Author: Lindsey Patterson, Freelance Writer and Entrepreneur
For the past few years, people have been speaking incessantly about how great big data is and what it can offer. Is this just a fad, or does data really have something to offer small and large businesses alike? The truth is that while data won’t necessarily work miracles for large underlying problems in a business or organization, it can make better use of a business’s capital, human resources, and time in order to achieve more favorable outcomes.
However, just the notion of data can be a little bit disconcerting to some business owners and business people. And while there is absolutely some truth to the idea that understanding and making use of data is a complex effort, it doesn’t mean that the basics shouldn’t and can’t be understood. Data isn’t just a fad, and it isn’t going away. As the number of smart devices entering into our lives increases, and as the Internet of Things becomes a reality, data will increasingly play a role in the ways organizations and businesses make real-world decisions. For this reason, learning a bit about the implications and uses of big data now can be a boon for business owners and business people in the future.
Utilizing Data is the Pathway to Better Business, For All Businesses
As explained previously, data isn’t just a fad. In fact, it’s the way of the future in creating greater efficiencies and achieving more with less. If the idea of growth is enticing to you in any way, then understanding the basics of data and how it’s used is a necessity. With some form of data analysis being performed, companies will be positioned to benefit from greater knowledge of their customers, their products, and their sales.
However, big data isn’t just for big companies. Every company should consider utilizing data in one form or another. Even genetic testing and medical laboratories are transitioning into using big data analysis for their treatments in personalized medicine. Simple tools and metrics like marketing on social media can be accomplished by a small business owner who isn’t a data scientist and who does all her own marketing. Even some slightly more advanced tools like Tableau on Hadoop can be useful for novices too. While Hadoop is a complex data processing program, Tableau can greatly simplify the visual imagery of data and offers an easy graphical data manipulation tool for those with little experience in data.
Otherwise, many other simple dashboards are available for entrepreneurs who don’t have time to focus on seriously understanding big data but who want the benefits of a high level analysis. However, if a lot of money is at stake, if there’s too complex a data set on hand, or both, it might be wise to bring in a consultant or even a full time data analyst or scientist depending on the business context and the need.
Data Can Show You Where to Focus Your Efforts
Instead of shooting in the dark, data gives a much more accurate picture of the business environment and the consumer landscape. With a proper analysis of data, business people can better understand where to focus their efforts, including specifics like the value of a marketing campaign on Twitter, the click through rate for returning customers with different email templates, or the reactions of customers to product sales and loss-leaders.
You don’t necessarily have to incorporate big data in order to take away some of its most important business lessons though. It’s widely known that existing customers are much more likely to purchase from your business again compared to a completely new customer. Acquiring new customers is difficult and time consuming, and while it can lead to greater growth, marketing efforts to achieve growth this way should match the return on investment. What this means is that a good amount of your marketing efforts should go into existing customers, and in particular existing customers who have more profitable than others based on past purchases. What this marketing mix should look like in exact numbers or methods is more to be determined by big data and trial and error, but these basic concepts are important to understand as guidelines for working with big data in most business settings.
Data Must Be Used in Actionable Ways
So what do you do with data that has been crunched and analyzed? One of the most useful ways to incorporate data is to create a set of threshold parameters paired with actions to take if the threshold is crossed. These triggers will allow business owners to constantly tweak their sales and marketing efforts in the face of a constant stream of incoming data. For example, as we described above, a certain level of resources should be dedicated to acquiring new customers and a certain level should be dedicated to existing customers. Pre-set triggers can tell you when to invest more heavily in one area as opposed to another and can prevent the need for additional analysis.
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