If you haven’t already heard the phrase Big Data before, you soon will. Even if you have, you are probably thinking it’s only relevant to big businesses, not your small operation. But, you’d be wrong, Big Data is not just about big business, it’s important to small businesses – even start-ups can harness its power. Big Data is about to change your business and your world.
There are two types of data, structured and unstructured. Structured data is more formal information such as names, addresses, numbers, dates; it’s the sort of information you are used to dealing with, information created either by employees entering information into a computer, or machine generated. It accounts for only 20 per cent of Big Data, the other 80 percent is unstructured. This is everything else including photographs, videos, website and blog content, all the data generated by social media sites, text messages, recorded conversations, all your corporate files, email, logs, surveys, reports, all Google images created for Google Maps and Google Earth – the list goes on.
Digital information is growing at a frightening pace – television, radio, print, images, video. We’re adding 2.5 quintillion, that’s a billion, billion, bytes of data, or 2.5 billion gigabytes, added to the world’s total every day!
A pregnant woman gets an ultrasound scan and already her child has a digital imprint – before it’s even born. By the time it comes into the world the data generated relating to it is enough to fill the Library of Congress approximately 70 times over. We live in a new world – 90 per cent of all digital data was created in the last two years!
So what’s that got to do with your small business? Well consider how your competitors might be using Big Data. Walmart gathers 2.5 petabytes (that’s over 5 million gigabytes) of information from customer transactions every hour. It does this to learn more about its customers’ habits – what each person bought, what time of day the purchase was made, what other items they bought at the same time, what method of payment was made, their postal code and much more. Understanding these buying patterns helps with inventory control, product purchasing, marketing, merchandising, staffing, opening hours; and more importantly provides information about each customers’ personal preferences. This allows the store to target certain products and promotions to particular customers.
Micro businesses are already using data by connecting with customers through sites such as Facebook, Pinterest, and online stores. Facebook for instance can provide you with information on the likes and dislikes of visitors to your business page, their age, how many people are talking, sharing, or making comments about you and your products. You don’t need to delve as deep into the data as Walmart, but by tracking simple Facebook data you can discover what day of the week, and what time of the day you should post a message, or a blog, to ensure you reach the greatest number of people. Big Data at work for your small business.
Data and figures surrounding consumer interaction can tell you very specific things including: gender preferences; time/day spending preferences; trend buying; and social media interaction (i.e. what’s being talked about). This can help you reach a more targeted audience or buyer group. Understanding online and mobile buying patterns is becoming increasingly crucial for small businesses.
A generation or so ago, local shopkeepers knew their customers’ likes and dislikes and could recommend items that suited them perfectly. Over the years that personal service has been lost; Big Data, whether we find it intrusive or not, is once again providing that personalized, relevant and targeted experience.
You probably collect data daily but unless you are analyzing it, it’s a cost rather than an asset. Your competitors are very likely mining their data for clues as to how they can get closer to, and interact with consumers. Ignoring Big Data will be a risky strategy no matter the size of your business.
Above, we provided an overview of why Big Data is relevant to your small business, let’s now provide an example of Big Data at work in the small business world and show how you can begin collecting, tracking, and analyzing information on your customers and potential customers.
Any small business can find Big Data valuable, but it’s more immediately appealing to retailers, both brick and mortar and e-commerce. We live in an online, and increasingly mobile world where our customers can connect with us and their friends like never before. According to Internet World Stats (IWS) there are over 2.4 billion Internet users worldwide and the International Telecommunications Union estimates there are 6.8 billion mobile phone subscriptions worldwide – people are talking, texting, searching, checking prices, reading reviews and all the time leaving their unique footprint for you to analyze and come back with a product or service that speaks to them directly.
Over 40 million people use the Foursquare app to keep up with and meet friends. Its website states, “…when you’re looking for inspiration for what to do next, we’ll give you personalized recommendations and deals based on where you, your friends, and people with your tastes have been.” At any given minute people on Foursquare are complaining about the lack of WiFi at a local coffee shop, lauding the pulled pork sandwich at a cafe, or raving about an art exhibit. This is Big Data at work right in your store, your restaurant, or small business. Information is out there circulating – and it’s extremely valuable. The advantages gained by collecting it, analyzing it, and extracting meaningful value from it however, will go to those businesses that see the importance of getting to know their customers more intimately than we could have ever imagined, even a decade ago.
Discover what data you are generating (e.g. transactions, financial, through equipment, social networking sites, online stores, blogs, sales team, Internet service provider information etc.)
Take advantage of the data you already have, or can readily obtain. Where are your leads coming from? Monitor online reviews. Track social media engagement. Carry out surveys of existing customers. Start to fully understand your market.
Use the information you have available to offer a personalized service, based on your understanding of your customers.
Disseminate data beyond management – your sales and marketing team need to know what metrics are driving your business.
Consider working with a third-party to help collect and analyze your data, rather than postponing it until you have sufficient resources – that may never happen.
George Tzanetakis from University of Victoria says, “Eventually, everyone all the way down to individual customers will be using some form of Big Data analysis, so it’s simply a matter of time before your business bites the bullet and starts experimenting with Big Data.