Data tools can help you acquire the valuable customer insights that inform Fortune 500 companies’ strategies–once you understand the basics.
Welcome to the age of Big Data, the gathering and analysis of both in-house and acquired information to further your business goals.
“Data analysis” may sound like a wonky scientific process that happens within huge corporations. However, in practice, it’s simply the gathering and interpretation of information found in everyday business records, no matter how large or small the enterprise. The goal is to gain insights that can help you identify new prospects, refine your everyday processes, and better serve your customers.
Pinpoint your data-analysis goals.
Data-mining tools can help a business cut costs and build revenue in almost every area. Still, you, as a small-business owner, may have trouble understanding where and how to start. In fact, of more than 85% of companies attempting to create a data-driven strategy, only 37% say they’re succeeding.1
Consider starting with a focus on your customer. Identify pain points in your sales and marketing programs, then ask yourself what sort of actionable insights can address these challenges? These could include finding new ways to nurture prospects or reducing the cost of acquiring a new customer.
Once you identify what you need from your own information and third-party data services, you’ll have an easier time navigating the data-analysis landscape.
Data analysis in action.
Still not totally clear on how data analysis works? Consider these scenarios:
- A restauranteur may find that one waitperson is selling far more beverages than his colleagues. Armed with the statistics, she may have him discuss the secrets of his sales success at the next staff meeting
- Here’s a more complex application: A real estate agency handles the renting and maintenance of corporate apartments for owners in a small city. This firm could use records such as advertised and actual negotiated rental rates and vacancy rates, as well as past weather records and trade-show schedules to provide its clients with rate adjustments and revenue projections for the coming quarter or year
Likewise, this business could compare invoices from maintenance firms working on its clients’ property against local and national rate averages and make needed changes. Doing this can reduce the owners’ overhead and increase their profits–a clear return on their data-analysis investment.
How can a vendor harness your information?
With the cloud paving the way for easier and less expensive information access, these and other approaches to Big Data are becoming easier than ever to manage.
Data-mining application developers and service providers can approach small-business information analysis in several ways. A service like Google Analytics, for example, crunches your website statistics to identify behavioral trends, such as the bounce rate (how many visitors visit only a single page of your site), and on what pages or links consumers are clicking.
Another approach is to merge your existing records with third-party information to make comparative analyses and recommendations—as did the previously mentioned real estate agency. Yet another method is a service that extracts data from platforms such as Salesforce or QuickBooks. In all of these cases, you benefit from the vendor handling the technology for you.
Start small and branch out gradually.
You’ll find the best Big Data strategy is, ironically, to start small. Use the tools you select to answer a few simple questions about your customers’ traits and behaviors. Once you gain the confidence concerning how to see your data in a new way, you can branch out to other aspects of your business, including human resources, finance, and other operations.
Want to learn more?
Talk with an M&T Business Banking relationship banker to discuss the many ways you can grow your firm. Visit a branch or call us at 1-800-724-6070.
This article is for informational purposes only. It is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. Please consult with the professionals of your choice to discuss your situation.