Of all the various global technological innovations and advancements that are unfolding today, one that has gained some of the most momentum is Big Data combined with predictive analysis. In the current era of the Internet of Things (IoT), there are more interconnected systems than ever before that are currently generating, gathering, and transferring massive amounts of data, bringing about huge changes to the ways that businesses around the world operate. Predictive analysis is the latest market trend designed to point directed traffic to your model.
Data analysis can be beneficial not only for large organizations with huge amounts of data but also for small businesses that could use insights that can help to boost growth. In fact, many small businesses experience a range of challenges when it comes to data analysis and can often benefit even more from gathering actionable insights on the market, their customer base, and future predictions in order to take their business in the right direction and facilitate growth for the future.
So, is data analytics a good investment for small businesses? Is it worth setting up and maintaining a data analysis strategy when you run a small business? Let’s take a look at some of the main ways that data analytics can support a small business to grow and succeed.
Unlock New Industry and Customer Insights
Actionable insights and intelligence are gathered as a result of data analysis, which involves sifting through information that your company has gathered through data. It involves examining this information to find various patterns and trends that you can use to come to a variety of conclusions. This is a significant step for businesses that have limited resources and cannot afford to go by guesswork alone when it comes to making important business decisions.
The right data analysis tools can help you unlock and identify insights that you may not have had access to otherwise. For example, historical data can allow you to see the best solution for a future campaign or promotion, while predictive analysis can make it easier for your business to determine future marketing campaigns, product lines, or other business changes that are likely to be successful based on past trends and consumer behavior. Click here to learn more about the importance of predictive analytics in marketing and how it can drive performance when done right.
Save Time When Running Your Business
Time is often a big problem for many small business owners who find themselves responsible for running almost everything. If you are wearing several different hats as a business owner and juggling your time between a wide range of responsibilities and tasks, you are not alone. However, when you don’t have the same access to resources compared to larger organizations and find it harder to delegate certain tasks and responsibilities, one of the most important things to do is find tools and solutions that allow you to save time and make the best decisions for your business quickly. And when it comes to data, it’s only as meaningful as how well you can interpret it. Outsourcing the job or using data analysis tools designed for small businesses can help you reduce the amount of menial work you are faced with and get the actionable insights from your data to put to use straight away.
Enable Reactive Interactions
Traditionally, businesses would take action and collect consumer insights and performance data that allow for action after the fact. For example, immediately after a product or service has been launched, the company may be able to use the data to see how receptive customers are to the idea and whether or not it is selling as well as expected. However, this can be a very risky situation to be in for small businesses who might not have the time or resources necessary to take this trial and error type of approach. On the other hand, data analysis tools enable the use of details in real-time which allows businesses to deal with events at the moment and more accurately predict outcomes without the need to take a huge risk.
Avoid Errors and Mistakes
One of the biggest benefits of data analysis for small businesses is that it can provide more context and much clearer answers. This can be extremely useful when it comes to helping small businesses solve problems or avoid making costly mistakes. And, data analysis can sometimes lead you to discover inconsistencies or past errors that you were not previously aware of. Data analysis is particularly good at noticing and highlighting errors in data input and management, or figuring out what is going wrong if the same problem keeps repeating itself.
Data-Driven Marketing Has Better Success Rates
Most small businesses will have to come to terms with the fact that when it comes to marketing, they do not have the large marketing budget that the larger organizations enjoy. As a result of this, many smaller businesses need to be much more careful when it comes to how they are spending their marketing budget, leading to a need for a far more targeted and precise approach. The use of data analysis can help small businesses put their marketing budget to much better use, unlocking a range of useful marketing insights that can drive future campaigns and ensure that they are more successful and reach the right audiences. For example, data analysis could help your business discover a demographic that might not have seemed relevant in the past thanks to tools that you can use to determine who your ideal customers actually are based on data.
Save Money
The good news is that the benefits of data analysis can stretch to anybody and are not reserved for those with a huge team of in-house data experts. Today, there are various tools available for small businesses, including inexpensive or even free data analysis software programs and open-source tools that you can put to use in order to start collecting actionable insights through data that you can use to improve the direction of your business.
Many small business owners also benefit from hiring a data scientist on a freelance basis to work on short-specific projects which can be much more cost-effective than hiring data scientists as full-time employees. In addition, working with a freelancer or outsourcing the work to a company offering data analysis can help you save money in other areas, or work on increasing revenue by providing you with more time to focus on the daily management and operational tasks in your business.
Improve Customer Experience
Today, surveys show that over thirty percent of customers would prefer a shopping experience that felt more personal to them, and only just over twenty percent of customers are currently satisfied with the level of personalization that they receive from the brands that they shop with. It’s clear to see that personalization is something that is becoming increasingly more important to customers, but it’s also quite difficult for small businesses to provide. Personalization levels such as those offered by Amazon, for example, might seem very out of reach for your small business for a long time.
However, real-time insights and structured extraction of data can help you further personalize the shopping experience for your customers. Data analysis systems can help you build interactions and engagements that are based on your previous interactions with a certain customer, and make it easier for you to ensure that customers are marketed to on a more personal level by taking into account their past behaviors and preferences.
Boost Customer Retention
One of the key advantages of providing a more personalized customer experience based on data analytics is that it leads to a higher level of customer satisfaction, boosting customer retention levels and increasing the chance of customers becoming advocates for your brands. Data analysis allows you to learn more about your customers on a deeper level, providing the information that you need in order to tailor the service that you offer them, keep them happy, and encourage them to return to your brand time and time again.
You can also use predictive analytics to improve customer retention by comparing the actions of loyal customers to one-time customers and examining the differences. Using this information, you can come up with a model to retain customers that you can use as an early warning system for when a customer may be losing interest or considering a competitor. Using the information that you already have on your customer, you can put together content, incentives, or an engagement strategy that is designed with them in mind in order to help keep them engaged.
Data analytics isn’t just for big businesses – it makes it possible for small businesses to benefit in many different ways. By gathering and analyzing data right from the start, small business owners can make better decisions for the future, analyze the market and their competition, figure out their ideal target customers, get to know and retain their existing customers better, and build their industry reputation.
