Last week’s blog post about targeting your clients spoke a lot about using your data, but from where are you collecting this data to use when planning your marketing? In a perfect world a multitude of data accumulated by other individuals would be at your fingertips. Your job would be to merely sift through the data choosing the marketing pieces with the highest return on investment, determine a budget and make a plan. How easy would that be? You could probably plan an entire years worth of marketing in under an hour.
Good News, Bad News
The bad news is that in most markets, even in the franchise realm data gathered far and wide is often too vague for anyone to rely on at the local level. This doesn’t mean that you should discount the data provided by these larger entities. Use their data to spot trends, but collect your own data to make decisions about your business.
Large corporations regularly use big data to get insight on consumer behavior, target their marketing and to boost revenue. But small businesses typically do little with big data. Until now, most owners have considered it too difficult, too expensive and just plain intimidating.
That’s changing. These days an increasing number of small businesses are collecting and crunching volumes of data to lift their sales.
“Small businesses shouldn’t be scared off by big data,” says Steve King, partner at Emergent Research. The growth of the Internet, wireless networks, smartphones, social media, sensors and other digital technology is fueling a big data revolution. Big data was the exclusive domain of statisticians and large corporations but not anymore.”
What can a small business do with big data?
For a start, it can boost efficiency and sales.
King gives an example. The Spillers Group, a company that owns three restaurants in Dallas, uses a data application called Roambi that enables it to share among management all the business information it collects, including point-of-sale data, labor metrics and accounting numbers. With Roambi, Spillers can link managers’ pay to their restaurant’s performance. The app has also cut Spillers’ labor costs 10%, saving thousands of dollars every two weeks.
“Before their data was a hodgepodge,” King says. “They had sales data in one place, supply data in another place and staffing data in another—and they never looked at how to bring them all together. So they were inefficient when it came to scheduling and supplies. When they brought the data together they discovered quickly they could cut costs by making minor changes. That’s a huge win.”
Small businesses that use data intelligently can do business better.
They can improve pricing and just-in-time supply chains. They can find cheaper suppliers that are closer to their location and that offer more price transparency. Small businesses can also use data to tailor products and services to individual customers.
Businesses can identify key customers and treat them better.
They can understand customer patterns, know when they’re likely to come in and reward them for multiple visits. “All this big data is helping to level the playing field for small businesses,” King says. “Even though the field is still tilted in favor of big business, big data is a way for small business to fight back. A lot of this stuff is made easy for small business, like Google GOOG -2.3% Analytics. You don’t have to be a data scientist to use these tools and get good insights.”
Why Data is Important
The more you know about each of your leads, the faster you can zoom in on the strongest prospects, engaging them with content that’s personally meaningful to them.
- Quickly identify and rectify problems
- Data can be used to decide which products and services should be marketed and which should be eliminated.
- Aids in assessing employee performance
Accumulating data is a necessary evil. The alternative is to run your practice on a wing and prayer, which is not a strategy we’d recommend.