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Big Data: Friend or Foe of Small Business?

Compiled by Ken Custer

Not being an expert on data management, I set out to find what others are saying about using data for small and medium sized businesses. I started by Goggling “Small Business Data Tools.” There are a ton of article to peruse and many experts ready to talk about the subject. Adding a few of my own thoughts gleaned from hearing great speakers at organization meetings, I have tried to capture the main points in using big data. The one source I didn't go to is “Big Data for Dummies.” Maybe I should have.

According to Wikipedia:
Big data is the term for a collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools or traditional data processing applications. The challenges include capture, curation, storage, search, sharing, transfer, analysis, and visualization. The trend to larger data sets is due to the additional information derivable from analysis of a single large set of related data, as compared to separate smaller sets with the same total amount of data, allowing correlations to be found to "spot business trends, determine quality of research, prevent diseases, link legal citations, combat crime, and determine real-time roadway traffic conditions.

According to Webopedia:
Big data is a buzzword, or catch-phrase, used to describe a massive volume of both structured and unstructured data that is so large that it's difficult to process using traditional database and software techniques. In most enterprise scenarios the data is too big or it moves too fast or it exceeds current processing capacity.

While the term may seem to reference the volume of data, that isn't always the case. The term big data, especially when used by vendors, may refer to the technology (which includes tools and processes) that an organization requires to handle the large amounts of data and storage facilities.

The term big data is believed to have originated with Web search companies who had to query very large distributed aggregations of loosely structured data.

There are two primary ways for small businesses to collect data: One is collecting from an outside source such as marketing statistics, mail lists, government data, etc. Two is the data that you collect on your customers. This article will deal with the latter.
Whether you are a business to consumer or business-to-business company, your customer data is critical to your business.

The buzzword today is “Big Data”. The question is, “how to use this big data and how much is too much?” For a small business it can be overpowering. The real key is in the planning. What do you really need to know about your customers, knowing how to collect this pertinent information and how to sort it so that it is easily accessible is important. Then, determining the best way to use the data to contact your customers: Email, social media, direct mail or any of the myriads of opportunities available today. Knowing your customers, how and when they buy and how they like to be contacted is a critical part of this planning. Especially the basics such as name, address, contact information including phone and email, gender time/day spending preferences, trend buying (what are people buying most?) social media interaction (what is being talked about, what are people satisfied/dissatisfied with?) and geographic information.
  • Knowing this information will then let you plan how best to use it:
  • Determine what products you want tpush and twhich customers
  • Set a realistic schedule tpromote the products
  • Determine what is the best platform(s) treach these customers
  • What message must be created?
By completing some simple planning steps you can save time, effort and resources and get much better results. It is simple marketing 101. Be sure to set your goals so you can measure the results.

Collecting the data
Hopefully you are collecting your customers' buying history, how they contacted you and how they made their purchases? Was it in-store, online, through SEO or from a media ad? If online, was it from a desktop computer or a mobile devise? Knowing the device used to contact you will let you design your response to fit their screen size. Most of this information is available with Google analytics but don't be afraid to ask them for this information. Opt-in is very important in gathering information. When people visit your website have an Opt-in button so you can continue to send them information. A great source of information can be gathered if you have a customer loyalty program where they scan their loyalty card each time a purchase is made. Be sure to reward them for using the card.

The following is from: The impact of big data on small businesses by David Steinberg Posted on November 04, 2013 on imedia Connection

Big data is especially significant to smaller business because data and figures surrounding consumer interaction can tell very specific things.

Smaller businesses can use big data in very specific, niche ways to reach a more targeted audience and buyer group. Understanding buying patterns for its customers, for example, can be crucial for small businesses. It takes the guessing game out of the equation when it comes to stocking shelves and buying supplies. Small businesses with information surrounding buying trends better understand what their buyers want and what they don't, thus alleviating extra costs spent on stocking shelves with products that won't sell.

And with technology that tracks and manages local information, small business can effectively create and deliver comprehensive marketing and advertising strategies. Big data is living and breathing and, as a result, is constantly changing to meld with societal patterns and goings-on. When delivered this information -- be it social media activity to competitor openings and closings to buyer patterns -- businesses can represent the current standing of its community by developing effective plans.

Managing the data
The following is from: The Business Journals, 12/10/13 by Jesse Harriott, Chief Analytics Officer, Constant Contact

As a small business, is it really possible to get true Big Data insights? The answer is yes - by seeking out the big companies that are committed to small business success.

