How entrepreneurs can use big data to boost their business

Big data sounds daunting, especially when you’re a start-up or SME with limited resources. Do you have time to crunch data? Do you have the ability to learn languages like SQL and Python and work out how to manipulate, scrape, and use data? Do you even need to? Big data is there to be used, and now, thanks to cloud computing, SMEs don’t even need huge servers to access the reams and reams of information that was previously only accessible to large organisations. 

Data can be intimidating, but think of how useful raw information can be a business. Run an ice cream shop? Use weather data from the last 10 years to see when the temperature increases and you should install outside seating, Or, perhaps if you run a butcher’s shop, understanding trends relating to vegetarianism and veganism could help you prepare marketing materials. These are probably silly examples, but the point is this: even if you run a business that seems as far away from artificial intelligence  and machine learning as is possible to get, data can still be used to boost business.

The Office for National Statistics is a great source of open data, with stats on pretty much everything from crime stats to information on where people live. Similarly, TfL has free data sets showing who cycles, motorbikes, or tubes and where. Could be very useful indeed for budding entrepreneurs wanting to set up a bicycle repair shop, or a home delivery service.

Using tools like Google analytics can also be immensely useful for SMEs tentatively looking into how data can be helpful for the first time. It’s a free tool, and easy to use. Marc Swann, search director at Glass Digital says: “SMEs that use Google Analytics to monitor their website's performance can gain a huge competitive advantage. However, it's extremely important to know how to interpret and utilise the information effectively. Before acting on a poor metric, make sure to 'cleanse' the data. Simple things like filtering for your target region can go a long way to making KPIs look healthier.”

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He explains the benefits of this. “Let's say you've got a low overall conversion rate. Segmenting the data by page type might show that your product pages are doing well, but your help guides are dragging the average down, because users visiting these pages are less likely to have purchase intent. This context will direct your efforts into retargeting campaigns and better calls to action on blog posts, rather than funnelling unnecessary investment into product pages.

Dig deeper into data to see if you can get insight into exactly what's going on, and you're more likely to make the smartest decision.”

Read: How businesses can use technology to learn more about their customers

Robert Dagge, MD at Dynistics, a business intelligence and data dashboard company, says SMBs should employ data – using business intelligence (BI) tools – to boost their business. A BI refers to a variety of software applications used to analyze an organization's raw data.

For one it, enables SMEs to customise their projects. “Business intelligence provides a holistic view of current performance with the ability to drill down into any chosen area of the business and the flexibility to allow for customisation. This means the MD of a small company, or team leaders in a medium firm, can decide on the KPIs most relevant to their specific areas of work rather than being overloaded with irrelevant data.”

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In addition business intelligence can clearly show bottomline revenue for SMBs in a digestible format. This gives staff an objective method to improve their performance and work smarter as it provides the ability to drill down into specific stages in the job pipeline and prioritise workload based on how close activities are to completion, explains Dagge.

However, it is possible to get by without using big data, The co-founders of Loop54 and developers of the new algorithm, Mike Odin, Joel Kall and Robin Mellstrand, attempted to apply some of Netflix's award-winning recommendation algorithms to a similar Swedish video streaming service.

They realised that Netflix's Collaborative Filtering algorithm, which requires many users with a lot of interactions that intersect each other, would be out of reach for a Swedish business with much less traffic and a data sparsity problem. After encountering several problems with this model, the project ignited a new idea which would bring the concept of ‘content discovery’, to e-commerce and to do it without big data. This now means that small and mid-size retailers can finally offer customers the same high level of personalisation, relevance and engaging interactions to which they've grown accustomed to, thanks to sites like Amazon and Netflix, but with significantly less behavioural data.

However, for the most part, using data is easy and accessible. To learn how to make the most of Google Sheets or Excel, a quick online tutorial can help you understand how best to at least order data, and work out how to analyse and manipulate it for key trends. 

This is a guest blog and may not represent the views of Virgin.com. Please see virgin.com/terms for more details. Image from gettyimages.

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