There’s a common misconception that Big Data is only for big companies. However, Big Data’s greatest potential may well lie in how it can take small and medium-size enterprises (SMEs) to the next level. These smaller businesses may be able to gather even more valuable insights from the correct interpretation of the massive stores of data that are now available.
Before Big Data became a relevant concept for businesses, companies primarily relied on their own (and much more limited) data. In large enterprises, there was a lot of data stored in spreadsheets and databases that could be analysed within the company to provide actionable information. Small companies had smaller customer bases, so they could only collect and analyse smaller amounts of data, which they stored in spaces such as file cabinets and desk drawers.
Today, SMEs can take their business data and combine it with publicly available information gleaned from social media, government databases, and other open data sources to reap the same benefits bigger companies do. And it’s financially doable nowadays, even for small companies.
What Big Data can Provide SMEs
SMEs that assume that they are too small to take advantage of what Big Data can bring will soon find themselves at a distinct disadvantage. Companies that ignore the potential of Big Data run the risk of being overtaken by similar-sized or smaller companies that are now beginning to ride the data-driven trend.
Big Data interpretation helps companies understand not only the information current customers provide such as browsing and buying habits but the likes, purchase patterns, and other relevant data from prospective customers as well. Understanding the way people search, research, and decide when it comes to purchase decisions can pave the way for customer targeting and segmentation to a level of precision never before seen for SMEs.
Consider the experience of Twiddy & Company, a real estate firm in North Carolina in the US which acted as an agent for about 1,000 homes that were rented to holiday makers. When they started out, they were able to track the dates a given home was available for rent. Now, by interpreting historical rental data, they can track the demand for each week of the rental season, and offer homeowners recommendations on pricing on a week-by-week basis. This maximises the revenue each homeowner can get from their property and the real estate company’s commissions as well.
Helping Businesses Improve Internally
In addition to improving the customer journey, SMEs can improve and expand internal company processes through Big Data. They can use the information gathered to increase profitability and also to improve processes and operations, customer service, and even fraud detection. This helps in making smaller businesses have a better potential at expanding their business with less issues. The old saying “I know 50% of my marketing works but I don’t know which 50%” is now becoming much clearer. The correct targeting of the correct messages via the correct media can be an outcome of insights from Big Data thereby making marketing overall more efficient and effective.
Take the case of Point Defiance Zoo and Aquarium in Tacoma, Washington, for example. The unpredictable weather in the Pacific Northwest made it nearly impossible to staff appropriately, as attendance was strictly weather-dependent. Relying on standard weather reports just wasn’t cutting it.
The zoo decided to compare detailed local weather information from the National Weather Services with its historical attendance figures. The hope was that this would allow them to better predict attendance on any given weekend. When the estimates came in within 10% of the actual figures on the first holiday weekend, some said it was a fluke. But the predictions have continued to become more and more accurate, keeping staffing costs under control. The zoo has also used the data it has collected to dramatically increase membership and online ticket sales.
Big Data may be even more impactful for SMEs than it is for large corporations for two reasons. First, the large companies have had a lot of this data for a while. They have a large enough sample size that they believed, possibly mistakenly, that the incremental intelligence provided by Big Data may not make a significant difference. Second, smaller companies are likely to be more agile, accepting, and more able to make use of the insights Big Data provides than bigger businesses when it comes to making changes in business processes and direction.
In order to take advantage of the competitive edge Big Data can provide SMEs, they need to be able to not only collect data but also be adept at properly interpreting it to release insight. Latize’s Ulysses linked data management solution can do this effectively for businesses both big and small, harmonising internal and external data sets into an intelligent web of data from which key insights can be derived. Through this, business owners and managers will be able to have the necessary understanding to improve their business from within and grow it for the future.