We hear a lot about data in business. Big data, internal data, external data, smart data, the list goes on but what does it really mean and why would it be relevant to your small business? In short, data is the experiences that you collect through the operation of your business which translate into numbers. Statistics surrounding your customers, your sales, your online engagement, your stock control. Any part of your business operations can be broken down into data in order to learn and make improvements in the future.
It’s fair to assume drilling down into statistics is the domain of larger businesses but truly, data is hugely important to start ups and growing businesses. In particular because it’s happening all the time. Each day of your business, you’re amassing data, experiences, statistics. They belong to you, they refer very specifically to your business and they are your most valuable pieces of information to mine in order to continue to grow. The absence of using this precious data would be a real loss. So what type of information is actually useful to a small business and how can it be used to your advantage?
Here are a few things to bear in mind as you dip your toe into the data waters.
Where can I find my business data?
A prime area to draw data from is sales. To whom are you making sales? When do your customers buy and what do they buy? What is your customer demographic? Age, income, location, interests. Putting together a map of who you sell to, and filling out as much peripheral information about them and how they act around their purchase allows you to develop markers for your ideal customers and how you might reach them. Perhaps you find your online sales boost in the evenings? Or your customers are only likely to engage in a sale if you offer them a discount? Amass as much sales information as you can and you’ll be much better placed to set a strategy to attract more customers on the conditions you’ve identified.
The curse of social media companies knowing everything we do is the gift of small businesses. Social media platforms offer statistics and measurements that are invaluable to any company. Whether you decide to maintain a presence on Instagram or Twitter, LinkedIn or Facebook, you can refer to your dashboard to find out endless information about your ‘followers’. Perhaps you want to deep dive into who engages with your profile online (age, sex, location, interests) so that you can potentially build your following? Or you may plan to roll out a marketing campaign and want to check how effective it is (following engagement, impressions, reach, referrals, response rate)? Whatever the goal, you have remarkable amounts of information at your fingertips. Be selective. Decide what your primary markers for success are and set up your KPIS (Key Performance Indicators) around them so that you’re only tracking certain statistics at any one time. Review your findings regularly and use them to inform your next steps.
Syncing your website to Google Analytics opens the door to in-depth online statistics. Your site host itself may offer you top line statistics (users, time of day, leads, abandoned basket etc) but don’t forget Google Analytics which offers far more in the way of global online statistics. You can look into which keywords are bringing people to your site, what competitor sites are doing, landing pages, exit pages, and real time statistics that can be hugely insightful when read alongside your marketing strategy. The opportunities to learn here are vast so be narrow about your goals and work out from your findings.
Gathering customer data via a mailing list and staying in touch with mailers or marketing updates is a great way to gather data. Viewing open rates, click throughs, finding out when people engage with your marketing or whether they forward it on to others can be a really useful way to establish what content is working for your customers, when and why. You can also view your email data against what others in your industry and market are doing to keep you on track.
Census information is available to everyone and it’s useful to view this general population data and weave it against the sales, marketing, social, and analytics information you’ve gathered specific to your business. Remember of course that your competitors also have access to this data so try to use it in relation to your own customer behaviours and business goals to maximise its value.
Once I have this data, what do I use it for?
Learning more about your customers
Your customers are specific to your company, to your products, and to your services. Learning as much as you can about who they are and what they need and want is the best way to make use of your data. Social media and sales data combined can do a lot of work in putting together clear ‘customer personas’ which you can use to target future customer groups and grow your reach. Understanding your customers and their sensitivities whether those relate to price, to politics, to product, can keep you one step ahead of your competitors.
Learning more about your competitors
It’s key in business to understand who you are up against. Even if your product or service is markedly difference to anything else on the market, there are always indirect competitors whose actions will impact your sales. Gathering data to really get to know who your competitors are is very important. What products and services are they selling? Where? To whom? At which price points? How do they operate online? How are they growing online rankings – via social media engagement, via marketing campaigns? The more you know the better.
Making improvements and efficiencies in your company
All of the information you gather should be used to make changes, large and small, to your own company. These might be efficiencies in your e-commerce system, in your stock management, in your shipping process. They may be improvements in your marketing strategies, in your customer targeting, in your crisis response. Whatever you learn from your data, use it to make practical changes that will produce efficiencies and growth in your day to day business.
Keeping on top of trends and opportunities
The data you amass will act as your crystal ball for what’s happening in your industry and your community. You’ll begin to see patterns emerge, trends that you can forecast and opportunities that you can better prefer for. You can’t be ready for everything but information is power so the more you gather, the more informed you keep yourself and the better placed you will be to rise to whatever challenge is ahead of you.
Data can become overwhelming when you first start to consider all that it means to a small business but we prefer to look at it as a secret weapon. In most cases it is freely available to you, and neatly packages up so much valuable information to allow your small business to grow, to pivot, to alter its path accordingly. Taking the time to get familiar with whatever data is relevant to your business is a step in the right direction.
Whatever your business idea, whether it’s just something you’ve been mulling over or whether you’ve taken some steps on the entrepreneurial path already, we’d love to help. Read some of our Go For It Success Stories and get in touch . Our business experts will be delighted to hear from you and to talk you through everything you might need to know to move forward with your business concept.