you’ll need to acquire an effective data analytics platform to do the tasks for you.
“Having the data isn’t enough anymore; businesses now must be able to use it,” says Larry Burt, a platform services specialist for CDW’s Small Business Technology Solutions Group. “The numbers can’t provide business insights or trends if no one understands them, which is why data analysis and visualization tools are critical.”
Look for tools that generate sharp visualizations that you can absorb and understand at a glance, so that you can identify patterns, trends and causation within your data. You’ll also need dashboard tools that every department can feed with their own data sources and KPIs, since, as mentioned above, you likely won’t be employing a dedicated data team at this stage.
4. Put Your Best Foot Forward
Successful data analytics rests on making good use of the data and data collection tools that you already possess. Instead of focusing on collecting new data, begin by connecting your existing data. Integrate it using a single platform that permits you to play with it, analyze it, and combine it in different ways to harvest new insights.
Business leaders “need to look at data first to succeed in their digital initiatives, rather than treating them as an afterthought to help with ad hoc projects,” says Mike Rollings, an analyst and VP at Gartner. “There are multiple feedback loops in play, and a change in one likely impacts choices in others – especially in volatile times.”
This requires looking at your “lowest hanging fruit” data in terms of availability. For example, you might turn to email newsletter open rates, click-through rates, and conversion rates; sales data; Google Analytics web traffic data; or information stored in your CRM.
Data Analytics Is Open to Businesses of All Sizes
Data analytics isn’t the privilege of large corporations and enormous enterprises. Small and medium businesses stand to gain just as much from applying advanced data analytics, and the road is open for them to maximize that value.
By finding the right tools, paying attention to small projects, letting the goal drive the project, and starting with the data you have, you can succeed in implementing data analytics in your business and tapping into the benefits of big data.
Image: Depositphotos.com
This article, "4 Tips to Derive Maximum Value from Your SMB’s Data Analytics" was first published on Small Business Trends
April 28, 2020 at 06:07AM
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Victor G. Snyder, Khareem Sudlow
