I read an interesting article the other day about how a novel targeted at young, single females and housewives wasn’t selling as well as expected. When the publisher looked deeper into its sales data, it found that this market segment made up only a small portion of readers – and that the majority of buyers were actually older women and men!
The publisher acted on this information, adjusted its marketing strategy and book sales increased substantially. It made me think about the value of data to small businesses and the transformative impact data-driven decisions can have on companies of any size – especially on the bottom line.
Yet small business owners are still wary of data, believing they don’t have access to the tools and skills needed to process huge volumes of information.
The truth is that your small business has been producing data for a long time and, by not acting on that information, you could be missing out on unexpected growth opportunities.
Why should small businesses care about data?
It’s easy for a small business owner to get overwhelmed when faced with mountains of data. Often, they don’t know where to start or what questions to ask of the data.
My advice is to start small. Identify a specific business problem and play around with your data until you have an answer.
Some questions you might want to ask include:
- Am I targeting the right audience?
- Why is product X selling so well in one area but not another?
- Why did my sales peak on this specific day and how do I repeat that?
Even if you don’t have a lot of data in your internal systems, you can still access free public data sources – like weather, mapping, market research and government data. The most powerful data – from your website traffic patterns and social media sentiment – can be easily accessed and analysed using tools like Google Analytics and social listening platforms (such as Buffer and HootSuite).
Data analytics tools are getting easier to use. Most good solutions today feature powerful visualisation tools that let you see a trend as a graph or a chart, making it easier to understand. Many others use familiar interfaces like Excel so that you don’t need lots of training to make sense of your data. The barriers to entry are becoming lower, thanks to these easy-to-use tools.
The other good news is that small businesses have less data to worry about but the insights they can get from that data could have a massive impact on their operations and profit.
The more you know, the better decisions you can make for your business. It starts with knowing the problem you’re trying to solve and being agile enough to act on the insights you find in your data.
Insights you could uncover using data that’s already freely accessible and readily available to you include:
- Analysing your sales data to get a better picture of your customer so you know who to target.
- Analysing customer feedback on social media and phone transcripts to improve your product or service, as well as your customers’ experience of your brand.
- Understanding what your competitors are doing and the public sentiment around their product.
- Understanding why a certain product sells in one area but not another. People who live in areas with cooler temperatures are more likely to buy bulky jackets, for example.
- Making use of the built-in data analysis and business insights tools in your cloud accounting and invoicing software to better understand your busy and quiet periods and how to prepare for them by adjusting your inventory levels.
- Identifying trends in customer spending habits, like which products sell more on Wednesdays, for example.
- Using free tools like Google Analytics to measure the traffic to your website and to see how people interact with the content. These tools also help to track Internet searches of your company or the products it supplies.
- Analysing search pattern trends – freely available from Google – to optimise your website and content for SEO.