Understanding Big Data – Why is it Important for Small & Medium Businesses?
Data is the information you collect from your customers. That’s more or less the basic definition of it. Big data, though, is something else entirely. It represents the modern era of digital strategizing and is growing at an alarming rate. Data will grow by an estimated 1.7 megabytes every second by the year 2020.
Business owners need to understand big data that goes beyond the general layman’s understanding. The four points below provide a deeper understanding.
1. Understand How to Use Big Data
Data is information; how you use that information is very critical. Fortunately, understanding big data doesn’t require a four-year degree. The advent of the latest business intelligence (BI) tools offer predictive analytic features. You just need to understand big data enough to determine the optimal metrics and key performance indicators. Once you have that down, plug it into your BI tool, and the output will reveal the latest trends regarding your consumers and their spending behavior.
2. Data Has to Be Specific
Focus on variety rather than quantity. You also need more specific data. An example would be the number of female consumers that applied for your rewards program on a weekend. This is far more specific than just the total number of people that signed up for the program.
Most BI programs these days can collect specific data sets acquired from both structured and unstructured data. This gives you more defined metrics that help drive business decisions. Using the above example, you can drive signups even further by sending out weekend-only offers using copywriting language that appeals to women.
3. Look Beyond Company Data
The data you collect from your own consumers provide valuable insight regarding that demographic. This will get you far, though to really know the ins and outs of your customer base, you need to look beyond.
More companies are diversifying their data by acquiring third-party data. This is information vendors sell to companies. Third-party data may also come from sponsors or even competing companies that mutually agree to share data. In a 2015 survey, 61% of surveyors cited third-party data as having a major impact in their ROI initiative.
Third-party data reveals insights about the demographics within the industry as a whole. You can compare it with in-house data to determine differing or related trends with your specific customer data.
4. Data Is a Reflection of Real People
Data is not just about random numbers on an excel sheet. Treat data as a mirror that reflects the psychological makeup of your customers. What does this mean? Perhaps the data shows a high ratio of millennial and even some generation Z consumers. What conclusions can be drawn from this?
Does your marketing material frequently include memes, pop culture references, gamification, and emojis? Such informal approach obviously appeals to a younger crowd. With this information, how can you revise your approach to appeal to an older audience? Alternatively, you may decide to double down to cater to millennials even further.
This article is contributed by Lucy Boyle (@BoyleLucy2), who is a full-time mother, blogger, and freelance business consultant, interested in finance, business, home gardening and mental health.