Big data is one of the big buzz phrases of the year, but what does it really mean and why should you, the small business owner, care? That’s what we’re going to tackle today—breaking down big data and looking at a few things you can take from the trend to grow your small business.
So, first off, what does big data mean? In simple terms it refers to the recent explosion of digital data—data that, in some cases, big companies are using to do things like predict market trends, create better products, and get closer to their customers.
A vast new layer of data
Traditionally companies have collected what is called ‘structured data,’ things like customer records, satisfaction data, sales transactions, and demographic info—your personal details collected in large databases. But the recent growth of computing power, mobile devices and social media has created a new and vast layer of something called ‘unstructured’ data. This unstructured data is typically based on your interactions and is generated when you Tweet, search online, blog, comment, watch videos—all the relatively recent ways we engage with each other online and through social media.
In the new best-selling book Loyalty 3.0: How to Revolutionize Customer and Employee Engagement with Big Data and Gamification, Rajat Paharia, Founder and Chief Product Officer of Bunchball, says, “With big data, a business can learn a lot about what you do, where you do it, when you do it, and what you like.”
Big businesses are trying to get small
Using big data to answer those who, what, where questions is important for big businesses because the data allows companies to build predictive models that help them do something small business owners and entrepreneurs have always excelled at—anticipate customer needs and then personalize the customer experience.
A muffin on your birthday
For example, it’s nothing new for the owner of a local café to chat with her regulars and get to know them so well that she can have that small espresso ready when Dave arrives, maybe with a complimentary muffin if it’s his birthday.
Now, big companies are using big data to offer similarly personalized service. For instance, companies like Netflix, Amazon and Goodreads use analysis of customer preferences to generate recommendations for books and movies you might enjoy. Airlines now equip cabin staff with iPads that contain data about your drink, meal and seating preferences so the staff can anticipate your needs. Retailers like Walmart and Sears use big data to personalize marketing campaigns and coupon offers.
Data can bring you even closer to your customers
The good news for small business owners is that the wealth of data available today isn’t just a boon for big business. Entrepreneurs may not have the same volume of data available to them as big businesses. And they certainly don’t have an army of analysts hammering away on algorithms. But you can collect data to help you do an even better job of personalizing your customers’ experiences—better than the big dogs ever could.
As Rajat told me, “Since I finished writing Loyalty 3.0, I’ve been thinking that the real key is not just the sheer volume of data you collect, but the volume of data per user. Which makes data important for companies of all sizes.” That means that you don’t need Terabytes of data about your customers to find ways to make their experience more personal and enjoyable.
Three steps to putting data to work for you
Step one—create content your customers want
A key step in making data work for you is to create content that will encourage your customers to, as Rajat says, ‘raise their hand and tell you things about themselves.’ Don’t make the mistake many business owners make, which is delivering content that is only about their company and products or services. The most effective way to get your customers to interact with you is to create content that is for them, rather than all about you.
Publish your content on as many places as you can—your website and any of the social media channels your customers engage with—your Facebook page, your YouTube channel, your Twitter stream, Google+ profiles, and so on. If you create content on these services that helps your customers solve problems or improve their lives—they will share and comment, revealing themselves to you.
Step two—collect data
Large companies use complex and sometimes expensive analysis programs like Hadoop and Cloudera to collect data. But for your small business, there are a variety of easy-to-use programs that will give you lots of useful data. Here are some powerful ones (and they’re all free.)
- Google Analytics—analyzes website traffic and social media data from Facebook, Twitter and Google+. Analytics tells you how people got to your website (from a Google search or a specific website) and how they spend time on your site.
- Facebook Insights—shows you what content is being viewed the most and also what content is the most viral—what is being shared.
- Tweriod and Followerwonk—provide you with gender, location and activity data on the people who follow you on Twitter.
- YouTube Analytics—provides demographic data about the people viewing your videos and will also break out those who “Liked” or “DisLiked” your content.
Step three—turn data into action
Once you’ve started collecting your data your next challenge is to use it to personalize your customers’ experiences. Below, I’ve put together some quick examples based on some success stories of how business owners have used the above data tools to grow their businesses.
My landscape designer found that a significant number of people who visited her website arrived via Facebook pages created by flower clubs. So she started featuring flowers more on her site and also spent more time contributing to those clubs’ Facebook pages. She ended up growing a solid client base through this and similarly targeted efforts.
A fellow business coach discovered that people who came to his page liked and shared his weekly sales advice posts the most. So he stopped publishing his low-performing content and started publishing daily sales coach tips. The number of comments for each of these posts grew steadily over the weeks, as did the number of people wanting his coaching help.
Tweriod and Followerwonk
A friend who runs a side-business used to do a lot of late-night Tweeting till she discovered through Tweriod that her typical clients paid most attention to Tweets that arrived first thing in the morning, probably before work demands took over. After switching to morning Tweeting, she saw a large uptick in responses.
By using Followerwonk the owner of a design agency was able to see that his key clients had networks interested in mobile app design. When he started Tweeting to key influencers in those networks, his clients started seeing Tweets and Retweets about him from the people they followed. He also started tailoring mobile app Tweets for the networks of two of his biggest clients. He soon became a regular in their network, someone they came to for advice, rather than just a business owner who bombarded them with marketing content.
Using YouTube Analytics, the owner of a dog-walking business found that the biggest response to his videos in his east-end neighborhood came from families who enjoy pieces about small-breed dogs. Using this knowledge he started to create a video series that focused on the challenges and rewards of small-dog ownership for families with young children. The positive reaction he got to this eventually led to opportunities to help clients with training as well as dog walking.
The last word
By paying attention to the data available through all your online services, you can tailor your content to the clients you wish to attract, building stronger and deeper relationships with your audience.
About the author: Andy Haynes is a writer for FreshBooks. He is the co-author of two best-selling business books, a successful entrepreneur and business consultant.
If you enjoyed this article, you might want to check out Andy’s advice on how to how to succeed in the sharing economy in which he talks about why the old way of networking no longer flies.