How big data can give you insights that will help your business
This article was published in First Voice
Using big data means expensive loyalty card schemes and large teams of IT analysts, right? Wrong. In fact, small firms may be ideally placed to make use of it in running their businesses.
To many small business owners, ‘big data’ may seem like something only retail giants can manage, or conjure up images of rooms of supercomputers analysing massive volumes of data to find a cure for cancer. In reality, companies of all sizes generate huge amounts of data all the time, and by using the right approaches it’s possible to gain insights that will help your business.
Bernard Marr, Data Expert at insurance company Hiscox and head of the Advanced Performance Institute, believes many small businesses may be missing a trick by not making the most of their data. “Any small business not using it for decision-making or improving their operations could be left behind,” he says.
He cites a small butcher based in north London that had been affected by the arrival of a supermarket. As it was difficult to compete on price, the owner fitted inexpensive sensors inside the store window to monitor pedestrian footfall via people’s mobile phones. The findings proved the busiest time outside the shop was between 9pm and midnight, when passers-by were heading to, or leaving, two nearby pubs.
Using Google Trends, a free online tool, the owner investigated what popular food searches were, and decided to open for a few hours in the evening selling pulled pork burgers and premium hot dogs. “Now a significant chunk of revenue comes from this small opening slot and profit margins are much higher,” explains Mr Marr. “And they’re using up meat that they weren’t before.”
Despite success stories such as this one, it can be difficult to know where to start. But rather than amassing data simply for the sake of it, it pays to know your end-goal. “The best way to start is with your user case,” says James Blake, CEO and Founder of Hello Soda, a data analytics company. “Not all data will be relevant. If you’re a swimwear company, weather data’s important, but not if you’re a bank.” Take your customer database. How do people prefer to be contacted, and when?
In fact, small businesses arguably have the advantage when it comes to using data to come up with business insights: they already know their customers well, and are not bogged down by having to go through multiple levels of approval if they want to act. “One of the benefits of big data is that businesses can make decisions in real time,” explains Sue Daley, Head of Programme for Big Data, cloud and mobile at TechUK.
Your customer data – which could be from transactions, weblogs, social media interactions or GPS positions – is a start, but you can also amplify these findings by using publicly available data. “For example, [environment agency] Defra has just released thousands of data sets,” she adds.
Once you know the insights you’re after, how do you query that data? “First-generation business intelligence tools used to create reports, but they were complicated, and needed a budget and an IT department,” says James Eiloart, Senior Vice President for EMEA at Tableau Software. “Also, many companies have been doing this in Excel. While it’s great for some things, it’s not a tool that allows you to truly ‘see’ the data.”
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