Most entrepreneurs are familiar with the term 'big data.' After all, data is the lifeblood of any effective business strategy. While this might sound straightforward, there are plenty of big data challenges that many business owners are not aware of.
To start at the beginning of every data strategy, how is big data collected? And once you have it, what can you use it for and how can you manage it?
Let's take a look at everything you need to know to leverage big data for your business, from collection to management.
What is big data?
As the name suggests, the term big data refers to a large volume of information that can be collected, analyzed, shared, created, and much more. It can include any kind of information we create digitally, such as emails, texts, documents, videos, photos...
This term also has a layered definition that is known as the '3 V's':
The term velocity refers to the speed at which data is acquired. For example, real-time, automated data reports may be able to provide a company with customer information as soon as a specific goal is reached.
Volume is the overall amount of information and also includes the sources from which you obtain it. This typically includes things like social media, email, transactions, etc.
Lastly, variety is a term that refers to the different types of data that you collect. Big data could include all types of data, such as audio, video footage, digital images, and financial records.
Big data benefits to businesses
Big data might sound daunting, but the difficulties associated with it are well worth the trouble. Big data can offer a large number of benefits to businesses of all sizes.
As such, entrepreneurs need to make sure they prioritize collecting and managing it properly so they can make the most of what big data has to offer. Here are a few key areas where big data can make a difference.
1. Optimizing sales performance
One of the most useful benefits of big data is the possibility to optimize sales performance. By collecting and analyzing sales data, you'll be able to determine the weakest areas of your business and then make the appropriate changes.
Additionally, you can take a look at your customers' past browsing or purchasing behavior and use this data to make offers that they are likely to be interested in. Information from consumer feedback surveys can also be used to determine what areas of the customer experience need improvement.
While the type of information that you collect will depend on the size of your business and your industry, you can always use this information to increase your overall number of sales.
2. Mitigating risk
Proper risk management is essential to the long-term health and success of the business. This is particularly true for smaller companies that can't afford to make a misstep without incurring financial difficulty.
When reviewing your company's financial data, you'll gain direct insight into areas of your business practices that are particularly volatile. For instance, a particular marketing strategy may provide a significant return on investment during a single month while providing nearly nothing the next month.
You can use this data to fine-tune your strategy until it performs consistently. You'll also learn from past mistakes to avoid repeating them in the future – otherwise, you run the risk of dealing with consequences on a much larger scale as your business grows.
3. Streamlining your budget
You can also identify areas where your business is spending more than it should to optimize your spending.
It's not uncommon for businesses to unnecessarily spend thousands of dollars that they could reallocate toward other areas of the business. This is commonly seen with expenses involving subscription-based services, as recurring monthly payments often get buried underneath all the invoices and costs of running a business.
Big data can also help you identify expensive processes and workflows and give you valuable insights into how to optimize them.
How to collect big data
Many entrepreneurs might get lost when developing a data strategy due to the sheer amount of decisions they need to make. It's important to do this carefully and thoughtfully to create a practical, safe and scalable strategy to manage big data, from collection to usage.
Once you have a solid data strategy, you can think about how to start collecting data. There's a good chance that you're already doing it: if your business is run entirely or partially online, you likely already have some tools that collect and analyze data.
Think of your email marketing tool that stores customers' and leads' email addresses and other personal information, as well as other information like open rates, click-through rates, and more. Or your CRM, which contains a wealth of information about your customers in every stage of their journey.
Here are some more examples of how you can collect big data.
1. Social media
How your audience interacts with you on social media can give you a significant amount of crucial data. You'll be able to determine what type of content they are most interested in, how they interact with various aspects of your page, and more.
Over time, you'll develop a stronger understanding of the type of content that your followers want to see and then leverage this opportunity to direct them to your company's website. In addition, by analyzing trends, audience behavior and customer interactions on social media, you will have plenty of quality data to inform your overall sales and marketing strategies.
2. Website analytics
You will gain insights into the demographic profile of visitors, website traffic, keywords, landing page performance, conversions, and any other online data that is relevant for your business.
For example, you can find out how many people navigate away from your store's online cart, how long they stay on each page of your website, and how they get there in the first place.
You'll even be able to gain insight into what search terms they were looking for when they found you on search engines, allowing you to target them more effectively in the future and orienting SEO and PPC campaigns, for instance.
3. Purchase behavior
Although this metric is often explored while reviewing your website's analytics, it's worth giving your customers' purchase behavior extra attention. After all, understanding why someone decided to spend money on you is key to facilitating a higher number of future sales.
For example, you could analyze the purchase behavior of specific segments of customers. After determining what type of products they're interested in, you can then provide them with personalized offers related to their past purchases. This could also help you predict the interests of future customers who belong to the same segments and show similar behavior.
Additionally, users who tend to abandon their carts during their online purchase process often do so in order to deliberate on the price they're paying for the goods. From here, you can provide a discount on these items in order to encourage the completion of the purchase, or send them an email to remind them to purchase the products on their cart.
4. Customer satisfaction
If you want to offer stellar customer service and keep an eye on how happy your customers are with your company, it's crucial to measure customer satisfaction. You can do this with customer surveys that measure NPS (Net Promoter Score) and CSAT (Customer Satisfaction Score), for example.
This is useful to predict and prevent customer churn, as well as optimizing your products, sales strategies and customer service team. It also gives your customers an easy opportunity to let you know how they feel about your products or services, which helps them feel heard and cared for.
Data management best practices
It's essential to understand that every company has a responsibility in how they collect and manage data. It's highly unethical – and, in some cases, illegal – to collect customer data without your audience's explicit consent.
Be aware of all data protection regulations that may apply to your business, such as GDPR or CCPA, and ensure that you are complying with the law every step of the way.
Ensuring data security is also key: that means making sure that all the data you collect and store is safe and secure from unauthorized access and bad actors.
But it's not enough to convey that their data is in good hands – you need to make sure that it stays that way.
This means constantly updating your data security methods, auditing your data management tools and processes, providing adequate training to your staff that manages data, and taking any applicable measures to ensure that your data is continuously up-to-date and secure.
Collecting, managing and utilizing big data is a constant and important job. But when you have accurate, integrated and up-to-date customer data, you make everything else easier and more impactful for your organization. The better you understand big data and its uses, the more effectively you'll be able to steer your business in the right direction.
To have the highest quality data in every app and enable your departments to collaborate, use PieSync for a two-way contact data sync between your apps. From your CRM to your email marketing software and support platform, bring your apps together to enable a data-driven and nimble organization.