For example, let's say one of your goals is to know the best time to send out your email marketing campaign to make sure you receive the most opens. At Constant Contact, we send more than 45 billion emails every year on behalf of our customers. That's the kind of volume that can produce real, tangible insights into what works, whether that's the best time to send an email, or what call to action will get the best click-through rates.

Of course, Constant Contact is just one example, the one I happen to know best as its chief analytics officer. There are plenty of other big companies delivering real insights to small businesses. Take Google, for instance. With BigQuery, Google provides businesses with massive amounts of data to help them make informed business decisions in real-time.

If you seek out the businesses focused on small businesses, they can often provide you with insights you need to drive even more business success. All you have to do is put those insights to work for you.

Businesses of all sizes are starting to think about Big Data, but 2014 is the year when small businesses can expect to benefit from the Big Data craze. We'll see more and more organizations of all sizes gain a new understanding on how Big Data can help their business, much like they did with mobile two years ago and social media five years ago. Whether you want to start a data project in-house, or you're looking for a little help from your Big Data friends, you have access to information that will help grow your business.

The following is from: Wall Street Journal 9/30/13 Ms. Louise Lee is a writer in Palo Alto, Calif. She can be reached at

Customer feedback can be valuable. You can't afford to spend hours perusing all of them. Some social-media sites let you sort out comments written by those who have large followings or whose comments are frequently posted elsewhere. "Those are the ones that can have an impact," so you read those first, says Steve King, partner at Emergent Research in Lafayette, Calif. If your business attracts emailed comments, set up your inbox so that incoming messages from, say, existing customers flow into a high-priority folder. Whether you're reading online comments or emailed ones, search for hot-button words such as "quality" or "complaint."

More by Jesse Harriott
When looking at how to best use the data you already have in-house, start by asking yourself a few questions. The most critical step is unfortunately the one most often overlooked. Many businesses jump right into analyzing data. I caution you, take a step back! You have to kick off your project by coming up with a specific question that you want to answer.

The next question you should ask is what data you need to answer your question. No matter the size of your business, it's likely that you have tons of data you could analyze. So once you have figured out your question, think about what types of data will help answer that question.

Keep Privacy in Mind
By Karen E. Klein April 03, 2013 BloombergBusinessweek

“You want to build customer relationships, but not have customers feel like you're looking over their shoulder. [Small and midsize businesses] don't want to appear icky, but the line is gray, so we're working with our partners on best practices,” he says. “Sort of like Miss Manners for big data.”

Other companies, like Chicago-based review site G2Crowd, avoid the privacy issue by getting users to opt in: People who post business software reviews must validate their identities by signing in with their LinkedIn (LNKD) accounts, in effect giving permission to have their profile data mined.

In the January 2014 issue of The Review, Greg Olson, The Growl Agency, and Mark Mitten. Carbon8, discussed mobile marketing and the need to follow privacy rules.

Olson said “Opt-in is for email, you don't want to push something to them they don't want because that's not how they want to be communicated to. Opt-in is important for privacy issues. Where I see opt-in is for apps. Now you can have United Airlines notify you for a flight change.”

Mitten said, “All the opt-in rules that apply in the consumer world do not in the B2B world - there is a misconception. When it comes to B2B email, users don't actually have to be opted-in for you to send them emails. You do need to have all the proper opt-out capabilities to unsubscribe.”

It is important to keep the privacy issue in mind while collecting your data. Perhaps one way to think about it is, if you wouldn't want a particular piece of your information known, probably your customer wouldn't either.

Now that you have collected your data and determined how best to use it, it is time to put that data to use and build your business.

According to David Steinberg:
The local business economy accounts for 70 percent of the United States' GDP. As entrepreneurship continues to thrive in this country, big data can add a layer of personalization for smaller businesses. Owners and managers of small to mid-size businesses are now able to answer questions that previously went unanswered. These include questions of how much of a product to stock, how many workers are needed for this shift, or even how to compete with other local businesses. Lacking the answers causes profitable growth opportunities to slip away. Big data analytics and tools are more affordable and available to businesses with smaller budgets and, with that, a competitive landscape is forming based on information from consumers provided to all business establishments.

Ultimately, as big data becomes more prevalent and analytic tools more affordable, it should be a priority for small business to embrace the big data movement. It's time to break the notion that big data can only benefit large businesses. Small businesses that utilize big data will have a stronger understanding of their target markets and will be able to better cater to customers and demand. Big data is not just for the big players anymore, but is a valuable asset for businesses of any size.

Big data is not something to fear, it is just another tool in the marketing toolbox. When used wisely and with planning it is a great asset to the business. Whether the business is small, medium or large, determining what your needs are and how you will use the information collected is the key to success.

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