Data analysis benefits not just large organizations who have vast amounts of data but also smaller businesses who need insights that will boost their growth. In fact, small businesses may experience many of the same challenges that when it comes to data analysis, if not more. To understand, you need only consider the scale of resources and capital that a small business has access to, which is almost always considerably less than a major organization or corporation.
Data analysis — achieved through the proper collection, processing, and application of information — is not just about having the right tools and software. You also need access to experienced and skilled analysts or scientists. You need automation systems and processing solutions, and you also need a structured environment for even collecting data from sources in the first place.
Let’s say, for instance, you’re doing something remarkably simple like collecting email addresses from your customers. Initially, you must worry about data entry and accuracy, reliability of the systems used to acquire and store this information, and proper organization of the stored data. Only once you have the data is when the true “analysis” part of the operation starts.
At this point, data analysis sure sounds insurmountable. It begs the question: Is it worth the investment? Should a small business even bother to set up and maintain a data analysis strategy?
The answer is “yes” — because it offers so many benefits. It’s estimated that data analysis could increase workplace productivity in the U.S. by 1.5% and raise the national income by 30%. To help drive this point home, here are just some of the benefits you can expect.
1. It will help you save time
Small business owners have to wear many hats and balance their time between a variety of tasks and responsibilities. They don’t have access to the same resources as a large operation, which means they cannot delegate menial responsibilities, at least not as much. So it’s crucial that the tools and solutions they implement are effective and don’t waste time. Data is only as meaningful as how good you are at interpreting it. Small businesses often outsource the job or hire consultants to take on the tedious job. Using machine learning, automating processes, mapping insights to businesses strategy — all of these are crucial to increase the efficiency of a business.
2. It can unlock new insights
Insights and actionable intelligence are generated as a result of data analysis, which requires sifting through information to find trends and patterns or to come to varying conclusions. The significance of this cannot be overstated, especially for small businesses that have limited resources.
With the right data analysis tools, especially through the help of AI and machine learning, these systems can unlock and identify insights that would otherwise be off limits. For example, suddenly you can see, through historical data, what’s the best solution for a future campaign or promotion. You can even predict an outcome based on a variety of factors. Advanced analytics and predictive modelling has helped a manufacturer increase earnings 55 percent, according to this McKinsey report.
3. It can solve problems, errors, mistakes
One of the things that data analysis can provide is answers and in better context. This is highly beneficial for problems you may be having or mistakes you’re making. Sometimes, you might even discover inconsistencies you had no idea existed.
Analysis is especially great at highlighting mistakes in data input and management, particularly when it comes to data entry. It’s just a matter of looking at the information in various ways and identifying what’s happening where and when. For instance, maybe a cashier is having difficulty entering customer details at checkout. Or, maybe your system is auto-correcting information and, in fact, making it incorrect in the end. A thorough analysis can help businesses understand what is going wrong, where, and at which stage. At Duke Energy, an alert from the predictive analytics software warned employees that there was something wrong with the turbines, helping to save over $4.1 million.
4. It enables real-time or reactive interactions
Conventionally, a business would take action and collect performance data and customer insights to inform their movements, but this would only allow action after the fact. Immediately preceding a product launch, for instance, a company might be able to see how receptive audiences are, how much it sells or even whether or not it’s a failure.
Data analysis enables the use of details in real-time, allowing companies to predict performance or outcomes, but also to deal with events in-the-moment. Taylor Barstow writes in his article that real-time analytics is “shifting the paradigm to a place where businesses can proactively drive their own destiny, rather than just reflect on it”. A company could stop further production of a product that is unpopular, for instance. With small businesses, this is crucial because it can help eliminate ballooning costs, ineffective solutions and boost overall security of the business’ future.
5. Data-driven marketing campaigns are more successful
Small businesses also have to contend with the fact that they don’t have the expansive marketing budget large organizations do. As a result, they have to be more careful — that is, more targeted with what and where they spend money.
Data analysis can help reveal and unlock marketing insights so that campaigns are much more successful, but more importantly, so that they reach larger audiences and even new markets. A business might discover a demographic that previously seemed irrelevant, or even a new local region or area. Online tools like Moz, Kissmetrics and SEMRush help understand who your customers are, what they are searching for, whether you are fulfilling their requirements, and what kind of opportunities exist. Using these tools is absolutely essential for small businesses, who have lesser budgets to experiment with, and cannot afford to lose money through irrelevant targetting.
6. Improved personalization
In a survey, 31% of consumers said they wish shopping experiences were much more personalized to them. Another similar report revealed that only 22% of shoppers are satisfied with the level of personalization they currently receive. What’s the takeaway here?
Consumers want more personalized and relevant experiences, which is something that is incredibly difficult for any small business to provide. A company like Amazon or Walmart has access to the necessary resources and a huge collection of data to make this happen.
Small businesses can unlock this opportunity through the real-time insights and structured data extraction that analysis systems provide. They can build interactions and engagements based on previous interactions with a customer. In fact, proper data analysis is what allows the collection and further application of such data. IBM reports that 62 percent of retailers find that using big data and analytics is giving them a competitive advantage over other organizations.
7. It will help you save money
Data analysis benefits need not be limited to those with an army of in-house data scientists. Small businesses can easily access insights through free software, open-source tools and inexpensive solutions designed exclusively for them. Platforms like Blendo make it easy for even small businesses to implement data analytics on their storefronts. Using free tools like Wolfram Alpha (also comes in a pro version), or open-source tools like OpenRefine and RapidMiner, helps you analyze information and derive insights and information quickly. ClearStory Data is designed for small enterprises and helps convert data into effective stories. Microsoft’s Power BI can help small businesses identify opportunities quickly and easily, helping them reduce costs and take data-driven decisions. Hiring a freelance data scientist for specific, short projects helps business owners save on hiring a data scientist full-time. It also helps them take the load off their hands, so that they can get on with daily operational and management tasks.
In the end, data analysis, big data solutions, and the many automated technologies can offer considerable benefits to small business and small biz owners. Perhaps the greatest is the amount of time and resources you get back as a result of adopting the technology. The insights extracted from various datasets can provide ample opportunity for growth, improvement, and success. It’s all about collecting the right information, finding new and innovative ways to look at it, extracting insights, and converting it into something usable. Data analysis allows a small business to compete at big business levels, and that alone is worth the cost.