How Your Small Business Can Use Data

If you are in the business world, you likely already know that big businesses are making major use of data to drive their decision making, value propositions and marketing. They can provide customers with more targeted experiences thanks to an immense amount of data. However, if you run a small business, you may think this is out of reach for you. The goods news is that anyone can leverage data.

Gathering Data

The first step in using your business’ data is to collect it. There are a number of sources of data you already have access to or can set up with relative ease. These are some examples:

· Transactions: Whenever someone makes a transaction with you, it is an opportunity to collect data. You are likely already capturing the item sold and some basic information about the shopper. Consider examining what was purchased, what items were purchased together, when the transaction happened, what the payment method was and whether any discounts applied.

· Traffic: If you have an online business, you are likely already tracking your traffic. Make sure to collect data on the flow between pages, drop off rates, conversion ratios and other similar data. You can similarly monitor a brick and mortar store. Examine peak foot traffic, the highest times for conversions etc. Combining this with your transaction data can lead to major insights.

· Rewards Program: Have you ever wondered why some brands offer loyalty rewards programs? One of the reasons is to encourage repeat business. However, another major reason is data. It is a way to get more demographic information about shoppers. You can also associate purchases with a specific person or household.

· Third-Party Sources: There are numerous third-party sources that can be combined into your data pool. These include independent loyalty programs and consumer researchers. While this data can be more challenging to handle, it is also typically much broader than what your business would be able to collect alone.

By gathering data from multiple sources, you can develop a comprehensive database that you can use to guide decisions. Even a small business can access a surprising amount of relevant and useful information.

Organizing Data

One of the key challenges with data is managing it. If you think about the sources above, it is clear that you could quickly be overwhelmed with raw data. That is where data wrangling comes into play.

This is the process of cleaning and organizing data to make it more usable. If you have only a small data set, you can likely do this process manually. You’ll need to cull bad data, clean up the data you are using to make it easy to analyze and organize it in a useful format.

However, the reality for most businesses is that they either have too much data or not enough time (or both) to be able to manually wrangle data. Fortunately, much of this work can be done automatically. Furthermore, there are many great tools that can help with the process out of the box.

Making Data-Backed Decisions

Finally, it is time to use data to drive your decisions. One of the primary ways that big data is used is to create personalized shopper experiences. This can be simple. For example, you could send out promotional emails to buckets of your customers based on their shopping habits. However, it can also be more complex. For example, you could deliver a promotional discount to a customer around the time he or she would typically visit your store, motivating a larger purchase.

You can also make strategic decisions based on your data. You may find that your peak business hours are after 5 PM. Therefore, you can likely minimize your operating hours or reduce staffing before then. Frankly, the sky's the limit for insights you can glean through data.

With the power of data, your small business can become more successful than ever. Discover more and learn how you can make the most of your data.