How Small Businesses Can Leverage Big Data
The concept of ‘big data’ is often seen as something that is out of reach for smaller businesses.
But it is actually the case that in recent years, SMEs have been able to find ways to utilise big data in ways that are just as effective as those used by large companies.
Big data can be used to:
- understand market trends
- analyse customer patterns and behaviour
- examine customer preferences, and
- mine other useful insights across a variety of different topics.
Undoubtedly, big data is used to help small companies make smarter and more effective decisions and can be rolled out in various departments. Here, we are going to take a look at some of the key ways that small businesses can utilise big data in a way that is effective for them. To do that, it is important first to understand how big data can be beneficial to SMEs.
Small businesses may need big data - It is all too common for businesses to believe that they are simply too small for big data. But businesses of all sizes can find extensive value in big data; the important thing is understanding what it can actually do to benefit you. In virtually all instances, the value of big data comes in the fact it can be used to provide actionable insights for business decisions. When you understand that, it is easy to see why big data can be useful for SMEs just as it can for larger businesses. After all, SMEs perhaps even more so than big businesses, must make smart decisions. Big data can provide useful feedback to make those decisions easier.
Identify key trends
For businesses in any industry, being able to stay ahead of trends is essential. Yes, any company can notice a trend and ride it. But it is those businesses that are ahead of the curve, and can predict what is going to happen that can take advantage of the situation and get ahead of their competitors.
“When we talk about market trend analysis, it’s much more than checking overall demand fluctuation,” says Daniel Schneider, at Similarweb “a thorough analysis investigates all aspects of your market. You’ll get a deep understanding of consumer behaviour, its impact on the market in general, and your business in particular. Usually, the first signs of a shift show themselves through social media or engagement metrics. This crucial rise or fall in traffic, engagement, or variation in demographics is what reveals your competitive advantage.”
If you can analyse more data than your competitors you can get ahead of their position and understand where the market is going. This can allow agile SMEs to modify their position and be ready for shifts in the marketplace.
Improve operational efficiency
It is natural for all businesses to strive for better operational efficiency. Ensuring that staff are able to work at their optimal speed and effectiveness is a vital way to make sure you are getting the most out of your business. But you might not be aware that this is something that big data can help with as well. Small businesses can easily establish their key performance indicators and then track this data over a period of time. This allows you to analyse your current strategies and test their effectiveness over time. It also gives you a benchmark to test against any operational change that you make to ensure that they are having the desired effect.
Research and development
One of the major barriers for SMEs utilising big data is that they would have to invest in new types of technology to use it effectively. For many companies, this is simply too much of a hassle. For others, however, it presents an important opportunity. If you are having to invest in new technology to utilise big data in your company, this work could qualify for research and development (R&D) tax credits. “Many businesses assume that only larger companies can make use of research and development tax credits, but this is far from the case,” explains Chris Plumridge, Director at Wellden Turnbull, a chartered accountant with expertise in R&D tax credits. “In fact, there is a government scheme specifically aimed at small and medium-sized businesses”. For work to qualify for R&D tax relief, it has to have looked for an advance in science or technology and faced an uncertainty that you tried to overcome. You would also need to be able to show that this research could not have easily been worked out by a professional in your field. As such, work on big data could easily help you qualify for valuable R&D tax relief.
Understand the competition
As we can see from many of the points above, analysing big data can be extremely valuable in assessing various aspects of your own business. However, it can also play a very important role in providing you with a better understanding of your competitors. While it is the nature of SMEs to focus on their own operations - being aware of what your competition is doing is a very important way to out manoeuvre them. Getting insight into your competition not only provides you with an understanding of their strategies, it also allows you to get your information about your audience. It is likely that your competitors are working within the same target market as you. And so, being able to understand what has worked for them and what hasn’t is essential.
Enhance your customer service
Another valuable aspect of big data is that it can help SMEs improve their customer service. Collecting feedback from customers is a vital way to understand what they like and what could be improved about the service you provide. This means that you will have a treasure-trove of valuable data and can be used to offer insights into ways to improve overall customer service. Perhaps one of the most important aspects of this is that it can reveal the potential obstacles to purchase. Understanding these gives you actionable steps to remove those obstacles.
Article by Chester Avey, Business and Finance Writer Enjoy this article? Share your thoughts with us.
High Wycombe, Buckinghamshire
Senior Data Scientist
Market Research Data Analyst
Primary Market Research Data Analyst