SMEs must navigate the big data minefield

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Date: 28 April 2020

Big data concept with graphics over a cityscape.

There used to be a misconception that only major corporations could benefit from using big data. In recent years, it has become increasingly clear that small businesses can utilize big data as well.

This is one of the reasons that data analytics consulting services have become so popular in recent years. One recent survey found that 67% of small business owners invest at least $10,000 a year on data analytics.

However, some business owners are still sceptical about the viability of big data. These businesses should educate themselves about the applications of data and the best ways to incorporate it into their strategies. Once they do, they will be more likely to embrace it.

Brief overview of big data for entrepreneurs

Before small businesses can take advantage of big data, they must understand what it is. Unless you're a marketing expert, you may not be familiar with the concept of big data.

The confusion is understandable since it is not easy to explain the average person. In many cases, major technological developments feel like they have sprung from the pages of a science fiction novel. A strange terminology full of acronyms is often created virtually overnight. Often, the average person doesn’t understand its meaning or its possible connection with our everyday life. However, these abstract concepts impact us in profound ways. One example is the concept of big data.

When we talk about big data, we think of a huge accumulation of datasets. This is exactly what it is, but the concept is more complex for the organizations that need to work with it every day.

Big data refers to enormous sets of data from different sources that cannot be organized or structured by merely utilizing classic databases. The mistake small businesses make is assuming that big data has no impact on them. Nothing could be further from the truth. Small and medium-sized enterprises can also benefit from data analysis. Companies that fail to leverage the capabilities of big data risk losing their competitive edge to tech-savvier counterparts.

How to implement big data in a small company

You can use big data to grow your business in unimaginable ways. You can analyse the results of different business functions and use these insights to create new business strategies.

One of the biggest benefits of big data is in the arena of marketing. Big data marketing strategies need to be as holistic as possible. Valuable data is derived from many sources and they all provide invaluable information that can be incorporated into new marketing strategies.

The benefits of big data in marketing cannot be overstated. A few months ago, James Warner, a Magento Certified Professional and big data expert wrote an article in Business.com about the merits of big data for marketing.

How can big data improve marketing strategies? The opportunities are endless. Companies are using big data to improve their digital advertising campaigns, identify sources of contention among customers to boost retention and identify marketing channels that provide the highest ROI.

You can find numerous case studies of companies that have used big data to improve their marketing strategies.  Although these case studies typically look at larger companies, they still have very useful insights for small business owners. Netflix is a stellar example. They have used big data to create highly optimized user experience strategies.  Small business owners can use big data to improve the targeting up their marketing strategies just as effectively.

Countless forms of data (both structured and unstructured) can be obtained through new technologies, such as behavioural patterns in social networks (likes or comments), audio files, response to forms, website log file and user-provided information.

Creating a big data strategy for a small company requires incorporating specialized software. This software enables businesses to collect and analyse data to formulate far more effective business strategies. These applications should be programmed to work effectively in the cloud. Online management and accounting companies allow companies to implement and develop big data strategies without needing to make large financial investments. They can be managed by remote teams any time of the day and part of the world.

Examples of big data strategies with small businesses

Big data collection and processing help companies improve the efficiency of their operations. These practices allow companies to detect possible weak points, redirect strategies and locate new business possibilities. It is a question of measuring the needs of the clients and offering them what they need at every moment.

The following sectors have benefited tremendously from big data:

  • Retail sector: The retail sector is one of the industries that has most benefited from big data analysis. Valuable data can be obtained from customer loyalty programs, quality surveys and purchasing records. This data allows us to understand the buyer in-depth, forecast their behaviour and anticipate their future needs.
  • Tourism sector: The tourism sector has also utilized big data in ingenious ways. Hospitality companies accumulate data from customer profiles, along with answers from customer satisfaction surveys, comments on reservation pages and images posted on the internet. All of this data can be used to design new marketing strategies and correct undetected defects. Marriott is one of the hospitality companies that has used big data to great effect. They have developed a big data strategy that helps them set new records in international sales and improved customer satisfaction tremendously. Smaller hospitality companies can accomplish similar results.
  • Health sector: the health sector accumulates a large volume of data, such as patient records, therapies, prescribed products, etc. Big data can quickly analyse all this information and provide results to improve health services or expand potential markets in the health industry. Many small hospitals are using big data effectively.

Of course, these are just a few examples. Plenty of businesses can benefit from big data.

Copyright 2020. Article was made possible by site supporter Kristijan Glas

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