Small businesses often unwittingly possess a wealth of information at their fingertips that can improve their bottom line.
Customer insights that shed light on new business opportunities are on every small business’ wish list. Yet many SMEs aren’t aware those insights can simply be accessed by tapping into their own data.
Sharon Melamed knows the value of data. Her business, called Matchboard, matches businesses and suppliers, such as call centres and technology support teams. She uses data collected from clients to reveal new market trends. This includes purchasing trends by product or service, location, budget and industry.
Forming best practices to collect, dissect and action data can be a simple growth strategy for SMEs.
Analysing this data has exposed new segments in the market that aren’t being catered for, allowing Melamed’s company to reach new customers and introduce new products and services.
“We started to see more and more requests on Matchboard for after-hours help desk support,” Melamed explains.
“It became apparent that most of our call centre outsourcing suppliers weren’t interested in helping these software vendors after hours because the volume of calls in the night was so small for each company.
“So we approached the market and pointed out the gap and one of our suppliers was then able to develop a shared pool of technical support agents in response, as long as we could provide multiple leads to make it worth their while. Gap closed!”
Small business owners often don’t realise the potential to leverage their own stockpile of data. It can be used to create more targeted marketing to personalise offerings to drive customer acquisition and ultimately, boost growth.
Mining data presents a plethora of opportunities to upsell and cross-sell, personalise marketing, reward loyalty and even fine-tune product ordering, says Alex Galin, co-founder of strategic data firm DataMuse.
“This is what we’re trying to call from the rooftops,” she says.
“There isn’t any reason why anyone with a website shouldn’t be using data in a way that’s appropriate for their own business just as effectively as large companies.”
How to collect data
The use of data analytics as a tool is an emerging trend for SMEs, but many are still struggling to find the best methods to take advantage of it. A survey of 2000 managers found few have strategic analytic plans in place.
Forming best practices to collect, dissect and action data can be a simple growth strategy for SMEs. The typical way to do this is with cloud-based customer relationship management (CRM) software. CRM software automatically captures and organises information including customer contact details, previous sales and customer feedback.
Most CRM software systems offer free trials, giving SMEs the chance to see whether the software has suitable features and integrates with any existing software. Popular systems include Salesforce, Zoho and Insightly. Generally the more you pay, the more features and support you receive.
Integration with other systems key
When deciding which CRM to use, integration with existing software such as point of sale is essential, Galin says.
“Typically when making a decision about what system to use, SMEs don’t necessarily consider the challenge of integrating various systems. This causes a lot of problems reasonably soon because data collection has become a mainstream practice,” she says.
“There are a lot of platforms out there to choose from and there’s no clear winner in any particular field. But you’ve got to think about integration from the very moment that you’re setting things up or you could end up with a CRM system that doesn’t talk to your web analytics system that doesn’t talk to your POS system.”
Segmenting data for deeper insights
Once businesses have mastered the basics of data collection, they should aim to segment customer information as finely as possible to tailor their marketing and gain a competitive edge on other businesses leveraging data.
“It’s not enough to segment customers by age, gender, location anymore,” Galin says.
As useful as a company’s data can be to its growth, it’s also valuable to hackers looking to exploit personal and financial intelligence. The threat of cyber-attacks looms over every business, no matter how small.
In a joint study with Cambridge University, insurance giant Lloyd’s ranks 310 global cities by cyber attack exposure, with Sydney placing 12th.
Cyber insurance mitigates against the fallout of a cyber attack, which can be extremely costly for small businesses. Policies vary, but can cover financial losses for business interruption, cyber extortion and electronic data replacement. Cover may also comprise legal costs for defending potential defamation claims and costs arising fines by government regulators.
For advice on the cover you need to best protect your business, contact The Builders Insurance Broker, we can get to know your business inside and out to help recommend the best insurance policies for your business.