Big Data is the cry echoing from big business these days, and it promises the change the face of business as we know it. While I am not sure that it is going to have that kind of impact, big data is going to be an essential part of any business strategy going forward.
But I am here to tell you that it’s not just for the big guys. Small business data is just as relevant to the smaller business. Let’s take a look at why this is the case.
It’s all about the Small Business Data
Your Customers Are Your Most Important Data
Any small business is going to live and die by its customer base. Once the cost of customer acquisition is spent, and the customer captured, the most critical aspect of small business should be to keep that customer.
This is important because the cost of customer acquisition can often dwarf the profits made from the initial sale. Repeat business is the tool with which small businesses thrive. So you want to keep your customers happy.
But the only real information you have about your customers is in your customer data.
Analyze Your Data
Your small business data should contain the specifics of each customer, such as the name and contact information. It will probably also include purchase history for the customer.
If you have this information, you have a good start on the data you need to be successful. But if this is all you have, then you are missing some of the most critical data points you should have at your disposal.
To be exact, you should have some form of metrics that define how satisfied that customer is with your service. These metrics make up the data that you need to analyze and use to determine where corrective action is necessary.
What can you do if you don’t have this information? Don’t feel like you are alone since many small businesses overlook this vitally important metric.
You can start now by asking one simple question.
Ask the Right Question
How do you collect the information y0u need to have actionable data to analyze? Simple – at some point during the business transaction, ask the customer how likely they are to recommend your services to friends and coworkers on a scale from 0 to 10.
This single question will give you everything you need to have the data metrics to keep your customers. The data you collect from this question will be calculated as the Net Promoter Score (NPS). Naturally, you will want more tens than zeros.
But how do you use this collected data?
Keeping Your Customers Through Data Analysis
A small business does not always need a complicated analysis process to start putting its data to work. In the case of the NPS, the process is simple. You will want to move any detractors (those with a score from 0 to 6) to the neutral category (7 or 8).
And those that are neutral need to be nudged to the promoter group (9 and 10). And as for the promoters, well, they can do amazing things for your business. One of the most effective ways to advertise your business is by word of mouth and those promoters will more than likely do precisely that. This reason is why they are so valuable.
The Power of the Data
Each customer that you can move from detractor to neutral is another customer that you will not need to replace through an expensive customer acquisition process. Those customers move directly into profit, which is good for business.
What made this simple but effective process possible? The small business data that you had collected and analyzed made everything work for you. You are saving the money of customer acquisition while helping to get the word out about your business through one of the most effective means known.
While this was a simple example of how small business data is useful for growing your livelihood, there are many different types of master data management tools that can have a significant impact on your bottom line. The thing to remember is that your small business data is the essential tool for keeping your business thriving.