Everywhere you turn, people are buzzing about big data. It’s trendy and progressive—but is it valuable (or even viable) for mid-market businesses?
Data is nothing new, of course. The difference today is that, while data was once squirrelled away in filing cabinets and storage rooms, businesses can now readily access any piece of information they need, at any time.
This reality has powerful potential, but it also raises questions for businesses with limited resources:
* What can big data really do for me?
* Will the cost of big data exceed its value?
* How do I get started?
There’s no doubt that big data initiatives can increase revenue and reduce costs by evaluating buyer behavior, identifying opportunities for improved efficiency, and correcting problems in your current process execution.
Still, leveraging data can seem to require a huge investment of time and money, especially when you are already bogged down with the day-to-day operation of your business. As a mid-market business executive, you already have a full plate of responsibilities, and big data may seem like a train you can’t catch.
But sometimes you need to step away and gain some perspective—because big data is a tool that can place the key to greater profits and more customers directly into your hands.
The real question is: How can you leverage the power of big data for your business?
How Can Big Data Increase Profits for a Mid-Market Business?
The sheer volume of data available can be overwhelming. But all that data gives you a behind-the-scenes look into your business and your customers.
And that can inform your strategy, which can transform your business operations from the inside out.
Let’s take a look at five ways big data can deliver quantifiable results for your bottom line:
Identify positive trends
Customer analytics help you determine what’s working in terms of pricing strategy, order fulfillment, and productivity. Many mid-market businesses start their business analytics with sales and marketing funnel data, but that’s only the beginning of what’s possible.
Troubleshoot negative trends
Discover leaks in your conversion process, pinpoint data security breaches, improve capacity usage, and ferret out inefficiencies that could be costing you money. This article from Inc. demonstrates how using data to optimize capacity and staffing led to ROI for businesses.
As you develop customer personas for your marketing strategy, data shows you what makes your customers tick. What motivates them? When are they more likely to buy? How many interactions will they need before you can close the sale? What prompts a decision—price, quality, service—and in what proportion? Where are they most likely to exit your conversion process? This information will help you target your sales strategy for greatest return.
Build customer value
Data can guide customer interactions, resulting in stronger loyalty and deeper engagement. As you move through the customer journey, the right data can show you when and how to upsell, cross-sell, solicit feedback, and communicate with your best customers.
Establish competitive advantage
If you invest in big data technology and strategy but your competitors don’t, how will that position you to outperform them in the marketplace? What changes can you make to your current marketing strategy to reach more of the right customers and convert them to loyal fans?
The actionable knowledge you glean from big data can position you to take the next leap forward in your business. But what will it cost to put this data to work for you?
Analyzing the Cost of Big Data
Successful big data initiatives require investment in infrastructure, management, and skills. But will those investments exceed potential profit?
Consider two major kinds of costs:
Up-front dollars and cents
Traditional data warehousing assets like Oracle require a larger initial investment and greater management cost than an open-source framework such as Hadoop. Open-source frameworks can make it possible for companies to delve into data without maxing out budget—even when building custom software. Worthwhile uses Python (an open-source programming language), Django (an open-source framework), and PostgreSQL (an open source database) to build custom data solutions for our clients.
Total cost of ownership
The flip side of that equation is that open-source frameworks may carry ongoing costs because you may have to invest in upgrades or in talent to keep them running smoothly. If you don’t have a tech savvy person on your team, what will it cost to hire and train someone? How will you need to upgrade your network and your data warehouse to handle an influx of more data and more kinds of data? At Worthwhile, we encourage clients to think through three-year cost of ownership, and to count everything—hosting, maintenance, feature enhancements and seat licenses in order to get a clear view that can help determine real ROI.
There’s one more cost you should consider: the cost of not taking action. Big data gives companies a better understanding of the market so they can construct superior marketing strategies.
If you’re not doing that, your competitors are.
By not taking action, you could be missing valuable opportunities to build your brand, differentiate yourself, and reach your best customers with your message. So move toward big data in an intelligent way.
6 Steps to Harnessing the Power of Big Data
The complex environment of big data may seem overwhelming, but mid-market businesses have plenty to gain from the increased knowledge and insight available to them. So it’s time to start moving down this road.
Here are 6 steps to developing your big data strategy:
Understand what data can—and can’t—do.
Don’t expect automatic positive results when you start parsing data. Data can’t interpret itself for you. You need the right people on your team to evaluate the numbers and identify action steps. That may mean hiring an additional team member or expanding your in-house expertise about data analysis.
Early adoption of big data analytics escalates your potential to benefit. If you make the jump before your competitors do, you have time to learn by trial and error and to differentiate yourself in the marketplace. As big data continues to evolve, you will also have the knowledge and experience to use it most effectively.
Know the problem you’re trying to solve.
Do you want to better use your resources from machines to people? Do you want to better serve customers to increase retention and satisfaction? Technology can help you solve almost any business problem if you can input the right data. When you narrow your focus to a specific problem, you can research the best way to analyze it so you can solve it.
Know what data to look for.
Valuable data must be timely, relevant, secure, and actionable. Key performance indicators (KPI) for your business should gauge both risk and opportunity to increase the value of data and deliver the greatest ROI.
Mid-market businesses have an advantage over large corporations, because they operate in a smaller universe of data. But you can distill things down even more. Think through your goals and desired outcomes before you start analyzing data so you’ll be less likely to misinterpret what you see. Start with a single hypothesis and test it to see if you achieve the desired results. If you don’t, you haven’t lost much. But if you do see positive results, you have a blueprint for more in-depth research and data analysis.
Take an agile approach.
Another advantage for mid-market businesses is that they have flexibility to act quickly on trends revealed by data analysis. When you aren’t bogged down by process or multiple levels of leadership approval, you can follow wherever the data takes you. Mid-market businesses can pivot quickly when data identifies an action point, incorporating insights efficiently without wading through red tape.
Today’s data management platforms put the power of big data at the disposal of any business. It doesn’t have to be difficult, expensive, or complicated.
Successful big data initiatives take a broad view of current trends so you can make better decisions for your company. The information is already there—you simply need to harness it to get inside your customers’ heads and optimize your business operations and strategy.
Once you have done that, you will be riding the front edge of the big data wave in your industry.
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